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Thursday: August 26, 2010

False Dichotomy?

Filed under: — site admin @ 10:29 PM GMT-0500

Megan McArdle writes:

The economy is at best heading into a soft patch; at worst it is going into the second dip of a double-dip recession.

This is not the worst possibility, rather the middle one of three. McArdle’s dichotomy should be a trichthotomy, split three ways (not a ‘trichotomy’: that would be the act of splitting hairs). As some of her commenters point out, we may be well on our way into a full-scale depression. I have seen no sign of bottoming out, much less recovery, either temporary (in a double dip) or permanent. To put it another way, she and others have wondered whether this recession will be V-shaped (short and sharp, which is good), U-shaped (protracted, and not-so-good), or W-shaped (double-dip, even worse). There are other letters in the alphabet, and other characters in the HTML character set. Rather than one of these:

V – U – W

I wonder whether we might be looking at a drop to a permanently lower level, with no recovery:


or perhaps a continuous downhill slide:


or perhaps a steep drop with no visible bottom:

As with ice cream, a double dip is a pleasant prospect, compared to many of the alternatives.

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