Robert Rasche, research director at the Federal Reserve Bank of St. Louis, says an Arkansas reporter misquoted him as saying “depression” when he talked about the current recession. Just to make sure a St. Louis University audience understood the distinction, he emphasized the point this morning:

It isn’t your grandparents’ Great Depression. No matter what you read, we aren’t there. It’s the R-word, not the D-word. …

We are now comparable to the worst postwar recession, which was 1981-82, and there are some parts of the economy that are in really bad shape. … But the 1930s were on a different scale.

Rasche also said he wishes the National Bureau of Economic Research would have dated the recession as starting last summer instead of in December 2007. He showed graphs of several indicators, including employment and industrial production, that were flat or pointing only slightly downward in the first half of last year, but didn’t start falling dramatically until July. The NBER isn’t going to change its mind about the start date, but Rasche says we should keep the flat portion of those graphs in mind when we compare this recession to earlier ones. The recession is just completing its 16th month, which ties it for the longest such episode since 1933.

In answer to a question about bank solvency, Rasche said the problems are solvable:

We have the resources and the imagination to keep the financial system functioning. It may be costly to do that, but it may be cheaper than the alternatives.