Excerpts: John Tamny, Searching for a better understanding of depressions
What economists, commentators and politicians refer to as economic "depression" is not really economic at all. Instead, it should be said that when economies incur prolonged downturns, they do so as a result of governments putting a wedge between the natural instinct to work, and reward for that same work.
In short, business failure of any kind logically could not lead to a lengthy recession thanks to the existence of entrepreneurs eager to fix that which hasn't worked in the past. Instead, the word "depression" can only be a governmental phenomenon whereby governments tax, regulate, inflate and generally reduce our ability to trade freely such that our economic freedoms are compromised, and entrepreneurial incentives are taken away.