by Stephen Dreyfus

Created on: December 13, 2008   Last Updated: February 24, 2009

A Right Way and a Wrong Way to Ride Out a Recession:
A Recipe for Recover

What's the difference between a recession and a depression? In a recession, other people lose their jobs; when you lose yours the result is depression.

By the time the government officially declares we are in a recession, everyone already knows it. I have come to accept what most economic experts have been saying for years; that our economy goes through cycles; sometimes the economic climate is good, and sometimes the economic climate is bad. Right now, the economic climate is dismal. Stocks are down; unemployment is rising; production is lower than it has been for decades, consumers aren't buying, credit has stagnated, and pessimism reigns supreme. The country elected Obama, who ran on a message of change and hope. But for now, we are face to face with fear, itself.

In ancient China, when famine ravaged the country, the Emperor, a.k.a. the Son of Heaven, was executed. Ostensibly this was done because it was assumed the divine Emperor could control the climate, and thus, if there was a drought, it was his fault. In modern America, when the economic climate is bad, the President is given the axe because we assume the President can control the economy. Admittedly, there are things the President can do to make an economy worse, and Bush did several, including starting a war and giving Wall Street a free ride. Likewise, there are things a President can do to make things better, but we must not be nave; no one, not Obama, not a Clinton, nor a Reagan, nor even a Roosevelt, can "fix" a faltering economy.

I am not an economist. I am a Psychologist who has spent many decades studying and treating addiction. Economic recessions are in some ways quite similar to the downward spiral of alcohol addiction. Both involve repetitive cycles of behavior, which seem imperative at the time, but eventually only makes things worse and worse. The alcoholic drinks to relieve unbearable stress; the drinking leads to serious problems; the problems lead to even more stress; the stress leads to even more drinking.

When a recession begins, lack of sales leads to loss of revenue for wages; loss of money for wages leads to layoffs and unemployment; fear of unemployment leads to lack of consumer confidence; lack of confidence leads to less buying; less buying leads to even less sales; even less sales leads to even more layoffs and unemployment.

It doesn't have to be that way. Unfortunately, once a recession becomes obvious,

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