Krugman: These *are* the worst of times

[BurtWorm]

http://krugman.blogs.nytimes.com/2010/07/28/were-number-one/

July 28, 2010, 8:28 pm
We’re Number One!

I’ve seen a peculiar meme surfacing here and there lately — the assertion that people like me are exaggerating how bad our current difficulties are, that things were actually worse in the 70s and 80s. I wonder where that’s coming from — and I really do; it has the feel of one of those things being disseminated on talk radio or something, and I think I hear a faint chant of Jimmy Carter! Jimmy Carter! in the background.

Whatever. The truth is that this really is the big one. Catherine Rampell recently updated the recession comparison chart, showing declines in employment. Here’s the percentage decline in employment in recessions since 1970:



We’re really number one, by that standard.

But wasn’t the unemployment rate higher in the past? Well, in 1982, although not in the 1970s, it was briefly a bit higher than the peak this cycle:

?&chart_type=line&graph_id=&category_id=&recession_bars=On&width=480&height=288&bgcolor=%23B3CDE7&graph_bgcolor=%23FFFFFF&txtcolor=%23000000&ts=8&preserve_ratio=true&fo=ve&id=UNRATE&transformation=lin&scale=Left&range=Custom&cosd=1960-01-01&coed=2010-06-01&line_color=%230000FF&link_values=&mark_type=NONE&mw=4&line_style=Solid&lw=1&vintage_date=2010-07-28&revision_date=2010-07-28&mma=0&nd=&ost=&oet=&fml=a

But back then the “full employment” level of unemployment was higher, so the increase wasn’t as large; more important, most of the unemployment was short-term, nothing like the deeply corrosive long-term unemployment we’re facing now:

?&chart_type=line&graph_id=&category_id=&recession_bars=On&width=480&height=288&bgcolor=%23B3CDE7&graph_bgcolor=%23FFFFFF&txtcolor=%23000000&ts=8&preserve_ratio=true&fo=ve&id=UEMPMED&transformation=lin&scale=Left&range=Max&cosd=1967-07-01&coed=2010-06-01&line_color=%230000FF&link_values=&mark_type=NONE&mw=4&line_style=Solid&lw=1&vintage_date=2010-07-26&revision_date=2010-07-26&mma=0&nd=&ost=&oet=&fml=a

So these really are the worst of times.

[BrklynLiberal]

1. ...and yet..not as bad as the repukes would like to make them..before November, of course.

[JuniperLea]

4. When they lose in November...

We'll hear nothing BUT how bad it is and how it's all Obama's fault.

Hmmm... that will be the meme regardless of the outcome, now that I think of it.

[BrklynLiberal]

10. I agree. I truly hope that argument is coming from the minority side of the room.

[Oregone]

2. And the best of times!

For shareholders of wedding catering conglomerates (not the actual workers)

[Jackpine Radical]

30. I meant to tell you

I think that sig pic is brilliant.

[phasma ex machina]

33. "Let them eat cake." America, home of the ME, land of the knave. nt

[cutlassmama]

3. Why doesn't the government just come out and say we're in a depression

Hell, everybody knows it already.

[defendandprotect]

17. Obama did say it -- about a month ago -- was scrubbed from Yahoo before I could pick it up -- !!

They replaced "Depression" with "Recession" --

I should have expected it and slammed it right up at DU . . .

but I took a while before picking it it -- and wham -- gone!

And, evidently, Biden also said it back in '09 --

but video is also removed --

Video: Biden says “It’s a depression”Share36posted at 8:48 am on October 20, 2009 by Ed Morrissey
printer-friendly Via Jim Hoft at Gateway Pundit, we have Vice President Joe “Loose Cannon” on video raining on Barack Obama’s Chip Diller “All is well!” approach to the economy. While the White House touts statements from some economists who believe the recession has ended, Biden told an audience that we’re not only coming out of the problem, it’s worse than you think:


http://hotair.com/archives/2009/10/20/video-biden-says-its-a-depression/


I'm also of the opinion that Congress members speak about it as a "depression" among

themselves -- a number of them -- Byron Dorgan being one -- have stumbled over getting

"Recession" out -- suggesting they were going to say "Depression" first --

and a number of them have reverted to calling this "The Great Recession" -- !!

[russspeakeasy]

47. Because if they admit it, they would be expected to act !!

[nadinbrzezinski]

52. Because we are not

depression is a very technical term, and we came very close.

What they have said is that we are in a very deep recession, which again is correct.

Words do have meaning and we should try to be precise in our use of it.

As bad as this is... I do seriously hope we don't go into a depression.

[Lucky Luciano]

60. We are not in a depression (outside of Michigan).

However, the Republicans are trying very hard to put us into a full blown depression. Probably the only thing preventing a depression are unemployment benefit extensions, etc.

[laughingliberal]

5. It's also significant that we have massive unemployment of a work force whose wages have been...

stagnating/declining for 30 years. People were already falling behind and barely hanging on. It didn't take much to totally destroy the lives of many working/middle class Americans.

[defendandprotect]

18. Most significant is that we still have the TRADE Agreements in play ...

and that very fact portends that this will all get still worse!!

[laughingliberal]

26. And...fuck me...he's advocating for more 'free trade' policies. *sigh* nt

[defendandprotect]

34. And evidently Obama and Franken think we'll come out to support that . . who's crazy here???

Us -- or them??

[dotymed]

32. The Huge Wealth Inequalities

Make it inevitable

[MedicalAdmin]

36. I know my wife and I are toast.

We are small business owners and it is ugly. We are holding on because no one in the area can do the job we do, but our income really low. We have had to scrub retirement plans, savings, etc and now have about 3 weeks in reserve. If our income drops again then we will lose the house and our company and will have to let our employees go. FYI - we have taken pay cuts but have kept our employees on without cuts so far. But we can't afford to much longer.

And now I hear the GOP has blocked a bill to help small business. They really do hate America, don't they? We need full public financing of election and K Street banned outright (if not taken into a field late at night and shot mafia style) and soon. If we don't get the money out of politics then this country, this grand experiment in the common man is done. And if that happens then those American's who still believe in democracy will have to either do something about it of find a place where it still exists.

[backtomn]

55. Silly wage nonsense.

If you include health care costs and pension benefits, "wages" have done just fine. Trust me (from experience.......current experience), these issues are VERY small compared to being out of work. I am tired of people making demands of companies....they pat themselves on the back while the unemployed suffer. Get this picture fixed before you start bitching AGAIN.

[LooseWilly]

56. "pension benefits"?

Are you living in 1982 or what? Who still has a "pension"?

Do you mean 401K benefits? The one's that lead to accounts tied to the stock markets which were one of the cornerstone justifications for the Wall St. bailouts? The ones that (from what I hear from those with jobs that actually provided that benefit) lost something like an average of 30% of their value?

Why would we "include health care costs and pension benefits" when calculating wages when 1) health care (I assume you mean insurance) cost increases aren't an increase in wages for a worker... only an increase in profits for health insurance companies, 2) pension benefits go into a fund which is at the mercy of Wall St. and Wall St. bail-outs (which, obviously, can be largely counted on... but only 70 cents on the dollar counted on) and which one is both taxed AND penalized if it is found to be necessary to pull those funds out... ?

If we're going to count health insurance cost increases and monies set aside for Wall Streeters to play with in our name (theoretically), why not also add in the nifty stealth bombers when calculating peoples wages too?... and the profits that corporate bosses can use for benefits for CEOs, and for lawyers to fight any lawsuits for any wrong-doing that the executives or the corporation at-large may wish to indulge in globally? by that metric, US workers are doing just grandly!!

:tinfoilhat:

[kenny blankenship]

6. But don't both parties now agree that high unemployment is not a big deal

so long as entrepreneurs are flush with cash needed to innovate? So long as large financial sectors - banks, insurers and the like - have govt guaranteed profitability no matter what they do, and wealthy innovators aren't "chased offshore" by high taxes, isn't all right with the world?

It's going to be all right, Paul, really! Stop worrying.

[sandnsea]

9. Quote please

I don't recall any Democrat saying high unemployment doesn't matter.

[kenny blankenship]

22. Oh dear, not even REPUBLICANS would go on record with that kind of quote

Republicans have their way: they would deny the problem really exists by saying that the jobs are out there if people want them badly enough (blaming the victim). They would misattribute the cause of high unemployment if they admitted it existed to "high taxes and too much Democrat regulation." But they would not admit that 20% unemployment really exists, that job creation is really in reverse, and then say "that's a GOOD thing for America!", or assert that it was a free market outcome and therefore, ipso facto, good, or say that unemployment at these levels was a matter of national indifference. Ultimately they need the people they fuck to vote for them. They have their style as I say. The Democratic way, post-Reagan, is to embrace Republican unconditional freedom for capital (approving "free" trade agreements, standing aside for offshoring of jobs, creating a hostile legal climate for unions, importing coolie labor, embracing a low wage and low tax "business friendly" policy kit), and to simply pass over the fact that their SHARED economic philosophy RELIABLY brings on high unemployment in complicit silence. They'll "fight" Republicans for extension of unemployment insurance. BUT WHAT ABOUT JOBS?

Bottomline: the Democrats as a party, with a minority remnant of traditional New Deal dissenters, believes in an elite-driven, laissez-faire, "supply-side" theory of economics, just like the Republicans. Both parties agree that elites of investors and corporations should be free to drive the economic ship wherever they want, pursuing their own interests, which is assumed to lead to Happy Land, while the rest of us are just along for the ride and ought to be grateful for whatever we get. Perhaps Democrats think they can put a human face on exploitation - dig a flower bed in front of the tenement house and that kind of thing. However, high unemployment is always a natural consequence of elitist driven economics; and increasingly we see from their actions that Democrats, as a party, tacitly ACCEPT this as a natural state of things, the New Normal, i.e. not a big deal. If they did not accept this view, then they would be manning the ramparts against rightwing calls for AUSTERITY MEASURES. We would see Stimulus Bill II proposed and passed with speed, and large scale public works being commissioned. The Catfood Commission would be disbanded, and its members would maybe join indicted bankers from Wall St. in foreign exile. If Democrats did not accept this Republican economics, they would voting down war funding and bloated "defense" budgets and turning that money towards PRODUCTIVE uses. But their actions -cumulatively, as a party- are all in the other direction. As it happens, my Democratic Congressman does not share bipartisan centrist elitism and militarism, and maybe yours doesn't either, but my Representative is in the Progressive Caucus that is fighting a lost war with the new DLC Rahm/Obama Democratic Party. They lose every time and are mocked for their efforts to retain a living memory of the New Deal party of FDR-to-LBJ by certain assholes who plague this site. Oh I don't mean you, you would never do that I'm sure.

[sandnsea]

29. A jobs program fell on your head

and you didn't see it. Obama's jobs programs have been posted repeatedly, plus the fact that he's already created nearly a million jobs with the stimulus, and FDR didn't even start the WPA until 1935 and it only paid twice that of a welfare recipient and well below union wages. Do you know they collected taxes on social security for several years before the first benefit was paid? Can you imagine a Democrat being able to do that today?

http://www.digitalhistory.uh.edu/database/article_display.cfm?HHID=473


And I tend not to take anybody seriously who uses the phrase "catfood commission". Only people who have no clue what it's like to have no food would make a joke of it.

Jane Hamsher is an idiot. You need to do your own research once in a while. The world wasn't rosy under FDR either. Watch the movie Cinderella Man to see just a glimpse of the tragedy people were really living in. Remember, no food stamps, no heat assistance, no housing vouchers, no college loan money, no child care help, no medicaid or medicare, welfare that was less than todays. Wake the fuck up. Imperfect Democrats brought that to you and continue to.

[LargeGreenSpider]

11. Innovate? The US private sector?

ROFL.

[kenny blankenship]

23. What's so funny - don't we all have iGadgets now? Don't we all tweet?

Isn't that the foundation of a sound economic house?

[femrap]

40. Rich people just

sit around counting their money...they're not going to loan it out to some risky start-up. Plus they're lazy...they inherited all their wealth (most of them).

There's little creativity, imagination, or critical thinking left in this country...thank you, crappy public education system that isn't funded properly. We teach kids to obey, never question and go play video games.

[AlbertCat]

53. Hmmmmmmm...

Rich people just sit around counting their money...they're not going to loan it out to some risky start-up. Plus they're lazy...they inherited all their wealth (most of them).



How is this statement different from "The unemployed are lazy and don't even want to work!"?

or "Blacks just hate whites. Look at the NAACP!"?


Thanks for playing!

:eyes:

[BootinUp]

12. Link? Cite? anything other than a made up narrative? nt

[defendandprotect]

20. Well, the FED has never seem it as a problem . . . but Congress is supposed to be setting economic

policy -- not the FED --

We can't fire the FED -- we can fire our elected representatives --

Economy is a political question --

FULL EMPLOYMENT should be the answer --

On the other hand, we have to move on to socially responsible government --

democratic socialism --

Otherwise, capitalism and its exploitation of nature and humans will bring us only more

evil and more ruin!!

[defendandprotect]

24. Wasn't that always Greenspan's message: Less employees = Higher profits for capitalists ...???!!!

[sandnsea]

7. There was over 50% stock market crash

The 1987 crash was 30% and rallied quickly afterwards.

Yes, this is a really bad economy and would be a full on Depression with last year's stimulus, the bail-outs, new regulations, and even the temperate approach Obama has taken with business so as not to create too much turmoil in the recovery.

I don't know what people thought this was.

[Greyhound]

25. The DJIA is not the economy. People's ability to earn a good living in exchange for their lives is.

The actions you mention only ensure that the system will grind on and the general welfare will continually lose ground to the select 'winners'.

Mortgaging the future to accelerate mistakes is insane on it's face, and what you seem to advocate.

[laughingliberal]

27. +1000 nt

[sandnsea]

28. It's exactly what happened in the 30s

The stock market and banks crashed. What do you think caused all of that unemployment in the 30s? Unemployment that was higher than ours is today, WITH federal job programs.

[femrap]

43. I don't believe today's

gov't provides the true unemployment picture. 99ers aren't counted. You can dig into some of the Bureau's reports and see the under-employed. Or check out John Williams site at ShadowGovernment.com

Some estimate today's unemployed/underemployed at 25%. That's close to the '30's. Remember in the '30's, millions were farmers and able to at least feed themselves. My grandparents were farmers then. Hobos stopped by and my grandmother always fed them. Kids in town weren't so lucky.

Now there are really no farmers to speak of....it's all Big Ag. Gardening helps a bit.

Do you think today's youth would go camping and build/dig a huge lake or dam like they did in the '30's? (Without video games?)

I believe we are on the threshold of increasing violence. The separation between the small uber-wealthy and the former middle class/working classes is just too damn big. This results in violence. People can be pushed only so much. And that's why the Police State has been put in place....these wealthy people know what's gonna happen. Gated communities, security cameras everywhere. It's to protect them, not us.

And if you don't have a job, you don't have health care. And even if you do have a job, you may not have health care....affordable, that is. $315 for one x-ray of my hip...maybe 60 seconds it took.

This country is toast. The empire is falling.

And what really makes the difference between a recession and a depression is a drought/flood/EQ. Remember the dust bowl???? Dust blew all the way from the Plains to DC.

I'm glad we have the safety nets that FDR set up, but the system is corrupt. TPTB have gone too far. Next thing will be a false flag and all the unemployed can join WW3.

WASF.

[Greyhound]

46. The market crash was vaguely similar in that the banksters were gambling with and stealing

their depositors money, but exercising the power granted them in 1913 was, and still is, the immediate cause. The banks are not controlled by the government and they simply exercised their ability to stop lending, and stopped the economy in its tracks.

The great depression was not some "unintended consequence", it was a power struggle between the banksters and the people, just as it is today. They tried to beak us through deprivation and when we refused to give in, they resorted to an attempted coup. This time around "we" immediately capitulated.

Nothing is so empowering as total surrender.:sarcasm:

[girl gone mad]

31. The bad debts didn't just simply disappear into thin air.

They were transferred onto the public balance sheet. This has the potential to create a much more significant amount of turmoil.

The bailouts were engineered to rescue a small group of gamblers from their own mistakes by propping up a broken and utterly corrupt system.

The stock market decoupled from the real American economy decades ago.

[xchrom]

8. Recommend

[valerief]

13. Not for the Already Rich. nt

[defendandprotect]

14. Nor have we ever had LABOR so thrown to the capitalist wolves . . .

there were always tariffs to protect our workers --

So -- yes, the trade agreements have to be overturned -- otherwise they portend

for even worse days ahead!!

Obama, himself, a month or so ago in an article that appeared briefly before being

scrubbed referred to this as a "Depression."

Certainly there are many more than 14 million seriously underemployed or long term

employed --

and certainly rate is much higher than 9% -- more like 17% -- at the least.

:)

[ParkieDem]

15. Another interesting observation

Between 1970 and 2005, unemployment was originally deeper during recessions, but shorter-lasting. As the year progressed, unemployment during recessions gradually became less pronounced, but longer-lasting.

[Greyhound]

16. What they're hiding their eyes from is the fact that this is a paradigm shift* downward.

A whole new reality of far lower expectations and compensation for one's life that is far worse than the last one in the 80's. It seems this economic/societal stratification will most likely lead to the "Balkanization" of the U.S.

And remember who really made out after the collapse of the Ottoman Empire...
:kick: & R



*a change in a fundamental model.

[leftstreet]

19. They're not hiding 'their' eyes from it...they're trying to hide 'ours!'

And you're right on!

[defendandprotect]

21. Class warfare and unfortunately our schizophrenic Constitution set us up for it --

land and votes -- and control of natural resources -- for the wealthy elites --

on and on --

[LooseWilly]

57. The US middle class is steadily more resembling the Mexican middle class

... in living standards.

They have DSL and credit card debt in Guadalajara too, make no mistake.

[scentopine]

35. Geithner and Obama working hard to outsource your job

Summers, Geithner, Bernanke and Obama - the four horsemen of the middle class apocalypse.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4452286

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4335782

And we still give foreign aid to India.

http://www.fas.org/sgp/crs/row/RL31362.pdf

[Skittles]

37. yup

they don't give a flying fuck about unemployed Americans

[w4rma]

38. I think they actually want more unemployed Americans to force our wages down further.

It all goes together.

I tell you. I expect Republicans to lie to me. But, I didn't expect Obama to do what he has been doing.

[Skittles]

41. I don't think anyone is looking out for us now

it's pretty obvious that corporate America rules in politics

[w4rma]

42. Wall Street's benefactors are beyond not looking out for us and are on to hunting and farming us. nt

[Skittles]

49. you are SO correct

:o

[Tierra_y_Libertad]

39. No. We just have to "patient" and eat our ponies.

[femrap]

44. I'd prefer to eat

the rich.:evilgrin:

[LooseWilly]

58. Or, if you don't have a kitchen for cooking them...

you might just try shoplifting in their stores... it's not like the minimum wagers working the place really give a damn.

;)

[bvar22]

45. Hey....don't be badmouthing the economy!

I'm first in line in my area for the new, high-paying NAFTA job that Clinton & the sensible, pragmatic Centrist Democrats promised in 1994.
.
.
Its been along time, but you can't just wave a Magic Wand, you know.
.
.
.
I trust the Democrats and FREE TRADE. They wouldn't lie to me.
If you guys keep talking like that, you could ruin my new, high-paying NAFTA job.
Should be any day now.
.
.
.
Yep. Any day now.
Cause everybody knows that the Democrats care about the American Worker.
.
.
.
.
Probably tomorrow
:party:

[upi402]

48. Bush recession not being fixed

Only thing fixed is this rigged game and captured government -both parties -elephant in the living room and it smells already!

[TheKentuckian]

50. The era of benign neglect is past, now it is war and not just with the middle class

They'll be gunning to hunt about everybody's fields down. Pick them off one by one and a little at a time.

Professionals for a time thought they were exempt but lawyers are demonized constantly but their trade and connections gives them the ability to fight and evade. Now the long knives are out for the relatively low paid teachers (for holders of advanced degrees and level of responsibility).
In the distance you hear the rumblings for the doctors (that's why the hethcarr so high) and I even read a post the other day where management was telling the nurses they make too much.

How long before conservative areas start talking about and going through with privatization of their police to supposedly save money and cut taxes?
Then they will also have their "Pinkerton" types as a yep for one bonus.

They are looking to get us all that work for a living or would like to. We're looking at a push for global wage equalization is what it smells like to me. The BIG squeeze is on.

It's sheep to the slaughter if we don't stop playing their phony games and stiffen our spines and make them do it or cast them to the side.

[bertman]

51. Too late to rec, but here's a kick.

[backtomn]

54. Some things were clearly worse in the 70's/80's

Unemployment under Carter/Reagan was over 12%.......Inflation was at least 4 TIMES higher.....while interest rates are falling now, they were around 18% then. I am not sure which measurements were better then.

However......we need to quit whining about better times or worse times and get some things fixed. We have had corrections in the past and we can have them now. Get on with it. Obama can have 2 terms and be considered one of the best, IF he can quit complaining and get it done.

[4dsc]

59. Yet no one, republican or democrat, have any real plans

to get these people back to work.

We are caught in a very vicious circle of demand and jobs creation. Since jobs have been destroyed, demand is down. And you don't increase demand until jobs are created. Thus the dilemma of which one is going to be increased enough to effect the other one in a positive way.

Sad to say though neither party has the answer or solution for any kind of long term growth.