What’s the difference between a recession, a depression and a panic? This was explained in 1934 and in several newspapers in 1939:
 
“When you tighten you belt, its a recession.
When you have no belt to tighten, its a depression.
When you have no pants to hold, its a panic.”
 
Adam Thomson (1926–2000), chairman of Caledonian Airways (1961–1970) and managing director and chairman of British Caledonian Airways (1970–1987), said in 1984, “A recession is when you have to tighten your belt; depression is when you have no belt to tighten. When you’ve lost your trousers — you’re in the airline business.”
 
A similar recession/depression saying is “A recession is when your neighbor loses his job; a depression is when you lose your job.”
     
 
Google Books
The Cokesbury Stunt Book:
More than 600 stunts for the stage, banquet, luncheon, party, boys’ camps, and other occasions
By Arthur M. Depew
Nashville, TN: Cokesbury Press
1934
Pg. 74:
Second. Say, do you know what a recession is?
First. No, what is a recession?
Second. That’s when you have to tighten your belt.
First. Well, do you know what a depression is?
Second. No, what is a depression?
First. That’s when you don’t have any belt to tighten.
Second. Well, do you know what a panic is?
First. Well, go ahead and tell me what a panic is.
Second. That’s when you don’t have any pants to hold up.
 
9 October 1939, The Bee (Danville, VA),  “The Beehive,” pg. 6, col. 7:
When you tighten you belt, its a recession.
When you have no belt to tighten, its a depression.
When you have no pants to hold, its a panic.
   
Google News Archive
7 November 1939, Prescott (AZ) Evening Courier, “Hassayampa Yaps” by the Old Cattleman and His Grapevine Friends, pg. 4, col. 2:
WHEN YOU TIGHTEN YOUR belt, its a recession.
When you have no belt to tighten, its a depression.
When you have no pants to hold, its a panic.
 
7 March 1940, Joplin (MO) Globe, pg. 6, col. 1:
The difference between a recession, a depression and a panic is explained thus: When you tighten your belt, it’s a recession. When you have no belt to tighten, it’s a depression. When you have no pants to need a belt, it’s a panic.
 
Google News Archive
5 October 1942, The Evening Independent (St. Petersburg, FL), “Free Speeches” by Lee Morris, pg. 4, col. 3:
A fellow down the street says, when you tighten your belt it’s a recession; when you have no belt it’s depression, and when you have no pants it’s a panic.—Winter Haven Herald.
And if it gets any worse than that, you’re in a long war.
 
Google Books
American Farce on Broadway, 1914 to 1950
By Leroy Day Haberman
Thesis (Ph. D.)—Dept. of Speech and Drama, Stanford University
1959
Pg. 152:
There’s one sure way of tellin’ the condition of business in this country. Durin’ a recession, you have to tighten your belt a little. If it’s a depression, you haven’t got a belt to tighten. And if you haven’t got any pants, it’s a panic.
 
Google Books
Empires of the Sky:
The Politics, Contests and Cartels of World Airlines
By Anthony Sampson
New York, NY: Random House
1984
Pg. 179:
A recession is when you have to tighten your belt; depression is when you have no belt to tighten. When you’ve lost your trousers — you’re in the airline business.
Sir Adam Thomson, April 1984
 
Google Books
The Smile-High Club:
Outrageous But True Air Travel Stories
By Kathy Nelson and Allan Zullo
Kansas City, MO: Andrews McMeel Pub.
2002
Pg. 194:
A recession is when you have to tighten your belt. A depression is when you have no belt to tighten. When you lose your trousers, you re in the airline business . —Sir Adam Thomson
 
NE Business (Newcastle upon Tyne, UK)
Resilient airport is making plans
Jul 15 2009 by The Journal
THE late Sir Adam Thomson, former chairman of British Caledonian, said once: “A recession is when you have to tighten your belt; depression is when you have no belt to tighten. When you’ve lost your trousers, you’re in the airline business!”