The horizon is not so far as we can see, but as far as we can imagine

No We Aren’t In A Recession, We’re In a Depression

Seriously, does this look like a recession to you? (image from CR.)


And 2001 was a depression too, it was just a very shallow depression.


Brutal Animation of Unemployment Rates


Fed to print more money


  1. pdgrey

    Sorry, but nobody will report that. The MSM is on vacation in the Hamptons.

  2. anonymous

    A shallow depression? I thought that was called a recession.
    Frankly I don’t feel any better about the future than I did two years ago. This feels like the start of the credit crunch in 2007 when we were just waiting for the other foot to fall. One more crisis and u/e will start to look like the 20% people seem to think of when they talk about a depression.

  3. Ian Welsh

    No. A recession has a distinctive shape – you lose jobs fast, you get them back fast.

  4. marku

    Yup. The free trade chickens have finally come home to roost. Any jobs created are created overseas. The 2001 depression was barely terminated by an orgy of consumer debt. Not gonna work this time.

    Here is a great interview (at least until they let corporate tool and Clinton adviser Andrea Tyson have the mike) with Sir James Goldsmith from the 90s. They are debating the effects of trade and the proposed GATT. Tyson was blowing all the “benefits of trade” smoke. Goldsmith pointing out that it is all about wage arbitrage and creating un and under-employment in the developed world.

    25 years later it is obvious who was right. But Goldsmith, he’s dead. And Tyson, for her demonstrated incompetence, is an Obama economic adviser.

    Reminds me of another econ genius. Larry Summers, testifying to Congress, stated that he didn’t believe that *any* US jobs would be lost as a result of giving permanent MFN status to China.

    Too steeped in the Dogma of his Guild? A Crook? An Idiot Savant? But yet another Obama adviser.

  5. jcapan

    Well, Krugman did. But who listens to NP winners, scientists, people proven right for years. That’s so passé. Aside from token anachronisms, MSM = prolefeed.

    I’d say we should simply combine the terms. Repression perfectly captures the establishment’s (and much of the population’s) penchant for reality denial:

    i.e. a mental process by which distressing thoughts, memories, or impulses that may give rise to anxiety are excluded from consciousness and left to operate in the unconscious: an item so excluded (Merriam-Webster)

    You know, torture, collateral damage, unsustainable empires, ecosystems …

  6. auntifashism

    Is there a chart that shows the current depression compared to the Great Depression?

  7. Z


    krugman is a proponent of free trade.

    Krugman has … argued that “sweatshops” are preferable to unemployment, challenged minimum wage and living wage laws, likened the opposition against free trade and globalization to the opposition against evolution via natural selection … and written against some aspects of European labor market regulation. He once famously quipped that, “If there were an Economist’s Creed, it would surely contain the affirmations ‘I understand the Principle of Comparative Advantage’ and ‘I advocate Free Trade’.”



  8. jcapan


    Listen, unlike many, I wasn’t ritually incanting his name. He’s not an oracle but he has been spot-on about a great deal, which is rather unusual in MSM quarters. I’m not going to latch onto one flawed component of his work and conclude that his entire oeuvre is without merit. Worse than his trade theories IMO is his partisanship, that no matter how bad things get, he stands by the dems in the end.

  9. Z


    I never said … nor meant … “that one flawed component of his work” means that all the other work that he has done is wrong. Just as the fact that he has been right about a lot does not mean that we should accept everything he says sans critical thought. And that holds for everyone becoz no one is right about everything and no one is wrong about everything.

    krugman was very right about a lot of things during the bush years. When you wrote: “Well, Krugman did.” I thought you were referring to marku’s comment that summers and tyson were wrong to promote free trade and that was what I was responding to. Perhaps, I was wrong about what you meant by that.

    I also think that krugman’s partisanship … and I would add his loyalty to many of his academic pals in his field … has led to a lot more than one flawed component of his work. He raved about the great job his princeton pal bernanke did to stabilize the economy when all the fucker did was basically print up money and either hand it over to wall street or gave it to them in exchange for their over-priced toxic securities until they were happy. bernanke hired krugman for his position at princeton.

    krugman also defended gruber … the mit health care economist … whose work the obama administration used to promote their horrible health care bill, a bill that krugman aggressively backed, even though gruber didn’t tell anyone that he had a big contract from the hhs to do just that. And even though gruber’s modeling included some very questionable assumptions such as business would increase worker’s wages to cover business’s decreased health care costs from the bill. And gruber’s modeling did not include options such as the public option, medicare reimbursement rates, and certainly not medicare for all. It was work that IMO was tailored to come to a conclusion that the administration favored, which was why he got that contract IMO, which was worth around $800K.

    krugman also went way out of his way to defend his academic pals and why they were almost all wrong using all sorts of innocuous excuses for them never recognizing bubble after bubble that many were paid by wall street, the government or the federal reserve to miss. ( He also ignored the role that the fed, federal government and wall street have played in corrupting the academics by funding those that promote what those entities want the public to believe. There is no way that he is unaware of these influences and their role in so many economists blissfully getting so much so wrong. Instead though, the provided romantic reasons tied to numbers and beauty and all kinds of other really nice things that caused these “honest” men in their “honest” profession to get it so wrong so often … as wall street got richer and richer and richer. God, he makes you feel so sorry for them, you almost just want to hold one in your arms, protect them and tell them that everything is gonna be all right … just like the vast majority of them have been telling us as things have gone to shit.

    krugman also continually blames ronald reagan for most of our economic problems … and I’m getting so tired of this bullshit from the liberals. This is similar to the idiot republicans blaming Jimmy Carter for the housing crash due to some bill he signed for low income housing. (Hell, why not just blame it on James Polk? He’s the one that acquired california, nevada and arizona and the housing crash never would have gotten this bad if those states weren’t around.) But the liberals are often just as illogical as the republicans and just as blind to it. Anyway, reagan has been gone for a long time, any of the presidents that followed him could have changed course but they did not. reagan did not place them under some hypnotic trance, they made their own decisions and you can’t lay their decisions … and sell-outs … on a man that hasn’t been president in over 20 years.

    krugman’s biases make him far from intellectually honest on many issues IMO.


  10. jcapan


    I should have been clearer, that I was responding to comment #1: “Sorry, but nobody will report that. The MSM is on vacation in the Hamptons”

    In any event, we’re largely agreed. Your point about Reagan is particularly spot-on. I always make a firm distinction between the man and the mantra. The Church of Reagan has been the official state religion for 30 years now. It’s embedded in the ether Americans suck out of their polluted skies. It’s virtualy unassailable, never moreso than now, largely adopted by GOP-lite as it is. Blaming the mental dwarf whose name is attached to the movement is ludicrous.

    More contempible than blaming past presidents for the current ruling party’s Hooverism (i.e failed policy), is the preemptive & cowardly shrieking about Rand Paul, Sarah Palin etc. They can’t seem to take ownership of their own power for an instant. I guess doing so would make their doublethink all the more transparent. We’re against republican economic policies except when they’re called democratic policies and enacted by “liberal” presidents. In any event, all these partisans will find their comfort restored in short order–nothing will please them more than to blame Speaker Boner and possibly Majority Leader McC.

  11. Oaktown Girl

    Based on how long it took the corporate media to finally start using the “R” word to describe our “economic downturn”, I used to wonder how long it’d take for them to finally start using the the “D” word. I don’t wonder that anymore. Now I think they’ll probably never use it. They’ll just keep fudging the numbers to make them look better than they are (like they do with the unemployment figures), or else they’ll just conveniently redefine “Depression”.

    Short of that, I think the only way they’ll ever start using the “D” word is if the rethuglicans start using it during the Presidential campaign as a way to bash Democrats. Then you’ll hear it all the time, everywhere: “Obama’s radical socialism program drove us into a Depression!”. And in the interim, the Democrats will have conveniently continued to do everything possible to set themselves (and the country) up for such a situation.

  12. Bernard

    what a wonderful set up! the Democrats help the Republicans set the Democrats up. Meanwhile the Thieves are taking it all.
    something about Nero fiddling. lol

    first class drama for a third rate country.

  13. anon2525

    So, the question now is: Are we in a great depression? One answer that economists might give is that a great depression requires both a significant decline in GDP and a significant decline in employment. We definitely have had the latter. As Dean Baker’s post on the latest job numbers pointed out:

    The employment to population ratio fell by 0.1 percentage points to 58.4 percent, only slightly above the 58.2 percent low in December.

    If the unemployment rate were put in these terms, then it would still be above 10% as it was back in December.

    It seems to me that a qualitative measure of whether the economy is in a depression is the determination that it (that is, GDP and employment) cannot recover on its own, that is, through private measures alone. It has not recovered yet, even with the assistance of the weak “recovery” act (ARRA). How much longer will the country go on before it determines that has not indicates that the economy can not?

    WPA now.

  14. David H

    We can say the govt should step in & provide for full employment until things get better, but we all know they won’t. Until the people getting screwed stand up for themselves & fight back not much will change. If/When they do, I’m willing to join in, but a vanguard party I am not, to say the least. And so I wait.

    Re Reagan — much like with Thatcher, he could only dream of the kind of “successes” his successors have “achieved” in office.

  15. We need to stop saying unemployment and start saying disemployment.

    After all, we’re talking about the results of actions deliberately taken by the political elite at the behest of their owners.

  16. Celsius 233

    It’s rather amusing that people would use the media for an assessment of the condition they’re in; as opposed to the reality of the condition they’re ACTUALLY in. Are we really that stupid?

  17. cathyx

    When will they start using the word depression instead of recession? Never. Not when their livelyhood (stealing from the middle class) depends on keeping this a recession instead of depression. Take note that the government is insisting that we are starting to turn the corner this summer and things are starting to look up.

  18. zot23

    Celsius 233,

    Unfortunately, I think this breaks down to not knowing the conditions anywhere else (other than where you are.) For example, in Denver it might be hot – I know it’s hot, I can feel it. But unless the news is willing to report the weather as hot everywhere else (and Russia in flames due to extreme heat) how can I know the conditions somewhere else? How can I assess the claims of climate change with just my own data point. Plus, if the news wanted to lie to me about the heat elsewhere – how could I know at a glance that they were lying? My only point of reference is where I live in Denver.

    Same thing with the financials. It’s tough out there, the people can feel it. But is it as tough in NYC as it is in Little Rock, AK? If the news isn’t reported to you with honesty, how can you know? In this case too a person can’t stick their head out a window to see how the economy is doing today (like the weather.) They have us over something of a barrel for the time being.

    Support Net Neutrality, we’re going to need it 😉

  19. Formerly T-Bear

    The Automatic Earth: differs with John Williams as reported:

    The Energy Report had an interview with John Williams of which is quoted below re defining depressions from great depressions, which might be helpful.

    JW: We’ve been talking about an economic recession, but we are headed for something far worse. I define a depression as a 10% peak-to-trough contraction in the economy. In terms of the broad economy, we’re not down 10% in GDP yet. So while we’re not formally in depression, we’re certainly seeing it in a number of indicators and I think we’ll be in a depression, with GDP down 10%, in the near future.

    A contraction greater than 25% peak-to-trough puts you in a great depression.

    Both The Energy Report and The Automatic Earth have extensive reports concerning the contrasting views that are well worth the effort of reading and comprehending the basis of their views. Stereoptican economics at its finest.

  20. anon2525

    Who is already in the great depression? Those that have become unemployed and have exhausted their unemployment benefits. Unemployment insurance and food stamps did not exist when the first Great Depression began.

    Food riot in 1931

    “Food riots” begin to break out in parts of the U.S. In Minneapolis, several hundred men and women smashed the windows of a grocery market and made off with fruit, canned goods, bacon, and ham. One of the store’s owners pulled out a gun to stop the looters, but was leapt upon and had his arm broken. The “riot” was brought under control by 100 policemen. Seven people were arrested.

    Resentment of “foreign” workers increases along with unemployment rolls. In Los Angeles, California, Mexican Americans found themselves being accused of stealing jobs from “real” Americans. During the month, 6,024 of them were deported.

    It has been reported that cuts to the Food Stamp program, starting in 2015, will be used to “pay for” the aid to states and cities bill that the Millionaires’ Club (senate) passed last week, and which the house of reps. will consider this week.

  21. anon2525

    Who is already in the great depression? Those that have become unemployed and have exhausted their unemployment benefits.

    Here is another chart (from the st. louis fed. reserve) that probably deserves as much attention as the famous one that Ian Welsh posted as an indicator of a depression:

    The Average (Mean) Duration of Unemployment

    This charts unemployment duration going back to the late 1940s.

  22. meh, jobs. there are none. good luck finding one.

    you media types should do this fun project: take our line, and find all the articles you can with the word “recovery” in them, since 2007. find all the NPR and WaPo editorials and prize winning econ writers’ fancy, scolding “stop whining, you unemployed people” columns that use the word “recovery” and tick them along our nice fat red decline. hell, i bet it would be so crowded it would be like a google map of “streets that are spelled with E.” you can have equal fun making graphs with “effective taxation rates of the super wealthy and large corporations over the last 50 years” and pin pointing SCLM fodder about “tax cuts.” overlay of the two across equal timelines is extra nifty.

  23. anon2525

    Krugman from July 28, We’re Number One!

    It includes the principle chart from this post, plus the one I mentioned earlier about unemployment duration, and one other from the St.Louis. Fed.

  24. Okay, this has been bugging me for a while, but I’m finally saying it now. Would you cut it out with the ‘we’ stuff already? You are not American. You do not live in the U.S. When you are talking about the U.S., you need to say ‘the U.S.’, not ‘we’. There is no ‘we’ about it, for you.

  25. Ian Welsh

    lol, IP, fair enough (on some things. On Afghanistan, for example, I can say “we”).

    Mind you, at this point, my entire income is from the US, so I think I could make a case for “we”.

    Although I’ve noticed some of my readers get angry when I say “you”.

  26. James

    One thing people should realize is that the number of people unemployed would still be higher even if the percentage was lower for the Depression. The percentage of people unemployed would be immensely higher because there are more people in the U.S. today than back during the Great Depression. So, there would be a heck of a lot more people unemployed today than back during the height of the Great Depression. 9% of Great Depression unemployed would be way lower than 9% of today’s unemployed.

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