Thursday, February 05, 2009

Clear to Everyone? Better Tell The Data

By now, it's clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression.


~President Barack Obama in
today's Washington Post

MP: The chart above shows annual real GDP growth during the Great Depression I (1930-1932) and the 2007-2009 period, using the WSJ consensus forecast of -.30% for 2009 growth.


10 Comments:

At 2/05/2009 9:52 AM, Blogger spencer said...

He did not say as bad "AS" the great depression.

He said "SINCE" the great depression.

You are putting words in his mouth.

 
At 2/05/2009 10:36 AM, Blogger Colin said...

Well, he's inaccurate about that too. Unemployment was almost 11% in December 1982.

Contrast Obama's doom mongering with FDR's "the only thing we have to fear is fear itself." And apparently the only salvation is a pork-laden $800+ billion bill that is a veritable Democratic wish list.

It insults my intelligence.

 
At 2/05/2009 10:58 AM, Blogger QT said...

Spencer,

While the global financial crisis may be the worst since the Great Depression, the present recession is likely not. Funnily, Lehman Brothers is actually hiring people these days and is well on the way to recover. Who would have thought?

President Obama is trying to flog the present approach without addressing any of the concerns raised. The proposed stimulus bill does little to address the instability in the financial system. At least, he has made noises about the "Buy America" clause (still hoping for the audacity of action) but there are many contentious spending items and some will do little for the economy.

Take funding coupons for DTV converter boxes. Much as I enjoy TV is it really a basic human right to watch American Idol?

Only 15% of viewers use aerials and of those most have TV made after 1997 with the old analog TV used as a second set. DTV has a shorter range than analog so aerial users may have to buy a stronger aerial or be content to watch fewer stations. Additionally, you can either watch a better, clearer DTV picture on a new TV that can be purchased at a nominal cost or convert the signal to low quality analog.

Anyone with common sense would wait until the DTV conversion to find out whether they can still receive all channels before they plunk out money on a converter box. Oh, panic, one might be without TV for a week if you lost the signal and decided to get cable.

How does a one-time conversion become the basis for long term job creation and economic stimulus?

 
At 2/05/2009 11:57 AM, Blogger Colin said...

Perspective:

http://4.bp.blogspot.com/_dZJ6SFB1ecE/SYsUvtiASJI/AAAAAAAAArQ/c3FSlPU8SzI/s1600-h/Workforce+Disruption

via Calafia Beach Pundit

 
At 2/05/2009 12:04 PM, Blogger misterjosh said...

What was the lead up to the great depression? I think if there's going to be a comparison, it should be 1937-8-9, v. 2007-8-9. Nobody think it's as bad as the depression yet - just afraid that it might get there.

 
At 2/05/2009 1:24 PM, Anonymous Anonymous said...

"it should be 1937-8-9,"

How do those years figure into the lead up to the Depression?

 
At 2/05/2009 1:25 PM, Blogger Dave Narby said...

Graph is misleading.

We're at the START of GDP decline, not in the middle.

Give it a couple quarters and get back to me with this premise...

 
At 2/05/2009 1:25 PM, Blogger Marko said...

They claim that Bush's overspending is what got us into this mess, so their solution is to spend far more than he did. Just BRILLIANT.

 
At 2/05/2009 3:16 PM, Anonymous Anonymous said...

What kind of deflator was utilized in the 1930's data?...PRRRRROBABLY not the same deflators that are used to "cook" the GDP data nowadays...

 
At 2/05/2009 3:50 PM, Anonymous Anonymous said...

Beware of the details of your assumptions - the WSJ forecast is 4Q to 4Q - which is being compared to a year over year forecast. The -0.3% should be more like -1.2%; your point is still valid but the chart is not as telling.

 

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