All recessions/depressions aren't the same. You can't just say "Well, this recovery is slower than 1990" and ignore the fact we never had GDP shrink anywhere as hard or fast as in late 2008. Economists will tell you what we just went through is much closer to the Great Depression (on the heels of similar laissez faire government policies) than any of the minor downturns of the last half century. And did you just blame the Great Depression on liberal policies of HOOVER? Now I've seen everything.


Comparisons between the late-2000 recession and the Great Depression explores the experiences in the United States, United Kingdom and Ireland.

On April 17, 2009, head of the IMF Dominique Strauss-Kahn said that there was a chance that certain countries may not implement the proper policies to avoid feedback mechanisms that could eventually turn the recession into a depression. "The free-fall in the global economy may be starting to abate, with a recovery emerging in 2010, but this depends crucially on the right policies being adopted today." The IMF pointed out that unlike the Great Depression, this recession was synchronized by global integration of markets. Such synchronized recessions were explained to last longer than typical economic downturns and have

slower recoveries. [1]

The chief economist of the IMF, Dr. Olivier Blanchard, stated that the percentage of workers laid off for long stints has been rising with each downturn for decades but the figures have surged this time. "Long-term unemployment is alarmingly high: in the US, half the unemployed have been out of work for over six months, something we have not seen since the Great Depression." The IMF also stated that a link between rising inequality within Western economies and deflating demand may exist. The last time that the wealth gap reached such skewed extremes was in 1928-

1929. [2]

Bush's own advisors told him we could be facing another Great Depression.

Nobel Prize winning economist Paul Krugman predicted a series of depressions in his Return to Depression Economics (2000), based on "failures on the demand side of the economy." On January 5, 2009, he wrote that "preventing depressions isn't that easy after all" and that

"the economy is still in free fall." [11] In March 2009, Krugman explained that a major difference in this situation is that the causes of this financial crisis were from the shadow banking system. "The crisis hasn't involved problems with deregulated institutions that took new risks... Instead, it involved risks taken by institutions that were

never regulated in the first place." [12]

On November 15, 2008, author and Southern Methodist University economics professor Ravi Batra said he is "afraid the global financial debacle will turn into a steep recession and be the worst since the Great Depression, even worse than the painful slump of 1980–1982 that afflicted the

whole world". [13] In 1978, Batra's book The Downfall of Capitalism and Communism was published. His first major prediction came true with the collapse of Soviet Communism in 1990. His second major prediction for a financial crisis to engulf the capitalist system seems to be unfolding since 2007 with increasing attention being paid to

his work. [14][15][16]

On February 22, 2009, NYU economics professor Nouriel Roubini said that the crisis was the worst since the Great Depression, and that without cooperation between political parties and foreign countries, and if poor fiscal policy decisions (such as support of zombie banks) are pursued, the situation "could become as bad as the Great

Depression." [17] On April 27, 2009, Roubini expressed a more upbeat assessment by noting that "the bottom of the economy [will be seen] toward the beginning or middle of

next year." [18]

On April 6, 2009 Vernon L. Smith and Steven Gjerstad offered the hypothesis "that a financial crisis that originates in consumer debt, especially consumer debt concentrated at the low end of the wealth and income distribution, can be transmitted quickly and forcefully into the financial system. It appears that we're witnessing the second great consumer debt crash, the end of a massive consumption

binge." [19]

In his final press conference as president, George W. Bush claimed that in September 2008 his chief economic advisors had said that the economic situation could at some point

become worse than the Great Depression. [20]

A tent city in Sacramento, California was described as "images, hauntingly reminiscent of the iconic photos of the 1930s and the Great Depression" and "evocative

Depression-era images." [21]

All recessions aren't created equal. When Obama took office 13 months after the recession started it had been in force longer and was tanking faster than any other recession.

And no it didn't turn around before the stimulus could have an effect. GDP growth jumped 2 points from 4Q 2008 to 1Q 2009. Like I said it can be attributed to euphoria in a new administration and knowledge by some that the stimulus funds would be there. In late 1Q many knew specifically they had cash on the way, which increased demand. And the next quarter, 2Q, when the money started coming out, GDP growth jumped a full 6 points. All attributable to the stimulus.

(03-23-2012 08:56 PM)Max Power Wrote:  And no it didn't turn around before the stimulus could have an effect. GDP growth jumped 2 points from 4Q 2008 to 1Q 2009. Like I said it can be attributed to euphoria in a new administration and knowledge by some that the stimulus funds would be there. In late 1Q many knew specifically they had cash on the way, which increased demand. And the next quarter, 2Q, when the money started coming out, GDP growth jumped a full 6 points. All attributable to the stimulus.

Those are the talking points. I'm not buying. I do buy the euphoria idea a bit. I think there was some expectation that the "stimulus" was going to do a world of good, and that might have spurred some activity. But then that euphoria wore off and things stagnated when it became apparent that the "stimulus" was not going to solve the problem. Some say that's because the "stimulus" wasn't big enough. I say it's because the "stimulus" was the wrong thing to do.

Note that the initial descent was pretty much in line with prior recessions. What is different is that it took longer to hit bottom and reverse, and then the recovery was weaker than before.

Why did it take longer to bottom out? Maybe because Shrub tried to "stimulate" it. Or maybe we've stimulated the demand side for so long that demand and supply are out of whack and nothing is really going to work but to take our medicine. One thing that is undeniable is that this latest pattern of continual improvement occurred after the republican house told Obama "no" on another stimulus.

Don't believe the liberal media.

(03-23-2012 08:44 PM)Max Power Wrote:  All recessions aren't created equal. When Obama took office 13 months after the recession started it had been in force longer and was tanking faster than any other recession.

Note that the 13 month point is almost precisely when this recession began to be "in force longer" and tank "faster" than the previous recessions shown.

What separates this recession from the ones before 2000 (and to a lesser extent from the 2000-01 one) on this graph is not that downslope was materially steeper starting out (which would fit the "worst recession since the 1930s" talking point), but that:
1. It took longer to hit bottom, and
2. The "recovery" has been much less robust.

The graph that would fit the left wing talking points (that it was the "worst recession since the 1930s" and that the "stimulus" brought about recovery) would have a much steeper downslope, then bottom out for a period, then have a much steeper upslope. So it would be substantially lower than the red line at the 12 month point, perhaps about equal to the red line at the 24 month point, and then track back toward the blue lines after that, probably about where the 2001 line is at the 36 month point and something close to the 1990-91 line by the 49 month point. If the graph looked like that, I would buy your talking points. It doesn't.

Or the liberal Bureau of Labor Statistics, or the liberal Bureau of Economic Analysis, or the liberal Congressional Budget Office, or the liberal Associated Press, or the liberal Politifact, or the liberal National Weather Service and Park Service, or the liberal scientific consensus, or the liberal [insert any other source of information you don't want to hear]......

Been talking to some conservative friends about the VP-thing the past 10 days or so, and I'm really struck how much support Paul Ryan has for this. Reasons seem to be two-fold: First of all, he simply is a strong campaigner and advocate for GOP budget/fiscal views. Second of all, it is clear that the Democrats/Media are going to insist that the "Ryan Budget" be a centerpiece of the campaign, no matter who the GOP picks for President and for Vice-President. The GOP might as well pick the man who is best able and most deeply motivated to join the argument.

I still think Mitch Daniels would be a strong choice, BTW. But I admit I have not found anyone else -- D. or R. -- who feels that way.

I would really look forward to a debate between Rubio and Biden. I don't speak Spanish but I think Rubio would make more sense in Spanish than Biden would in English.