Depression, not Recession

[Storm]

I think we are starting to see mainstream acknowledgement that we are actually in a depression, not just a recession, or a second recession...

I judge this entirely on the popular culture - exhibit A is a popular musician who won a grammy and an oscar talking about it - what a great song!  Check it out: http://www.rollingstone.com/videos/rs-l ... 6?link=pv2

[moda0306]

I don't think we'll see 25% unemployment, but I don't think we'll see 5% for a LONG time, and we could very well slip back into double digit unemployment, no question.

[murphy_p_t]

I don't think we'll see 25% unemployment, but I don't think we'll see 5% for a LONG time, and we could very well slip back into double digit unemployment, no question.

25% unemployment...gov't fairtales or shadowstats?

[MediumTex]

The Great Depression was actually two very deep recessions.

The original "double dip" you might say.

We also had the benefit of starting this one from a much higher level of national wealth; I think that's part of the reason it looks and feels different.

Another reason this time looks different is there aren't a bunch of photographers on the government payroll travelling the country looking for the most pathetic looking people they can find to capture on dramatic black and white film for political propaganda purposes. 

[Tortoise]

I've asked a few people over the years what life was like for their parents during the Great Depression.  All of them said something along the lines of, "Not all that different from any other time."  The reason is because none of their parents lost their jobs.

I agree with MT that our perception of what the Great Depression must have been like is heavily influenced by propaganda.  Heck, most people's perception of the present is dominated by propaganda; why should history be any different?

Funny how our models of how the world works grossly underestimate risk in most areas, yet manage to overestimate risk in others.  We are blissfully unaware of the real black swans lurking around the next bend, yet our imaginations run wild thinking that the world could end tomorrow if we let one "too big to fail" institution go bankrupt.  How bizarre.

[Coffee]

For the record: I think you guys are Pollyanna about your perspective on the Great Depression.

But I still love ya.

[Lone Wolf]

Another reason this time looks different is there aren't a bunch of photographers on the government payroll travelling the country looking for the most pathetic looking people they can find to capture on dramatic black and white film for political propaganda purposes. 

This reminded me of some color photographs from the Great Depression that I stumbled on a while back.  I'd become completely accustomed to seeing the Depression in black and white and hadn't realized what an unconscious "historical barrier" that put between me and the event.

Seeing oranges being sold at 1 cent each in color made me feel much closer to the events.

[moda0306]

So what kind of administration would propagandize to make things look worse than they actually are?  Usually presidents try to make things look rosier...

I guess I didn't realize that there was propaganda going on to make things seem so bad during the depression.

[MediumTex]

So what kind of administration would propagandize to make things look worse than they actually are?  Usually presidents try to make things look rosier...

I guess I didn't realize that there was propaganda going on to make things seem so bad during the depression.

Depression-era photographers such as Dorothea Lange captured some haunting images of people who truly looked like death warmed over, both in spirit and in body.  I have, however, seen snapshots from Dorothea Lange photo shoots where everyone is smiling and goofing around and it makes the final shots look a bit more contrived.

I'm not saying that the Depression wasn't REALLY bad for a lot of people, but I don't think it was so bad that people couldn't even afford a washrag to wipe the dirt off their faces before getting their picture taken.

As for why a President would want such stark images for propaganda purposes, the socialist agenda Roosevelt was trying to get the country to accept would have only been palatable if people had perceived things as being desperately bad (including members of Congress), and perhaps a bit worse than they actually were.  The Depression-era photographers provided this propaganda to help Roosevelt move forward with his vision of a post-capitalist America. 

Ironically, Roosevelt seems to have come full circle on the form of propaganda he preferred, because if you look at the WWII propaganda images, it is a depiction of an optimistic and determined America fighting the bad guys all over the world; everyone's face is clean in these images, as is their purpose.

[MediumTex]

This reminded me of some color photographs from the Great Depression that I stumbled on a while back.  I'd become completely accustomed to seeing the Depression in black and white and hadn't realized what an unconscious "historical barrier" that put between me and the event.

Seeing oranges being sold at 1 cent each in color made me feel much closer to the events.

That's a really beautiful set of photographs.  I hope everyone checks them out.

Thanks for posting the link.

[Tortoise]

If you want to read a short, fascinating book about how FDR's New Deal was essentially a revolution that overthrew the previous American form of government, download The People's Pottage by Garet Garrett for free:

http://mises.org/books/pottage.pdf

[Reub]

Now this stuff would never be allowed on the BH site!

[AdamA]

For the record: I think you guys are Pollyanna about your perspective on the Great Depression.

When your neighbor loses his job, it's a recession.  When you lose your job, it's a depression. 

I think with 25% unemployment, there was real risk during this time of political upheaval, even though 3/4 of the population may have been doing okay (at least not starving to death). 

[Storm]

Check out this graph from Shadowstats - I think Federal tax witholdings may just be the best aggregate of income data available.  I have to believe the Fed and Treasury have access to this data, and this may just be jumpstarting QE3.  I mean, if incomes determine how much money people can spend, it looks like we are definitely headed towards double dip territory:

[MediumTex]

Storm,

There was a significant payroll tax cut on January 1.  Due to the way payroll tax collections are counted, I believe this would account for a portion of the decline from the first of the year (i.e., collections declined because the rate on the tax that EVERYONE pays went down signficantly).

Just a thought.

I completely agree, though, that there is nothing structurally sound about this economy right now.  It reminds me of an old athlete who doesn't realize that his body can no longer do what his mind wants it to do.

[smurff]

Wal Mart even testified a few days ago that their customers are now running out of money.  I guess we should start seeing in the next couple of quarters what effect this will have on the overall economy.