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The basic story so far is that this recession, so far, resembles '82.  No great new story there.  Many predicted that.  A key difference, of course, is where the Bernanke Fed is at right now in comparison with the Volcker Fed then.  In '82, Volcker was able to contract the money supply to combat inflation, and then pull rates down dramatically to help engineer a robust recovery on the top-line numbers.

Obviously, that's not where Bernanke's at right now.  Rates are already at zero, deflation is the current state, and we're basically in a place where we're testing out theories Bernanke on Fed interventionism beyond the normal funds rate.

The chart looks really bad, even adjusting for population.  We're basically looking at declines in employment roughly equivalent to the '73 oil crisis already.  The crash is still accelerating, and we're already in the second-worst recession in the Postwar Era.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Feb 9th, 2009 at 07:04:38 PM EST
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