Depression Coming? Depends...whose data do you believe?

Thursday, July 24, 2008 at 06:36 PM

What's with the WaPo this time, I have to wonder?

Hmm, could it be another snow job?

Robert Samuelson of the Washington Post penned a nice article that tends to stink a lot like the old "nothing to see here" stuff that cops tell the onlookers at a triple-murder-suicide just off the onramp.

The idea of said article, of course, is to flatly deny America is sliding at wF(10) into a depression, like the last one, circa 1925-1941. An old boss of mine always said he could sure pick a clever statistician, as:

"Figures lie and liars do figure."

Like other PR nonsense from other media outlets, the data is hit-n-miss, but, what the hell:

As yet, the present economic slowdown does not even approach the harshest post-World War II slump. The back-to-back recessions of 1980 and 1981-82 (as dated by the National Bureau of Economic Research) constituted, for most people, one prolonged downturn. Unemployment peaked at 10.8 percent in late 1982. In 1981 and 1982, housing starts were down almost 50 percent from their 1978 peak. From 1979 to 1982, the economy stagnated; output lurched down, then up and then down. There had been nothing like that since the 1930s.
In other words, denote that this "trend" doesn't match "old trend" and so on. Our concept of "blue" doesn't equal the 1930's version, yes.

Then, there's the "well, pinning down what caused the Great Depression" disclaimer, meaning....what? "Oh, nobody can really say what one was, let alone...."

So, why do so many, myself included, look at the spate of events over these last X years and think, well, shoot far, looks like a 2nd Great Depression coming, yes. How can I possibly think this? How can others?

Well, if go to other data......uh-oh.......!!

-Part of the mechanism of the Great Depression was that most of the nation's wealth was in the hands of the very, very few. How exactly does this differ from today, pray tell?

-Lax laws, and in some cases, no regulations whatsover allowed banks, stock brokers and others to create more and more "goodies" for themselves. How does this differ?

-A common scenario from then was the sight of "bank runs", when people go to the banks to withdraw their monies. Exactly how does this not look like the cute footage of patrons outside of Indymac?

-And recently, the so-called "Hindenbrug Omen" was calculated, indicating that the stock market just may well go blooey. And how it this different from the crash of 1927?

-And yeppers, G W Cheesewhiz, like Hoover, inherited bad laws, bad ideas and bad economic policies from his predecessors, like Hoover inherited those wonderful policies of Coolidge, Wilson and others. How is this that different?

The American Revolution and the French Revolution were, yes, different, but both were revolts all the same. A 2nd Great Depression may not come down the pipe like the last one, but, any citizen, who has watched this nation devolve into a nation of robber barons, oil giants, lobbyists and a sense of "Let Them Eat Cake" can sure smells like one in the wind anyways.


Not to mention that the "data" has been cooked a lot more since the 1979-82 period. With the specific purpose of making it hard for (a) anybody but the insiders to know what the "real" figures are on unemployment, inflation, GDP, etc; and (b) anyone to compare post-cooked data with pre-cooked data.

Mission accomplished.