American Recessions are Nothing New

When Barack Obama was inaugurated president the unemployment rate was 7.8%.  That was January 20th, 2009.  Subsequently the unemployment rate rose to 10.1% in October 2009.  Since then it dropped to 8.8% in March of this year but has now risen to 9.1%.  That was a bit of a roller coaster.

Despite the federal government’s best efforts the unemployment rate rose from 3.2% in 1929 to 23.6% in 1932. It never dropped below 14% until 1942 when WWII was in process.  The massive expenditures of the war proved that Keynesian theory does work but the cost is astronomical.

On “John King, USA” on Thursday, Richard Quest said he was looking for a low increase in jobs of 90,000 to 120,000.  That number is twice the BLS reported increase of 54,000 new jobs.

Friday evening: “CBS Evening News,” Harry Smith (lead story): “Tonight, too much firing, not enough hiring: The economic recovery hits a detour. But the president says it would have been a lot worse without the auto bailout” … “NBC Nightly News,” Brian Williams (second story after John Edwards): “Hitting home: Americans are feeling it every day. And tonight, new evidence is out on the economy stalling out” …ABC’s “World News,” George Stephanopoulos, filling in for Diane Sawyer, (second story after Edwards): “Surprisingly bad unemployment numbers fuel new worries about the economy: Is the recovery in reverse?” “John King, USA” started with an interview of Chrystia Freeland, of Reuters and Dr. Peter Morici, Professor at the R.H. Smith School of Business at the University of Maryland, with both of them agreeing that the focus in Washington should be on jobs but it’s on debt reduction.

While Mitt Romney is correct in saying, “He can’t keep blaming George Bush”, neither he nor any other politician has offered a coherent plan to revise the economy and bring back jobs.

The history of recessions and panics in this country goes back to 1797.  That first panic is listed as one of the 13 worst in America’s history.

Our economic system appears to have an inherent flaw.  Despite Ben Bernanke’s study of the Great Depression,   he does not know how to avoid recessions and does not know how to speed a recovery any more than anyone else.  No doubt, eventually this recession will end.  We just don’t know when.