More on the Great Recession
Heads-up on two pieces coming tomorrow during the 8 O’clock Hour.
Brian Mann and I continue our conversation about how Canada’s border communities have fared — better — than their counterparts here south of the line. Brian’s been on the road this week, from Kingston to Toronto, and eventually down to Detroit, reporting for us and for WBEZ in Chicago.
Tomorrow, it’s the strength of public sector employment in Canada.
Governments large and small in New York have cut thousands of jobs, including teachers, conservation officers, corrections workers and health providers. Brian’s found that stable government employment north of the border has helped prevent the kind of high jobless numbers we’ve seen in the North Country and New York as a whole.
And in Albany, Karen DeWitt has the labor-backed Fiscal Policy Institute’s report on how New York has fared during the economic downturn. Here’s the opening line of the executive summary:
As the unemployment crisis continues more than two years following the official end of the Great Recession of 2008-2009, New York families have smaller incomes and face fewer opportunities.
The report is filled with grim numbers. Further down:
An indication of greater hardship among New Yorkers is that 1.2 million more people are receiving food stamps than before the recession. Growth in food stamp recipiency has been similar across the state, 63 percent in New York City and 68 percent outside the city.
Since the recession began, the number of New Yorkers without health insurance has risen by 550,000 to 2.9 million. The percent without health insurance coverage—public or private—has increased much faster in New York than in the nation as a whole. The steep falloff of 500,000 in those covered by private employer-provided health insurance largely accounts for this.
Karen’s sorting through the report and how it relates to public policy in the state.
Tags: canrecess, economy, employment, fiscal policy institute, govenment, labor, politics, recession, US/Canada border issues
There’s an oxymoron: “great recession”
We had 4 quarters of negative growth in GDP. Two of them were -0.7%.
But, in order not to make the current resident of the White House look so inept, we must call it the grrrrrreeeeaattt recession.
Where’s the grreeeaaatttt recovery?
The public workers, the schools, and the counties, towns and villages have all taken a hit, but the rich have gotten richer through it all. Health insurance companies have raised their rates, making health services ever more expensive, and have become rich doing so.
Unfortunately, the health care system that we are now beginning to roll out will not solve this problem, and will probably create an even richer community at the top of the insurance industry.
The Canadians have a fine system…Why are we so stupid?
Yes. What can we learn from the Canadians?
May 3 (Bloomberg) — Canadian Prime Minister Stephen Harper won a majority of seats in Parliament for the first time, giving his Conservative Party a mandate to bolster the economic recovery with additional tax cuts and erase the country’s deficit with curbs on government spending.
Tax cuts, balanced budget, increase in tax revenue (because of the resulting economic growth).
Let’s get out in front of this one:
Obama exxxxtteeennnddding Bush-era tax cuts is NOT a tax cut.
They were cut in the Bush-era, hence the name “Bush-era tax cuts”.
It will be good not to raise taxes. But extending 8-year-ago tax cuts is not a tax cut.
JDM – lets not extend the “Bush-era tax cuts”. Who cares what we call them or what verb we use to describe the action of not extending them. Legally and for deficit reasons the technical verb is “extend”. But if you want to call it something else – go for it.
Just for the record and just in case you really care about the federal budget deficit, there is something you can do about it.
JFK, when president, instituted a little known program where anyone and everyone can donate money to help lower the debt.
If interested, go to: http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm
everyone knows to disregard everything jdm says, right? everyone knows that he’s completely unreliable and often full of it, right? just look at his first comment in this thread. what is he talking about? is there even the slightest connection to reality? even before obama took office, this was by far the worst recession we’ve had since the great depression. the term “great recession” is completely apt.
Yeah, information on the GDP is pretty easy to find these days,
http://nationalpriorities.org/resources/federal-budget-101/peoples-guide/ , but some people have trouble with decimal places.
The correct link for GDP is here http://www.bea.gov/newsreleases/national/gdp/gdp_glance.htm although the one that was put in my mistake is a link to interesting material on understanding the budget process.
What about the recession in 1937 with peak unemployment at 19%.
To call this the worst recession since the great depression is simply and completely false.
It is bad, and no one likes it, but that description is false.
PNElba: I see five quarters of negative growth on your charts, one is back in 2007, which is outside of the scope of what Brian was referring to as the “Great” recession.
But even with that, Joe Biden declared summer 2010, the “Summer of Recovery”, and Obama said that passing his stimulus package would keep the unemployment rate under 8%. (without it, he predicted 10%, I believe).
Since 2010 was the “Summer of Recovery”, then we are clearly beyond the “Great” recession, by admission of the Obama administration.
We are in the Obama duldrums. We are dealing with documented ineptness.
Obama doesn’t have a clue of what to do next, except borrow $400B and buy one year of government-funded salaries. Then what??
i think most people (myself included) think of the “great depression” as encompassing the period from the crash of the late 20’s through to the war. which means that the recession of 1937 gets tossed into the same basket.
if we want to be really clear about things, we should all understand that the term “recession” often get used in two separate ways. one is the precise economic sense, which i guess isn’t completely standard, but is generally taken to be a period of two or more consecutive quarters of gdp decline. by that measure, we came out of recession in 2009.
the other sense is just a period of prolonged economic weakness. by that measure i think we’d all agree that we’re still in recession, and i think the term “great recession” is almost always used in this latter sense. “great depression” is certainly predominantly used in this way; after all, the economy was actually growing throughout most of roosevelt’s administration, but does anyone really consider the depression to have been over soon after he came into office?
In 1981, there was a recession that lasted 6 out of 7 consecutive quarters. Unemployment reached a peak of 10.8% in Nov/Dec 1982, and inflation was a whopping 13.5% in 1980.
We have not seen any of these kind of numbers in the “Great” recession of 2008-2009.
Nonetheless, the remaining quarters of Reagan’s term saw a minimum of 4% growth, and some quarters in the 5%-8% range. I don’t remember him ever complaining about the Carter years. He just led.
HT, if the facts don’t matter I guess we can call it whatever we like. If “great recession” sells papers that so be it.
But the biggest problem we have is that consumer confidence stinks. When things are mis-characterized it only feeds that sentiment and prolongs the agony.
US consumers and businesses are spending very very cautiously. That makes for achingly slow growth but I disagree that we are in a recession.
well, ok, paul, if you don’t think that 1937 was part of the great depression, then let’s just say that the current economic mess is the worst since the war. i am trying to follow jdm’s lead and work hard at my actual job right now, so sadly there’s not enough time to reply to everything i’d like (actually i don’t know how the recession of ’37 compares to what we’ve just been through, and no time to look anything up. but the high unemployment number is surely influenced by the fact that unemployment was very high to begin with!)
here’s a chart comparing job losses for the postwar recessions. and sure enough, this one has been the worst.
The only thing “Great” about this recession is the Great lack of aptitude our president has to deal with it.
We are tripping and stumbling over words and I believe the problem started when the news media began talking about “The Great Recession.”
The media likes to hype everything as do many in politics.
The bottom line is this. If you are out of work, it’s a depression. If your neighbor is out of work, it’s a recession. The more neighbors out of work, the greater the recession.
JDM, Those are not MY charts. I had nothing to do with them. They came from the Bureau of Economic Analysis. Can you see that?
Who cares what the recession is called. I imagine that part of the reason it is called great is because it’s a global recession (caused by Fannie Mae and Freddie Mac).
And, instead of complaining about the “Obama doldrums”, why don’t you explain just what needs to be done to get the country out of the “doldrums”. Many of us are waiting to hear your solution.
HT, it’s an interesting graph. I wonder how many hundreds of thousands of government workers were fired in those previous recessions?
I too am taking JDM’s advice. I’ve started working at least 3 times harder. I expect my income will increase at least 3-fold within the next year or so.
the GOP solution is to do nothing.
PNElba: “why don’t you explain just what needs to be done to get the country out of the “doldrums”. Many of us are waiting to hear your solution.”
It’s not that hard. Cut the capital gains tax and drill our own land for oil, just as something that we can do, today.
Repeal the 16th amendment and go to a flat consumption tax.
Dismiss the EPA, Dept. of Energy, Dept. of Education, and a few other departments.
Strengthen the military, not just money, but in every way.
My gosh, this is easy. I could go on, but there are many solutions to this problem.
JDM an Paul – they say that historically, Fiscal banking disasters like this one, where lots of wealth disappears overnight, take a long time to recover. “They” also say we are not going to get out of this one until the housing sector recovers – maybe in two years. We haven’t had one of these for a long time – maybe since the “great depression” and maybe thats why its called the “great recession”.
I don’t think it is necessarily only “stumbling over words”. These things can make a strong impression on public perception of the issues. Perception is what drives consumer confidence and consumer confidence and consumer spending are what drive the economy.
I am just saying that we are in a period of extremely slow economic growth. It is unacceptably slow but slow none-the-less.
Some individuals and many businesses have money to spend we need to give them the confidence to spend that money and we will see things improve. If we can do that then we will see a lot more revenue flow into the federal coffer than we will see from the current (frankly weird) plan to tax it from a small number of wealthy individuals. But if voters believe that this is our path to prosperity than they should support the current administration with vigor. It just seems nonsensical to me.
ok i can’t help myself. jdm:
from reagan’s 1983 state of the union address:
peter is exactly right, a major part of why the recovery from this recession has been slow is because we had a major financial crisis to go along with it. no one has ever recovered from one of these things quickly. the administration knew this and tried to learn from the past, but it still didn’t do enough.
nevertheless, i think it’s important to always keep in mind that what obama has done, insufficient though it may be, has always been superior to the republican/conversative/jdm alternative. want things to get worse? vote republican.
hermit: from reagan’s 1983 state of the union address:
“Curing those problems has taken more time and a higher toll than any of us wanted. ”
That equates to Obama’s Jan 2011 year in office. Has Obama put claimed to “cured” the ills of his predecessor?
Will he ever?
Will you ever?
are you really serious, jdm? are you trying to say that the respective situations inherited by reagan and obama are equivalent? in case you’re wondering… no, they’re not. the situation obama inherited was/is much worse. there was no financial crisis handed off to reagan.
hermit thrush:
Every president has his crisis to deal with. Obama can’t even show up at a critical meeting to discuss our devastating debt.
He was a community organizer in Chicago. That is about the extent of his ability.
Making excuses for him only strengthens the argument that the man has put on a pair of shoes an order of magnitude too big.
What is plan to deal with the unemployment? His bill that no one will pass. What does he do? Act like a cry baby.
What is his next move?
One of the big mistakes we made in this country was the idea/dream of single family home ownership. That dream created the “housing bubble” and when it happened, many people found themselves chained to house worth less than they owed.
If the same family rented, it would be easier for them to pick up the pieces and move to find a job.
By the way, in addition to not caring much for the words recession and depression, I really hate the term “consumer confidence.” It’s what I would call “group think” or behaving like a bunch of sheep – which is what we seem to have become.
Pete, you are spot on:
This from the NYTs in 1999:
“The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.”
Whole article here:
http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html
Bush took a crack at trying to do something about it in 2003:
http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html
You can blame whichever party you like. But the lesson here is that this is what happens when you allow the government to meddle in the markets.
The whole purpose of these programs was to allow these institutions to lend money at rates that made the loans much more risky.
Is it really a big surprise that smart guys on Wall Street figured out a way to make money off this government scheme?
Like I said there is plenty of blame to go around but the lesson remains the same.
Paul- most of those “smart guys on Wall Street” ended up going broke and taking down the world economy with them.
Peter, no doubt about it. If the government creates foolish opportunities for people we should not be surprised when folks take advantage of those opportunities. This is not some big sinister mystery like many in the press would like you to think. This all went on in the plain light of day with the government as a major co-conspirator.
Peter, I am also glad to see that someone here is acknowledging that this crisis had a severe impact on the people working on Wall Street like you point out. The loss of those jobs and revenue has been a serious blow (and continues to be a problem) to the budget of NYS.
i agree with pete and paul that it’s misguided for the federal government to encourage homeownership (for anyone — i think we should get rid of the mortgage interest deduction, for example). why promote buying over renting? seems like exactly the sort of thing the government should stay out of.
however, i’m sensing a certain bit of subtext in what paul’s been writing today, and i think it’s important to stand up to it right away.
the financial crisis was not caused by fannie and freddie. the crisis was not caused by the government encouraging risky loans to poor people.
(to be clear, paul didn’t say that the crisis was caused by any of this! but this stuff is important, and i just want to make sure no one reading his comments gets the wrong impression.)
for sure, fannie and freddie contributed to the crisis. but that’s obviously a very weak standard to meet. the fact is that they were marginal players whose role was dwarfed by an out-of-control private sector acting independently. there’s tons of stuff out there to read; andrew sullivan recently had some good stuff on it, for example here and here.
I think there is a national interest in having a large segment of the population be homeowners. The problem in the mortgage interest deduction is that there isn’t a limit on it.