How Bad Is It? (Monday Edition)

Another conclusion: reliance on tax cuts as the sole – or even primary – recovery tool is either stupid or nuts, or a rare combination of both. Somebody please tell Boehner, Cantor, McConnell and both the Arizona Boneheads.

Thank you so much for this clarifying post, KT.

Is the turquoise line supposed to be Dec 07 as labeled or Dec 08?

The Republicans Boehner, Cantor, McConnell etc. all represent great states... specifically the state of Denial! They've joined the Rush Limbaugh wing of the party that hopes that Obama fails and so does America. All the people are Republicans first and foremost. America is only important if it fits their agendas.

The stimulus package probably has a 3 to 4 month start-up window at best, which means no real results for 5 months and a reduction in unemployment maybe in August or September which is short circuited by the normal November-December layoffs, which means probably January 2010 at best. Everyone needs to realize that because of the gaming of the unemployment numbers the real rate is over 11%. We could see 11% in faked numbers before this is all over with a real rate exceeding 15%. Can't tell you how much pain and suffering we are going to be in for.

On another subject the food-power crisis in rural Alaska is finally getting some major press. This may well be Gov. Palin's own Katrina. Once again a Republican leader ignores a serious human survival crisis. Wouldn't it be interesting if the Federal Government declared the Alaska situation a national emergency and began airlifting food and supplies to rural Alaska because the State of Alaska can not handle the situation. Talk about a stake through the heart move. But then again why disable an already disabled Republican who would be a disaster as her party's nominee.

Here is what I see from the graph and feel free to correct me if I am wrong. In 74 the initial down turn to the low point took around 8 months. Now according to the graph us getting to almost the same low point took 13 months. But when I look at literally where we fell off the cliff in 74 vs where we fell of the cliff last year it appears that we are falling faster. From the graph it looks like in 74 it took about 5 months from month 3 to month 8. But on the graph line for the current crisis we fell off the cliff around month 9 to month 13 which would be 4 months. And really even if the bill is passed I don't think it will change the trend line down for this month which would mean that we will be looking t 81 numbers but we would have achieved them in a matter of 14 months as opposed to 17 months.
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And these stupid muthaphuckas keep asking why we need to move fast? Jeebus.

Here is what I see from the graph and feel free to correct me if I am wrong. In 74 the initial down turn to the low point took around 8 months. Now according to the graph us getting to almost the same low point took 13 months. But when I look at literally where we fell off the cliff in 74 vs where we fell of the cliff last year it appears that we are falling faster. From the graph it looks like in 74 it took about 5 months from month 3 to month 8. But on the graph line for the current crisis we fell off the cliff around month 9 to month 13 which would be 4 months. And really even if the bill is passed I don't think it will change the trend line down for this month which would mean that we will be looking t 81 numbers but we would have achieved them in a matter of 14 months as opposed to 17 months.
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And these stupid muthaphuckas keep asking why we need so move fast? Jeebus.

One of my memories of the 81-82 recession is that Reagan did an excellent job of breaking the backs of Unions so that the jobs that did return were significantly less lucrative (and significantly less based on manufacturing) than the ones that were lost. I also have the impression (not guaranteed accurate) that there was a sharp increase in the reliance on lines of credit and home-equity loans to make up for the loss of direct income. (If I'm wrong about any of this, then by all means, someone who knows better should chime on in!)
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That tells me to, that direct comparisons will always fall short. From where I sit, it appears that the manufacturing backbone that we lost in the eighties never recovered adequately and that we're now expreiencing the backlash of relying on an economy that doesn't actually produce value, but merely shuffles it around.

Here is the federal funds rate historically http://www.newyorkfed.org/markets/statistics/dlyrates/fedrate.html

The striking difference, and what makes this downturn so scary, is that we don't have monetary policy to help get us out of this mess.

Very informative, but I found the less-saturated colors hard to see. Any chance of making the older dates lighter/less saturated and the newer dates progressively darker/more saturated? (Imagine it in gray-scale).
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Excuse the design nerdiness.

An observation if it is valid and not just random occurrence, it is really really scary.

Length of time it took to regain all jobs lost. That is for the line to come back to zero.

1974 - 19 months
1981 - 28 months
1991 - 32 months
2001 - 48 months

As you can see, each subsequent recession has taken longer time to regain all lost jobs. One reason that I can think of, in each recession, US became more open to out-sourcing and it took longer to gain job in US. If this is valid and trend continue, this will not only be deeper job recession but would take much longer than all earlier recession.

US became more open to out-sourcing and it took longer to gain job in US.
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The trouble with that logic is that there is a point when foreign labor markets will be saturated as well, and the advantages of offshore labor will diminish. This is actually as it should be. The disparity in standards of living between the US and other countries is NOT something to be proud of.

[...] This one is from Swampland. Their comment: What do we learn? So far the fall in employment is comparable to that in 1974-1975 and 1981-1982. If the comparison holds, the declines should end within the next four or five months. But we of course have no idea whether the comparison will hold. Past performance is no guarantee of future results. [...]

[...] How bad is it? This is how we stack up against a few other recessions: [...]

[...] How Bad Is It? (Monday Edition) [...]

Paul, we are long way from saturating foreign labor market. India and China are both 1 billion plus population. I am from India and trust me, we are not even scratching the surface of cheap labor pool.

Paul: " The disparity in standards of living between the US and other countries is NOT something to be proud of."
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While I agree with you, this is something that's supposed to stay inside our heads, and not said out loud. Could you ever imagine a politicians saying this? He/she couldn't get even elected Assistant to the Regional Dogcatcher.
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damn - that really was scary. Nancy appearently has some good staticians (:

Any chance of getting the Mother of all Depressions - 1929-1940 - on there, for purposes of comparison?

Apparently, Feilding Cage doesn't know the difference in an apostrophe and a single open quote.

It looks like the inflection point (change of slope toward bottoming out) generally occurs at about half the maximum job loss percentage.
 
Unfortunately, in this recession, we haven't reached the inflection point yet. Even in the rosiest of scenarios, where today is the inflection point, the job loss percentage would reach 5%.
 
However, given that nothing has actually stimulated the economy yet, I'd say that we haven't yet reached the inflection point, and the maximum job loss percentage will be significantly higher than 5%.

People talk about the recession like it's a deviation from what was once a rosey picture, but the fact of the matter is that things have been bad for awhile, and we've just kept our heads in the sand about it.

We have current problems. We don't invest enough in infrastructure and the private sector produces too many jobs that reshuffle things rather than make them.

But we also have a too rosey view of the world how it is, we have to realize that yes, America is part of the world at large, and no, we can't just ignore it.

Oizydozy thats what I was looking for when I looked at the graph and since I didnt see it, I assumed it may begin a few months after so called shovel ready projects are brought online.

Be interested to see how effective the stimulus is that is how long the economy will be in the reccession, given previous situations.

QUOTE::nsb123 Says:
Monday, February 9, 2009 at 12:07 pm
An observation if it is valid and not just random occurrence, it is really really scary.
Length of time it took to regain all jobs lost. That is for the line to come back to zero.
1974 - 19 months
1981 - 28 months
1991 - 32 months
2001 - 48 months
As you can see, each subsequent recession has taken longer time to regain all lost jobs. One reason that I can think of, in each recession, US became more open to out-sourcing and it took longer to gain job in US. If this is valid and trend continue, this will not only be deeper job recession but would take much longer than all earlier recession.
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Very good point I didnt notice that, it better not be an unbounded, I dont know what to call it. I wonder if somebody can do a regression analyisis on how bad reccessions are getting in monetary loss adjusted for inflation and how bad theyre getting in terms of how long it takes to recover form them.
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Also - what is the tipping point where we start calling this one a depression - and whats the possibility of other emerging economies in the world recovering before the U.S. does?

1981's reccession was 9 months longer than 1974s 6 year break
1991's reccession was 4 months longer than 1981's 10 year break
2001's reccession was 16 months longer than 1991's also 10 year break
2007's reccession came early after a 6 year break and lets hope it doesnt last the avg of 9.66 months longer than the last one which lasted 48months.

Thanks for making this improvement--it is now obvious that this is not much different than either the 1973/74 or the 1981/82 recessions. Someone wondered why it dropped so fast in the last 4 months--well, September was when Paulson started running around like a chicken with its head cut off. And that is when unemployment took a STEEP increase--the statements of "leaders" has a direct impact on the real economy. If Obama keeps up his doom and gloom talk, then, yes things could get even worse. He is either ignorant of the impact his words have (saying things like "catastrophe" and "we might never recover") or he is INTENTIONALLY trying to bring about a depression to further his socialist ambitions, ala FDR in the 1930's. This is either ignorant or treasonist--take your pick.