No One Seemed Worried About The Economy This Weekend

Moving around Atlanta this weekend you would never think that we are "in the midst of our greatest economic crisis since the Great Depression".  Traffic jams in the Buckhead shopping district during the day, the mall packed with people carrying shopping bags.  A small florist telling me business was good.  Traffic jams in Midtown at night.  Fine dining establishments packed.  $50 a plate main courses being ordered (not by me.)

On Saturday my wife stopped reading the paper.  Said it was nothing but bad news.  Sunday morning I read a little article in The Wall Street Journal by Bradley R. Schiller.  He is an economist.  Has written more then a few books on the subject.  An Amazon search brings 44 results.

The point of his article? That the current economic climate we are in is more like the 1981-82 recession then what happened in the 1930s.  Some of the facts according to Mr. Schiller.

Job losses. Current state 2.2% of work force.  1981 2.2% of work force.  1930 4.8%, 1931 6.5%, and 1932 7.1%.  The Great Depression had job losses between 2 and 3 times what we are seeing today.

Unemployment.  Currently sits at 7.6% and heading in the wrong direction.  1982 peak was 10.8%, where many predict we are headed.  During the Great Depression the peak was 25.2%.  Over three times as high.

Gross Domestic Product (GDP).  The Congressional Budget Office is predicting a GDP decline of 2% in 2009.  In 1982 GDP contracted by 1.9%. Pretty close. In 1930 GDP contracted 9%, 1931 8%, and 1932 another 13%. 

Car Production.  Now off 25%.  During the 30s off 90%.

Bank Failures.  Over 10,000 in 1933.  A couple of dozen last year.

Stocks.  37% now.  90% then.

Don't get me wrong.  Things are bad.  I am thankful every day that I can get up and go to a job that I love.  I know people that have lost their jobs.  I am concerned for them.  My family has cut back on its spending and I see others that are doing the same.  It is not fashionable to consume. 

However, based on what I saw this weekend I don't think the picture is as bad as it has been painted.  Mr. Schiller's statistics seem to back this up.  What about you?  Do you feel better or worse off then what you see and hear in the broad media landscape?

February 16, 2009  |  Comments  |  Tweet  |  Posted in Business