The Current Recession versus the Great Depression

The economy's mild second quarter contraction has many proclaiming the recession over. Now is therefore a good time to survey the current recession so frequently compared to the Depression. It's natural to ask: how do these economic heavyweights measure up?

When prizefighters step into the ring – a tale of the tape – a comparison of their primary physical attributes is revealing. A comparison of the economic and fiscal attributes is equally illustrative here.

Variable

Great Depression

Current Recession

GDP

4 straight years of negative growth
2
1
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Tags: Jobs , Economy , Recession , Great Depression
J. T. Young

J. T. Young

J.T. Young was Communications Director in Office of Management and Budget (2003-2004) and Deputy Assistant for Tax and Budget Policy at the Department of Treasury (2001-2003) in the Bush Administration.

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Jack1890 Wrote: Sep 14, 2009 11:03 PM
Again, the right half of the article is obsured. AOL is totally inept.
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None1945 Wrote: Sep 14, 2009 6:31 PM
These comparisons are nice talking points, but are largely meaningless.

As to point 1, we're still early in the game, so don't hold your breath.

As to point 2, I don't believe the Feds maintained separate U6 and U3 rates of unemployment. The U6 rate is now approaching 20%, and many economists are predicting it will top out around 25%.

As to point 3, equities did not lose 89% of their value in one fell swoop during the depression. Instead, there was a W-shaped decline, with the second downward leg being much deeper than the first. The last time I saw a chart comparing equity indexes from the great depression to the current recession they look eerily similar. We'll see if we have a second downdraft.

As to...
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whoodat Wrote: Sep 14, 2009 5:00 PM
"Wall Street does not believe Obama. They do not trust him."

Really? I believe this just wishful thinking on your part. The 17% rise in the DJIA since he became president belies, your once again, poor interpretation.

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Jim3677 Wrote: Sep 14, 2009 3:40 PM
until after Hoover intervened for a couple years. Give it time. Then the depression did not end until the war ended (how could anyone believe conscription, fire bombing and atomic bombs count as recovery.) Both the planners' intervention and the war are not required to recover now. Campaign for Liberty
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George1 Wrote: Sep 14, 2009 2:12 PM

When Obama said that he has always been a proponent of the "free market system", the traders on the floor of the NYSE boo'ed.

When Obama finished his speech at Constitutional Hall, the traders on the floor of the NYSE cheered softly.

When asked about the so-called disconnect, Steve Grasso said that the traders were not applauding Obama, but rather the fact that he had stopped talking.

Wall Street does not believe Obama. They do not trust him.
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Neal from PA Wrote: Sep 14, 2009 1:24 PM
The price of everything (monetary and otherwise) will continue to rise. While the poll numbers of politicians will continue to drop. Yet "we" have not seen nothing yet that compares to the "Great Depression"; but we most certainly will, it's only a matter of time. It was the preparations for and WWII itself and America that lifted the world out of the "Great Depression". This time...what will it be...another WAR...for it will not be politicians robbing from Peter, to give to Paul. This time America cannot afford too. Then again, WE THE PEOPLE, will find away...we have done it in the past and we can do it for the future of this great nation, under GOD, indivisible, with truth and justice for all.
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Reba5 Wrote: Sep 14, 2009 11:59 AM

I guess Economics 101 is one class that is not taught at Harvard Law School. It is simple, never spend more than you bring in to avoid a negative cash flow. But then the ability to print money was never factored in while learning Economics 101. Only the government has that privilege.

Therefore, it has be up to all of us who provide tax revenue to the government to cut off the spigot of mass spending. Tax revenue income is down this last quarter, we need to keep it lower. Declare more deductions on your payroll, enter more deductions on your tax return. My accountant once told me, "When in doubt, deduct". I used that method during the years I ran a small business and it worked to prevent more of my taxes going to...
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Jim1750 Wrote: Sep 14, 2009 10:31 AM
I agree that the current recession does not rival the Great Depression; but, it's early yet. The tax hikes have not hit yet. The hyperinflation that is coming thanks to out-of-control spending -- an order of magnitude higher than anything Bush did -- has not hit yet. Unemployement will continue its inexoriable climb. Then, of course, there is a pretty good chance one or more cities will get nuked by an Iranian or North Korean sponsored terrorist group. We havn't seen anything yet.
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gary2824 Wrote: Sep 14, 2009 10:02 AM
I`m still looking for the"shovel ready jobs" that obama keeps (or was)refering to,as a result of his"pay offs for election votes" from all of his "special interest buddies" that surround him like a cloud.
They should be subject to filing bankruptcy just like the rest of us,and restructuring their practices to be more realistic and practical,not to continue with "business as usual",as they have been allowed to do with our money.
I know what obama and his cronies are shoveling,and it`s not jobs,I can assure you of that.
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gary2824 Wrote: Sep 14, 2009 9:55 AM
I,along with millions of other small business owners,am wondering,when do we:"the backbone of the American economy",get our "bailout money'?The fat cat liars in this current administration as well as all the others that the mush-brained idiots have voted into office,aren`t doing without anything ,while they cut the middle class to shreads,and dole out OUR TAX-DOLLAR MONEY to those who are responsible for this mess they have created.What`s appalling to me is the way that Americans are sitting on their hands as though to say:"Oh well,we have to do something."
We don`t have to sit and watch this destruction of our great nation by a bunch of pc,liberal,apologetic socialists.they don`t want entrepenuers with dreams and goals of...
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Kenny Blankenship Wrote: Sep 14, 2009 9:55 AM
It’s obvious that low interest rates, surging government spending, dollars injected into banks, sweeping government guarantees made a huge difference in staving off a major depression.

The only question left to be examined is which of the government's intervention techniques was the most effective.
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gary2824 Wrote: Sep 14, 2009 9:54 AM
I,along with millions of other small business owners,am wondering,when do we:"the backbone of the American economy",get our "bailout money'?The fat cat liars in this current administration as well as all the others that the mush-brained idiots have voted into office,aren`t doing without anything ,while they cut the middle class to shreads,and dole out OUR TAX-DOLLAR MONEY to those who are responsible for this mess they have created.What`s appalling to me is the way that Americans are sitting on their hands as though to say:"Oh well,we have to do something."
We don`t have to sit and watch this destruction of our great nation by a bunch of pc,liberal,apologetic socialists.they don`t want entrepenuers with dreams and goals of...
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Michael1500 Wrote: Sep 14, 2009 9:50 AM
Above the photo--where you have the options to "forward", "print", "share", and "single page"--if you select "print" it'll format the page so that it is ready to print. In this format you can see the entire chart.
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gary2824 Wrote: Sep 14, 2009 9:49 AM
I,along with millions of other small business owners,am wondering,when do we:"the backbone of the American economy",get our "bailout money'?The fat cat liars in this current administration as well as all the others that the mush-brained idiots have voted into office,aren`t doing without anything ,while they cut the middle class to shreads,and dole out OUR TAX-DOLLAR MONEY to those who are responsible for this mess they have created.What`s appalling to me is the way that Americans are sitting on their hands as though to say:"Oh well,we have to do something."
We don`t have to sit and watch this destructjion of our great nation by a bunch of pc,liberal,apologetic socialists.they don`t want entrepenuers with dreams and gaols of...
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Lee47 Wrote: Sep 14, 2009 9:46 AM
I looks like great information but the problem is like this current so called administration. It's trying to stay hidden. :)

Let me know when you have it fixed.
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poorgrandchildren.com2 Wrote: Sep 14, 2009 9:09 AM
Dallas, what is so "nice to have" about an unconstitutional (illegal) Healthcare Control Bill giving the Political Class even more power over us?
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TX Yankee Wrote: Sep 14, 2009 8:39 AM
Measure these two fights any way you want...our current fiscal fiasco is going to be the ruination of this country. Healthcare is a "nice to have," while restoring fiscal sanity to our budget is a "MUST HAVE" right now.
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Michael2677 Wrote: Sep 14, 2009 8:30 AM
please format the page correctly
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MIke3094 Wrote: Sep 14, 2009 8:28 AM
I was taught that in an economic slow down that if you are working it's a recession. If you lose your job it becomes a depression.
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Barack-A-Sorros Wrote: Sep 14, 2009 2:49 AM

Two days ago Obama while giving a speech in Minn. told people we need to do healthcare reform now because a recent study shows in the next couple years, thousands will lose their healthcare coverage because they lost their job.

Even Obama is now admitting his stimulus plan is not going to work.
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