September 1, 2009

TUT-TUT, DON'T LET THE REST OF US OFF SO EASY:

What Happened to the 'Depression'?: Despite the rhetoric from Washington, we were never close to 25% unemployment. (ALLAN H. MELTZER, 8/31/09, WSJ)

The current recession is also much less severe than the 1937-38 Depression. A more accurate comparison is to the 1973-75 recession. Today's recession is as deep and most likely won't be much longer than the one we experienced some three decades ago. By pointing this out, I do not intend to minimize the damage that the economic crisis has had on individuals and businesses. But as policy makers make decisions in order to alleviate the recession, they are not helped when economists overstate its severity. [...]

First, there is a strong political motivation to make this recession out to be worse than it actually is. The Obama administration wanted to make it appear as though it saved us from an incipient disaster, so it overstated its achievements. The White House also wanted to foist its huge "stimulus" program on the country in order to redistribute income. That pleased many Democrats, but did very little to restore growth.


It's been so long since we had a real recession that many weren't even alive for it and most of the rest of us forget what it was like. So there's a sweet self-indulgence in pretending that this level of comfort is really hard times. In fact, I don't know why those old folks were always bitching--Depression is easy.

Posted by Orrin Judd at September 1, 2009 12:46 PM
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