It dare not utter its name

In recent weeks, abundant evidence has pointed to a recession-a broad-based contraction of economic activity...

In recent weeks, abundant evidence has pointed to a recession 8212; a broad-based contraction of economic activity 8212; from rising unemployment claims to the continued pain in housing. Wall Street economists, whose employers have been experiencing their own private recession since last summer, haven8217;t shrunk from using the R word. But in certain quarters of Washington, euphemism and understatement, verging on outright denial, are par for the course8230; In last year8217;s hit comedy Knocked Up, a character, queasy about using the technical term for terminating a pregnancy, refers to a procedure that 8220;rhymes with shmashmortion.8221; Bernanke and the man who appointed him, President Bush, are clearly coping with similar verbal tics. Call it a slowdown, cite challenges, or insist the fundamentals are sound.

But please don8217;t call it a recession. Speaking at a press conference on Thursday, Bush said, 8220;I don8217;t think we8217;re headed to recession, but no question we8217;re in a slowdown.8221;

Recessions are unspeakable for several reasons. Many have come to believe erroneously that central bankers and executives, by deploying information technology and superior management, have engineered the business cycle out of existence. In addition, the impact of a contraction is so ghastly as to spur denial. For any debt-laden entity 8212; a consumer, a company, a government 8212; a decline in revenues can have a very swift and painful impact8230; But as a troubling bit of data from one of the last remaining hot sectors released last week shows, the gravitational pull of a falling economy can bring even the most powerful commercial force known to man crashing to earth.

Since its birth, Google has been in a perpetual growth spurt, posting insanely impressive metrics of all sorts 8212; from its share of Internet searches to profits8230; Google8217;s paid clicks 8212; the number of times Web surfers clicked on ads served up with a search 8212; fell 0.3 per cent between January 2007 and January 2008, even as the number of searches rose 40 per cent in the same period. As recently as August, Google8217;s ad clicks were rising at a 60 per cent clip. Google8217;s click-through rate 8212; the percentage of ads that get clicked on, and hence a measure of consumer follow-through on searches 8212; was also down sharply in January.

These numbers tell us something troubling about Google, and about the economy at large. Google became the Net8217;s 800-pound gorilla by defying underlying growth trends of the larger commercial universe. But now, says Andy Kessler, a Silicon Valley hedge-fund manager turned author, 8220;Google is big enough to be affected by cyclical economic forces.8221; Since it peaked at 747 last November, Google8217;s do-no-evil stock has plummeted 37 per cent, erasing 86 billion in value8230; If the economy is grinding to a halt, one would expect clicks of all categories to decline8230; If even Google is showing a decline of economic activity in a big chunk of its domain, it can mean only one thing: We8217;re in the portion of the economic cycle that rhymes with shmashmession.

Excerpted from Daniel Gross8217; 8216;The Unspeakable R Word8217; in Slate, March 1