Whilst in the midst of the worst snowstorm in recent memory and confined to barracks as a result of, a couple of things have occurred to me. Today, while waiting for my train at Penn Station to arrive, I happened to have caught a snippet of a news story on CNN that was being played at one of the food/beverage shoppes that dot the station. In said news story, a delegation from the National Urban League, a predominantly black and Hispanic organization spoke outside the White House. Their concerns were that this "Great Recession" that we are currently undergoing is disproportionately affecting minority communities, and that the President needs a "stronger focus on employment counseling, job creation and direct aid to public employers." I'm always a bit suspicious, and rightly so, such entreaties; essentially, what these folks are speaking of is a greater expansion of the already over-bloated welfare state, but I digress. What I did find of interest was the continued use of this phrase:
The Jobless rate for black men last month, 17.6% and rising, is approaching the worst of the Great Depression.
Could be, but I'm not sure those numbers jive with the official government numbers. The unofficial government unemployment numbers have an overall unemployment number of about what the National Urban League, in their press release, said it was for just black men. I'm not writing this blog entry to either endorse or dispute these numbers, but rather to point out that this meme, that we are in the "worst economic crisis since the Great Depression", is just a tad suspect to me. First off, statistically this is not true, and I'm not even sure that this is even remotely as bad as anything that occurred in the 1970's, or for that matter, the very deep recession of '81-'82. So....let's go to the numbers:
Maximum Rate of Inflation:
10.8% (December, 1982)
9.7% , 10.2% maximum in November of 2009
Maximum Interest Rate (as measured by Federal Funds Rate):
20% (June, 1981)
Consider also, in the recession of the early '80's, mortgage rates approached 21%. Imagine that: paying 21% for a mortgage. (See sixth chart from the top here.) Sheesh.
Now, I'm not trying to mitigate what has just occurred with our financial system. One of my clients, who happens to be a personal injury attorney, referred to it as a "serious injury to the spinal column". (He said this before the Lehman/AIG/Citi meltdowns, but after the Bear Stearns implosion.) Of this, I cannot dispute. But I do find the constant and endless referral to this financial situation to that of the Great Depression a bit hard to swallow. I'm not even sure that this is as bad as '81-'82, and if one were to go by the numbers, it isn't as of now. That said, I think that Reagan had the better remedy than Obama currently does, but even with the obscene deficit spending going on courtesy of the Pelosi/Reid/Obama triumvirate (one, if not two of the three will be gone by next January), I'm quite hopeful that recovery is but a year or two away. Additionally, with Obama's mad government expansion schemes scuppered for now (and probably for all time), and a GOP congress (if not majority, than certainly strong minority) in the works, fiscal sanity will find its way back to our government policies. (Or, what counts for fiscal sanity in Washington.)
Conclusion? This is not the worst economic crisis since the Great Depression. It's not even worse than the Recession of '81-'82. Bad...but not that bad.