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Chart of the Day
From Calculated Risk, here's a chart incorporating today's bad unemployment news. We're now clearly in the worst slump since the Great Depression, and by far the worst slump in the past 50 years. And if that's still not bad enough news for you, keep in mind that we're in good shape compared to Europe and China. If and when another shoe drops (ARM resets? Eastern European defaults? a big bank collapse? an oil price spike?), it could be 2008 all over again.
On the bright side, the Wall Street Journal reports that banker pay has rebounded and is now back up to bubblicious 2007 levels. It's good to see that not everyone is suffering.
I have seen this same graph
I have seen this same graph on 20 websites already today, and I still don't really understand its usefulness. Why do we care about the percent of job losses in the economy rather than the percent unemployment figure? Why is percent losses more relevant than total unemployment? I know we had higher percentage unemployment in 1981-82. So why is this downturn worse than that? I have to get my hands on the data to see what the total unemployment chart looks like.
I will agree about the bankers. Just when you think that industry couldn't get any more ridiculous, you get stories like that in the WSJ. How can stop it? Is there anything we can do to prevent those leeches from further profiteering?
Because the graph is
Because the graph is essentially comparing business cycles and showing how rapidly things got worse from the most previous peak.
The unemployment rate during the business boom peak before the 1981-1982 bust was likely higher than the rate during the most recent peak, so if you compared unemployment rates themselves, it would be harder to capture how fast we are currently falling.
Which downturn is worse is a matter of opinion at this point.
br: "Is there anything we
br: "Is there anything we can do to prevent those leeches from further profiteering?"
No, not while they, as Sen. Durbin observed, own congress. Not sure exactly what it cost them, but it was a hell of a good investment.
As for our Savior Obama, he's at least as owned as congress. Summers earned $5M last year working one day a week for an investment bank.
I can't wait to hear GOP
I can't wait to hear GOP pols chanting talking points saying that the Keynesian stimulus approach is a failure and that we must slash govt spending and taxes instead.
And some "experts" are saying that monetary policy is too loose and risking inflation. Why does anyone listen to these people?
it's the media monopoly, stupid*
g. powell -- "Why does anyone listen to these people?"
Because it's damn near impossible to turn on the radio and hear anything else.
*I don't actually think g. powell is stupid -- I just love the cheap catch phrases
That's okay, every cat that
That's okay, every cat that I've known thinks I'm stupid.
Nit picking
I think I'm missing something here. It looks to me like 1948 is, arguably, worse than the current one, and one could make a case that 1958 is close behind. So the 'worse than the GD' looks wrong, and since the current recession is dated as 2007, the 'far worse than any in the last 50 years' seems a stretch as well.
The good news is Barney
The good news is Barney Frank is saying the government should relax the rules governing Fannie and Freddie loans for condos. That should solve the problem.
Obama said the stimulus would "add or save" 600,000 jobs in the summer. I don't think that promise will come true.
Where is all that stimulus money going? Joe Biden went to Pittsburgh to talk up the stimulus money that will help bring broadband internet to Western Pennsylvania. They couldn't even fill the room. They removed the empty chairs to save face. I guess all the unemployed rust-belters didn't think broadband was too important. I guess focusing on getting a job is priority #1.
This is Obama's economy now. Epic. Fail.
It's Not Just the UE Rate, but Also the Duration
Marcel,
My understanding is that things are a lot worse than in the '40s and '50s. Back in the good old days, we had a manufacturing economy and would frequently have mass layoffs due to the need for inventory correction. But workers would be hired back after the inventory correction.
This time around we have long term structural unemployment...
You're going to Calculated Risk Hell!
You mixed up the terms "reset" (rate adjustment, small effect as long as rates stay low) and "recast" (payment adjustment, huge effect as people have to start paying off their principal balance)! Has Calculated Risk taught you nothing?
Shame on you.
What can government do?
In our society the government is primarily structured to protect our rights and only a little to enable (mostly since FDR) people. There are limits to what it can do without taking that giant leap into Socialism. FDR came awfully close. Obama has only seen it briefly, at a distance, through GM, banks and AIG.
Of course, that doesn't prevent the public from blaming politicians for not saving them from disasters. Look at the CA mess and imagine they WON'T blame politicians in Washington for the doofi in Sacramento.
But, what can the federal government do to push/pull/encourage entrepreneurs and other employers into hiring?
At some point people have to look in the mirror and blame the Republicans who don't want government to do anything and to blame the employers who claim they're God's gift to mankind. Where are they now?
I will never buy a device
I will never buy a device that allows a company to push deletes to stuff I have. If I pay for something, I want to be in control. Nagware on our PC's, popup ads in the browsers, locked cellphones. Enough of all this crap.