A prominent financial blog, CalculatedRISK, which came to fame by anticipating the housing crash, publishes a frightening chart each month that tracks the percent of job losses from an employment peak over time, for each recession since 1948. Here is a mini-version of the chart, but please click on that to see the full-size version at the CalculatedRISK website.
The first reaction of many people when they see this chart is shock at how much further employment is off from its peak in this recession than in previous recessions. This recession has been absolutely devastating for workers.
The next freak-out comes from realizing how many YEARS we are away from returning to that last employment peak. We are in for some rough years, people. (Although, it is important to note, that last employment peak was based on fraudulent economics and unsustainable policies; so, sure, you can temporarily employ people based on a bubble economy.)
But what I find most interesting about this chart, and most worrisome, and least commented upon, is that the time it takes to return to the last peak of employment after a recession started to increase significantly in the 1980s, grew longer still after 2001, and is likely to be significantly longer again this time around. Be very afraid.
What could account for the ever-increasing duration of job losses following recessions over the last 30 years, and especially since 2001?
Do you think it just might be that the politicians, the experts at the Fed and the genius economists might not be as smart as they think they are? Or perhaps they are skilled, but what they are skilled at is bailing out their donors, pals and colleagues, while advancing policies that shaft the working man and working woman?
Business cycles–recessions–have always been with us, and always will. But they are getting worse and worse for workers. It’s time to rethink who is really being helped by government interventions to mitigate recessions, and who is left holding the food stamps and 99 weeks of unemployment benefits.
UPDATE 10/9/10 12 pm: IBD reports that at current employment growth rates, the US will not return to the pre-recession employment peak until the year 2020!
Category: Economy, Federal debt and deficits, Government control
Tags: CalculatedRISK, employment, recession