Dear patient readers, apologies for this newest missive in the expanding "pet peeve" department.
I'm calling for an international cease-fire in the usage of the term "bubble".
Suddenly there are bubbles everywhere: an internet stock bubble, sovereign debt bubbles, an education sector bubble, commodities bubbles, and consumer consumption bubbles.
We've had a few legitimate bubbles in the last 80 years. One instance in 1929. Another in 2000. And again recently with real estate/credit. Who knows, maybe there is another in the wings. But not around every corner.
Economists reserve the term bubble for the real thing-- a massive collapse of value that takes something like decades to recover. The term is not used as a synonym for corrections or potential crises, or for trends, drops, dips, or blips.
Nosebleed valuations on a few internet IPOs should not qualify as a bubble. Rapidly rising costs of education should not constitute a bubble. They are serious issues and troublesome trends.
Below I offer an example of the rise of bubble speak using Google Ngram. For 50 years people referred to "home prices declines", but now they deploy the b-word. (Perhaps bubble is appropriate for condos in Las Vegas or Florida, but in many parts the phrase "painful correction" would fit better.) You find this escalation in vocabulary in many other markets as well-- and the trend appears to be accelerating.
Obviously sensationalism sells, so people reach for a bazooka, rather than precision ordinance that might be more helpful to understanding.
Ka-boom. Make big claims or go home.