Wednesday, December 8, 2010
Scary Chart...
I've published this chart before; but it was time for an update. The basic message here is that we're in the mother of all recessions, no matter what kind of blather you're hearing from politicians, economists, or “settled science”. Read it and be afraid, especially of that almost-flat bottom. Where's the steep upturn that we see in nearly all the other recessions? It ain't here yet, that's for sure...
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This doesn't go back far enough to take into account the great depression. Or maybe its deliberately only "recessions"> Is there anything that shows essentially this same chart with the depression also overlaid? So we can see how that also compares?
ReplyDeleteYeah, that chart was intetionally comparing recessions, not depressions (which are much worse, and generally longer lasting). The difference between depression and recession doesn't seem to be widely agreed on. The best definition I've seen is that a depression is a downturn in gross national product of 10% or more, a recession is any downturn in GNP that's less than 10%. So not much difference. However, there does seem to be a pattern wherein depressions are much worse than recessions generally are...
ReplyDeleteBasically both are economic downturns, just varying severity? Then it would be fair to compare recessions and depressions together if you want to get an idea of how bad this is.
ReplyDeleteFrom what I understand, the great depression essentially lasted 10 years right? So on the order of 120 months. The longest recession on this chart appears to span about 46 months? Just nowhere near as deep. I also understand the great depression to have had about 20% unemployment.
This recession has hit about 10% unemployment the best I can tell, higher in some areas than others, and lasted about 37 months. We could probably plot this out but using the bottom point in the above chart we are looking at a 50 month span, but since that bottom could be fairly "wide" I'll bet plotted out even using current as the mid-point you are at around 72 months then by doubling the current length.
No doubt unemployment and other social benefits have kept us from seeing food lines everywhere despite the unemployment. Something not available during the great depression. Also somethign we will be paying for for a long time to come.
I wonder though, did any of the stimulous or other bailout stuff actually keeps us from something worse than the great depression? Lessen the depth of the current recession but stretch it out longer? Isn't that essentially what happened to Japan in "the lost decade"?
Anyway, I'd really like to see more comparisons that take into account that type of thing.