Only because the Nancy Pelosi derived chart that he put up does not have a sufficient amount of context. The emphasis of showing this recession ONLY in contrasts with 1990 and 2001 is disingenious at best
Here’s one that shows a lot more context; as it shows not just 2 and 1/2 recessions but 6 for a better comparison of past events like this.
Granted, we do NOT know when the down slope of the current recession will bottom out. That said, seeing other recessions that are deeper than just the two that Elwood should give one a better feel how our economy has performed in down times.
I lived and started working during the 1981 recession – trust me, I remember the 10-11% unemployment rate and my friends crowing that they got an 18% mortgage (instead of one in the 20% range).
If government gets out of and stays out of the way, the market will correct itself. It was the meddling of government by instituting loose credit by Freddie and Fannie political cronies, low interest policies by the Fed, and the thuggery of "community organizers" in complaining about redlining that forced the Community Reinvestment Act that forced bankers to lend to those who should have never received loans (thanks, Barney and Chris!)
(H/T: Greg Mankiw)
Now, for extra info, after the jump is another chart:
Found this over at NRO along with Elwood’s original chart:
The unemployment rate is increasing at about the same pace as it has in every recession for the past 25 years (from very different starting points).
Why does this matter?
Well, I think that the second way of looking at this data tends to lead naturally to two important observations:
1. What seems to matter in getting to really bad job losses is the duration of the recession. So, speed in passing a stimulus bill is probably a lot less important than getting our countermeasures right. This is, of course, diametrically opposed to the natural conclusion one would reach in looking at the first chart.
2. The structural work on the economy is at least as important as how we deal with the recession. The stagflation of the 1970s meant that we started the ’81-82 recession at about the unemployment level that we have taken more than a year of recession to reach today. Doing something, anything, to stop the pain of the current recession, no matter what its structural effects on the economy, might seem practical, but it is not.
And to show that I believe in that phrase "moderation in all things, including moderation", let’s put this craptapulous Stimulus bill into perspective that is supposed to solve (even though our new VP Joe Biden only gives it a 70% chance to work). From RightWingNews:
"The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.
Right there, if all those Dems (and the 4 turncoat Repub Senators Snow, Collins, Spector, and Gregg who refused to support all of the other House and Senate Repubs) are that hellbent is spending all that money, then why NOT pay off everyone’s mortgage? Just think of the stimulus that having an extra $500 – $X,000 / month FOREVER! A good chunk of change to either deleverage (which sets up for spending later) now or spending now.
Once again, why NOT cut out the middleman, government, and give all that money back to the people (that it really belongs to anyways)!
