In the latest session of Clarkonomics, Clark delivered a "Recession 101" lecture. Read on for an easy-to-understand primer about this much-used term. Clark recently got a chuckle out of a Barron's story that featured economists stating the odds that we'd go into a recession, just like they were betting on a game! To be in a classic "recession," the gross domestic product has to have declined for 2 or more successive quarters. In layman's terms, that means that the sum total of economic activity in the United States has to have gone down for six straight months. Our nation has been fortunate enough to have steady economic growth. Our last real bump in the road was in early 2001. To complicate people's understanding of a recession, you can also have what's called a "growth recession." That's when unemployment rises but the overall economy continues to limp along OK. At best, we are in a growth recession right now. Another term you may hear is "misery index," which is equal to the rate of inflation plus the rate of unemployment.

It's very difficult to deal with both high inflation and high unemployment at the same time. Typically, you have to create stimulus to get the economy flowing again. To do so, the Federal Reserve may flood the market with money or the federal government may create job programs. We've had great run economically in this country. There are a lot of factors that suggest we won't have a great run in the immediate future. So here's Clark advice: If it looks like the storm clouds are gathering, it's your job to get your umbrella and clean up your financial house to deal with the rainy days that may come. Meanwhile, Jim Cramer has been saying that people are talking us into a recession, that it's a self-fulfilling prophecy of some kind. Clark disagrees. What matters are the fundamentals. Clean up your house and you'll survive.