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The Economy Is Bad, but 1982 Was Worse
New York Times ^ | January 20, 2009 | DAVID LEONHARDT

Posted on 01/22/2009 3:09:01 AM PST by expat_panama

You often hear that we are now living through the worst recession since the early 1980s, and the comparison is not wrong. But it’s ultimately unsatisfying, because it is a little too vague to be useful.

Is the economy only a little worse than it was in the last couple recessions, as some have said, and still a long way from the dark days of 1982? Or are we instead on our way toward something that may even approach the severity of the Great Depression?

[snip]

The ranks of unemployed and underemployed, controlling for the size of the population, were much larger in 1982 than today.

[snip]  

The recession of the early 1980s doesn’t have a catchy name, and almost half of Americans are too young to have any real memory of it. But it was terrible — qualitatively different from the mild recessions of 1990-91 and 2001. The first big blow to the economy was the 1979 revolution in, which sent oil prices skyrocketing. The bigger blow was a series of sharp interest-rate increases by the Federal Reserve, meant to snap inflation. Home sales plummeted. At their worst, they were 30 percent lower than they are even now (again, adjusted for population size). The industrial Midwest was hardest hit, and the term “Rust Belt” became ubiquitous. Many families fled south and west, helping to create the modern Sun Belt.  

Nationwide, the unemployment rate rose above 10 percent in 1982, compared with 7.2 percent last month. But that rate has a couple of basic flaws, as I’ve discussed in previous columns. It counts people who have been forced to work part time, even though they want to work full time, as fully employed. 

[snip]

(Excerpt) Read more at nytimes.com ...


TOPICS: Business/Economy; News/Current Events; Politics/Elections
KEYWORDS: 1982; bhoeconomy; depression; economy; recession
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To: expat_panama
Does anyone but see notice that their research actually shows that current unemployment is still not as bad as when Clinton was president?

They are actually being kind to the first Bush, which is when most of that unemployment spike took place.

41 posted on 01/22/2009 5:13:12 AM PST by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: cva66snipe
Don't forget CH Butcher, Jr. also headed up the C&C Bank “chain” that included numerous C&C Banks of various counties, including the headed by Jake & CH’s father Cecil Butcher, Sr. The jump in interest rates and recession caught them over leveraged.
42 posted on 01/22/2009 5:14:33 AM PST by TennMountains
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To: rbg81
"...banks were a rock of stability in 1982 compared to today."

Right, and kids never talked back to their parents and we had to walk 3 miles in the snow to school uphill both ways  .. ..

43 posted on 01/22/2009 5:14:57 AM PST by expat_panama
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To: expat_panama

If you think 1982 was bad, wait until 2011.


44 posted on 01/22/2009 5:16:01 AM PST by Dead Corpse (What would a free man do?)
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To: rbg81

CDOs did exist - they were even around in 1873.

And BTW, folks, read up on the depression of 1873 because that’s where we’re likely headed.


45 posted on 01/22/2009 5:20:24 AM PST by nicola_tesla (www.fedupusa.org)
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To: expat_panama

If you can explain why the banking situation was just as bad back then, I’d like to hear it. As I recall, the biggest banks in the country weren’t in jepoardy of being nationalized back then, with private equity holders being sqeezed out.

Memories aren’t perfect, but sometimes things WERE better in the past.


46 posted on 01/22/2009 5:22:13 AM PST by rbg81 (DRAIN THE SWAMP!!)
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To: Moonman62
They are actually being kind to the first Bush...

No, the party line is that Clinton presided over the longest recovery, and the way they made it the longest is they began dating it to before Clinton took office.

Yes, I know it's crazy, but this is exactly what they're saying!

47 posted on 01/22/2009 5:24:40 AM PST by expat_panama
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To: arthurus

Post #12. Bingo. See my Tagline.


48 posted on 01/22/2009 5:31:50 AM PST by randita (If the government could "fix" the economy, we'd never have a recession.)
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To: expat_panama
The big truth is that the recession of 1981-82 was simply necessary to kill the inflation that had built up, starting with late Johnson and Nixon. Reagan and Volcker sucked it up, did what had to be done, took the political heat for the undoubted pain, and got the rewards in the election of 1984, the long boom of 83-now (even with the dot-com bubble and the housing bubble).

Probably, we will work our way out of this, one way or another, as long as the money-printing stays within reasonable bounds -- that will be the big task for the GOP and the reasonable dems.

49 posted on 01/22/2009 5:34:23 AM PST by BohDaThone
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To: expat_panama

The DBM is addicted to gloom and doom. They can’t help themselves. But they’ll always find a way to blame the crisis on the GOP or the “rich”.

When Bush was President, the buck stopped with him - everything that went wrong was his fault. For a while, he will still be the scapegoat, but when that’s no longer believable, someone/something else will get the blame. It will never be Obama, however.


50 posted on 01/22/2009 5:36:49 AM PST by randita (If the government could "fix" the economy, we'd never have a recession.)
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To: bronxboy
"Back then, there were regulations in place...the banks acted more responsibly."

Exactly. We would not be going through this, or maybe no where near as severely had the banks been so naively left to regulate themselves.

51 posted on 01/22/2009 5:39:41 AM PST by DaGman
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To: expat_panama
Read it and weep...

http://www.bls.gov/news.release/pdf/cpi.pdf

For the last year, overall prices increase .1 %, so by the CPI, you are correct, overall prices have not yet declined for a full year.

But that is the lowest increase since 1954, and the fall in prices has just begun.

Fine, but was there ever a time you've said it wasn't bleak?

Not recently.

52 posted on 01/22/2009 5:41:11 AM PST by A.Hun (Common sense is no longer common.)
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To: expat_panama

Worse only as in this moment in time. Not worse when considering alll the financial data that suggests this is getting worse by the day. See us in 30-60-90 days and compare.


53 posted on 01/22/2009 5:45:26 AM PST by CodeToad
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To: rbg81
"...explain why the banking situation was just as bad back then, I’d like to hear it."

Well, maybe you would and maybe you wouldn't but my guess is that your mind is set and there's no possible explanation you'd ever be willing to accept. 

In the meantime, I'm like most Americans.  We're personally not as well of as we were say, last year, but our incomes are still rising and our wealth is still even higher than the peak we had in the dot-com boom.

If this is what we call "bad" the we're never going to see "good".

54 posted on 01/22/2009 5:49:21 AM PST by expat_panama
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To: DaGman

There has to be some sort of meaningful but not onerous regulation.


55 posted on 01/22/2009 6:35:09 AM PST by bronxboy
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To: expat_panama

what is rising is unemployment...about 600,000 revised December number.


56 posted on 01/22/2009 6:35:56 AM PST by bronxboy
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To: bronxboy

If the SEC had not been asleep at the wheel, we wouldn’t be in this mess.


57 posted on 01/22/2009 6:36:03 AM PST by dfwgator (1996 2006 2008 - Good Things Come in Threes)
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To: nicola_tesla

Was it worse than the 30’s?


58 posted on 01/22/2009 6:37:48 AM PST by bronxboy
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To: umgud

I guess you forgot about the balloon mortgages...Many lost their homes with these mortgage products...couldn’t refinance when the balloon payment came due.


59 posted on 01/22/2009 6:39:53 AM PST by bronxboy
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To: dalereed

Do you remember the no income verification loans? These were widely available in the 80’s.


60 posted on 01/22/2009 6:41:33 AM PST by bronxboy
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