At an industry function a couple of weeks ago, I ran into an editor at a well-known business magazine. As we commiserated over the rapid disappearance of print advertising, I pointed out that his publication still seemed to have pages. Came the response: "Yeah. Flat is the new up." Last weekend, at a suburban barbecue, I asked a friend who works for an asset management company how his firm was faring amid these turbulent times. "We're actually doing OK. Keeping our heads above water." At which point another guest chimed in: "Hey. Flat's the new up."

"Flat is the new up" is the hot business buzzphrase for 2008.

A "Money Culture" investigation—OK, a Google search and a few informal conversations—reveals that the phrase has its origins in the media world, where it has been used for the last couple of years. And it makes sense. In industries such as magazines and newspapers, in which both circulation and advertising pages seem to be in long-term decline, editors and managers have been patting themselves on their backs for simply treading water. A sample: In Richard Perez-Pena's New York Times round-up of magazines dismal second quarter, in which ad pages were down 8 percent, Conde Nast editorial director Thomas Wallace said: "The joke here is, 'Flat is the new up'." Indeed, publications that manage to maintain current levels of business are heroically outperforming the competition. The use of the phrase has spread throughout old media. In March, TV Week noted that for syndicated television ("Judge Judy," etc.), which, like the print media business, is fighting audience fragmentation and the rise of the Internet, "the ratings numbers reflect the reality that for syndication, flat is the new up." Ditto for network television. Broadcasting Cable noted in May that "in the ad bazaar of the TV marketplace known as the upfronts, flat may be the new up."

But the phrase has been spreading through sectors that until recently were hot. After the credit carange of 2007, investment bankers found their bonuses under pressure. The Wall Street Journal's deal blog reported in January that "flat is the new up," helpfully adding for readers with limited powers of comprehension: "indicating that flat pay is just as good as a bit of a rise." Law firms are supposed to be less susceptible to the economic cycle than other high-end industries. After all, when the acquisitions and IPO business slows down, bankruptcy, litigation, and white-collar defense practices tend to get new work.

But earlier this month, the Wall Street Journal law blog touched base with Kevin Conroy, an executive at Wachovia Wealth Management, which works with law firms. Wachovia's take: many law firms may find their revenues falling 5 or 6 percent this year. Said Conroy: "Flat's the new up." And now the phrase has finally infected the aristocrats of the financial world: hedge funds. Hedge Fund Research reported last week that hedge funds in the first half were down .75 percent, which, the Financial Timesreported, was "their worst first half in almost two decades." And yet, as many talking heads on CNBC noted, with the S&P 500 off about 13 percent in the same time period, being flat for the year was something of a validation for the entire sector.

So is claiming flatness as a virtue lame? It depends. When your industry is shrinking (like newspapers, or mortgages, or housing) being flat means you're bucking a powerful megatrend and gaining market share. When your rivals are down 20 percent, it indicates significant outperformance, which should reassure stakeholders. In the kingdom of the blind the one-eyed man is king. In a bear market, a flat fund is king. On the other hand, in a period of high inflation, flat is quite bad news. It means revenues are stagnant at a time when costs are rising sharply.

Above all, "flat is the new up" is a plea not to be judged on absolute terms, but on relative ones. But it's possible to take such economic relativism to extremes. A school's test scores don't budge despite the infusion of new resources? Hey, flat's the new up. A candidate's poll numbers bump along after an expensive ad campaign? Memo from Mark Penn to HRC: Flat is the new up. An online columnist's July 2008 numbers are stagnant compared with those of July 2007? You know the answer.

© 2008