Thursday, April 22, 2010

Tracking the ongoing media mania over alleged parallels to The Great Depression

I am endeavoring to track the current media mania of attempting to draw parallels between the current economic situation and The Great Depression. I am doing this by using Google News to count the total number of "news" references to the phrase "The Great Depression" in the previous 24 hours. I have been doing this for just over a year now.

  • 1/10/2009: 411 hits
  • 1/30/2009: 319 hits
  • 2/6/2009: 308 hits
  • 2/25/2009: 389 hits
  • 3/10/2009: 306 hits
  • 3/24/2009: 285 hits
  • 4/9/2009: 93 hits (one year ago)
  • 4/28/2009: 184 hits
  • 4/30/2009: 195 hits
  • 5/7/2009: 184 hits
  • 5/21/2009: 167 hits
  • 6/5/2009: 99 hits
  • 7/8/2009: 170 hits
  • 7/22/2009: 177 hits
  • 7/29/2009: 189 hits
  • 8/14/2009: 169 hits
  • 8/20/2009: 168 hits
  • 8/26/2009: 168 hits
  • 9/2/2009: 147 hits
  • 10/13/2009: 158 hits
  • 10/22/2009: 208 hits
  • 10/29/2009: 246 hits
  • 11/3/2009: 176 hits
  • 11/17/2009: 133 hits
  • 11/24/2009: 160 hits
  • 12/4/2009: 205 hits
  • 12/10/2009: 158 hits
  • 12/23/2009: 156 hits
  • 12/30/2009: 164 hits
  • 1/12/2010: 151 hits
  • 1/21/2010: 211 hits
  • 2/11/2010: 175 hits
  • 2/24/2010: 193 hits
  • 3/5/2010: 169 hits
  • 3/19/2010: 147 hits
  • 4/2/2010: 137 hits
  • 4/7/2010: 146 hits
  • 4/22/2010: 185 hits

Two weeks ago was a little special in that we got the first significant gain in jobs since the recession began. Further, the head of the National Bureau of Economic Research (NBER) committee that dates the start and end of recessions stated that "I would say 'pretty clear' is a good description" for whether the recession has ended. Another member of that committee stated that "Speaking personally, it now seems very clear that the recession has ended." The committee may need a few more months to formally mark the end of the recession with definiteive certainty, but the writing is clearly on the wall. But, please note that the ending of a recession says nothing about the path or rate of the economic recovery.

Although the "mania" appears to have subsided somewhat, or at least has stabilized, the phrase "since the Great Depression" clearly resonates.

One possibility for the stabilization is that the term resonates enough that the media is more than happy to cling to a term that almost assures that readers will pay attention. How long will it continue to "resonate"? Maybe until the overall economy and employment are reliably rising month after month for at least six months.

A fair amount of the usage at this stage is not comparison directly to The Great Depression, but simply using The Great Depression as a sort of bookend as in "since the Great Depression." Still, the media is clearly getting a lot of mileage out of the term even if they are not adding much in the way of useful information or enlightenment.

My current belief is that the media mania over "The Great Depression" will continue until the current recovery from the recession has advanced to the point where a monthly gain of employment is no longer a calming surprise and once again becomes taken for granted. We may need to see a decline of a million or more in unemployment and an even greater gain in employment before that happens. I do not expect that to occur in the near future. It could be a year or more, especially since initial unemployment claims remain firmly elevated above typical recessionary levels.

Personally, I believe that even though we are into a modest recovery overall for the economy, on the labor front we are in a mini-depression. Even though employment will begin to recover and resume growth soon, the bulk of the eight million people who lost jobs over the past two years will remain jobless for several years to come. It may take five to ten years before the bulk of those people are finally back in mainstream employment.

Incidentally, unemployment actually rose by about 134,000 in March despite the net gain in payroll jobs. That is a measure of how deep and pervasive the mini-depression really is.

-- Jack Krupansky


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