Charles Pillsbury III

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The mediocre malaise

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Stossel again. This time on the current economic woes (not a depression, and not quite yet a recession… though approaching bear market).

… A recession is defined as two quarters of negative economic growth. We haven’t even had one quarter of negative growth.

Yes, growth has slowed, and many people are suffering because of falling home prices and higher food and energy prices. These are real problems, but watching TV, you’d think we were in a recession so severe it must be compared to the Great Depression.

So let me stop here to repeat that. We are not in a depression. We are not even in recession. Get a grip, guys. We ought to point out that whatever today’s problems bring, we are far away from reliving the Depression.

As Amity Shlaes points out in her book “The Forgotten Man: A New History of the Great Depression” — which has just been released in paperback — by November 1933, unemployment had skyrocketed to over 23 percent. Think about that: 5 percent unemployment today vs. 23 percent during the Depression. Amidst today’s talk of stock market “collapse,” remember that during the Depression, the Dow plummeted to 90, a loss of nearly 75 percent of its previous value. “This downturn is to the Depression as a drizzle is to Katrina,” says Shlaes, senior fellow at the Council on Foreign Relations. “In the Depression, America confronted deflation. There literally wasn’t enough money. People made their own scrip, Monopoly money, to pay their bills. In Utah, they made a currency called the Vallar. Today, we are in an inflation. If this period is like anything, it is like the 1970s.”

I’m also not saying there are no economic problems today. But today’s problems are no excuse for reporters to make glib comparisons to the Great Depression.

[From RealClearPolitics - Articles - Dire News from My Colleagues]

I’ve been trying to get my son to read War of the Worlds (stick with me here this may make some sense later), because I want to follow it up with the original radio drama and the fantastic look at the cultural phenomenon associated with it as analyzed and discussed by Jad and Robert of RadioLab (one of the BEST audio shows out there… go subscribe to the podcast now). The RadioLab discussion includes a talk on how you get much the same sort of gloom and doom hype from your local evening news these days, and how much of the practice can be tracked to how effective the War of the Worlds broadcast was because… well… hype “sells.” This is why you hear the teasers “what’s in your drinking water that could KILL you! tonight at 11″, and probably a good part of why the perception one could get from the major media is that people are starving in the streets for lack of employment/food/money, when the reality is that times are tougher, budgets are tighter, and still we (even the US Poor) still live better than 80% of the world’s population (and more than our grand-parents had during the depression).

I am, by nature, skeptical of anything somebody in the media, politics, corporate culture… and almost anything that could be construed as “leadership” position might say.


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July 12th, 2008 at 9:05 am

Posted in Misc

One Response to 'The mediocre malaise'

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  1. It’s part of the immediate-gratification culture. If our investment are not constantly growing, we panic. If we need to endure a few months or years of an economic reality which is a little bit more difficult, we panic. Well, I try not to. But it’s hard.


    16 Jul 08 at 2:55 pm

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