Current Events and the Psychology of Politics

Featured Posts        





Mar 3rd, 2009

Is It Finally Time to Use the Dreaded D-Word?

In this photo combo made with file photos, part of...
History repeats? Job hunters mass for $4 a day work in 1935 and the line unwinds outside a New York City job fair last week. Unlike recessions, there are no firm rules for what makes a depression. (Photo credit: Associated Press)

March 2, 2009

WASHINGTON — A Depression doesn’t have to be Great — bread lines, rampant unemployment, a wipeout in the stock market. The economy can sink into a milder depression, the kind spelled with a lowercase “d.”

And it may be happening now.

The trouble is, unlike recessions, which are easy to define, there are no firm rules for what makes a depression. Everyone at least seems to agree there hasn’t been one since the epic hardship of the 1930s.

But with each new hard-times headline, most recently an alarming economic contraction of 6.2 percent in the fourth quarter, it seems more likely that the next depression is on its way.

“We’re probably in a depression now. But it’s not going to be acknowledged until years go by. Because you have to see it behind you,” said Peter Morici, a business professor at the University of Maryland. …

By one definition, its a downturn of three years or more with a 10 percent drop in economic output and unemployment above 10 percent. The current downturn doesnt qualify yet: 15 months old and 7.6 percent unemployment. But both unemployment and the 6.2 percent contraction for late last year could easily worsen.

Another definition says a depression is a sustained recession during which the populace has to dispose of tangible assets to pay for everyday living. For some families, that’s happening now.

Morici says a depression is a recession that “does not self-correct” because of fundamental structural problems in the economy, such as broken banks or a huge trade deficit. …

The Great Depression retains the heavyweight crown. Unemployment peaked at more than 25 percent. From 1929 to 1933, the economy shrank 27 percent. The stock market lost 90 percent of its value from boom to bust.

And while last year in the stock market was the worst since 1931, the Dow Jones industrials would have to fall about 5,000 more points to approach what happened in the Depression. …

The current downturn has many of the 1930s characteristics, including being primed by big stock market and real estate booms that turned to busts, said Allen Sinai, founder of Boston-area consulting firm Decision Economics.

Policymakers and economists note there are safeguards in place that weren’t there in the 1930s: deposit insurance, unemployment insurance and an ability by the government to hurl trillions of dollars at the problem, even if it means printing money. …

[T]here are no guarantees the massive economic stimulus package and series of bank bailouts will stave off a nightmare recession, or worse. …

In this Oct. 24, 1929 file photo, crowds panic in the Wall Street district of New York due to the heavy trading on the stock market. The epic hardship of the 1930s is the best-known depression in American history, but it doesn’t necessarily take that kind of nightmare to trigger the D-word. (Photo credit: Associated Press)

The depression that consumed most of the 1870s and followed something called the Panic of 1873 makes a better comparison to what’s happening now, said Scott Nelson, a history professor at the College of William and Mary.

Financial markets had become centrally located by the 1870s, notably in London. And nations had not yet enacted the protectionist trade policies that were in place by the 1930s.

The results were not exactly promising. Gangs of orphans roamed city streets as men moved west to pursue cattle industry jobs. Widows struggled to make money by serving unlicensed liquor. Thousands of workers, many Civil War veterans, became transients.

The downturn lasted more than five years, according to the economic research bureau — four times as long as what the United States has endured so far in this downturn.

Today’s recession is already longer than all but two of the downturns since World War II. But for now, public officials are being extremely cautious about the D-word. …


Related report on this site

Sliding into Recession . . . Again? (July 31, 2011)

Economy Crawling from Hole (April 2, 2011)

Strongest Job Gain in Three Years (April 2, 2010)



Security Developments in Iraq

Security developments in Iraq on March 2, 2009, as reported by Reuters.

MOSUL – Gunmen killed a man as walked through central Mosul, 240 miles north of Baghdad, police said.

MOSUL – Two militants accidently detonated a roadside bomb they were attempting to plant just west of Mosul, killing themselves, an army souce said.

KHALIS – A bomb planted on a motorcycle exploded outside a mosque, killing three civilians and wounding 16 others in Khalis, 50 miles north of Baghdad, police said.

BALAD RUZ – A roadside bomb targeting an army patrol killed two soldiers and wounded three others in Balad Ruz, 55 miles northeast of Baghdad.

BAGHDAD – A U.S. soldier died from injuries received on a patrol north of Baghdad, the U.S. military said in a statement.

KIRKUK – A policeman was wounded by gunmen in an attack late Sunday in southern Kirkuk, 155 miles north of Baghdad, police said. The man was working as a guard for an Interior Ministry official.

Security developments in Iraq on March 1, 2009, as reported by Reuters.

FALLUJA – A suicide bomber killed the cousin of Ifan al-Issawi, head of a U.S.-backed neighborhood patrol, when he managed to entered Issawi’s house in Falluja, police said. Issawi, a winning candidate in the Jan. 31 provincial elections, was not harmed. Falluja is 35 miles west of Baghdad.

SAMARRA – Mahmoud Khalaf, the mayor of the city of Samarra, was wounded by a roadside bomb while his convoy was passing by, police captain Mahmoud Anwar said.

Security developments in Iraq on Feb. 28, 2009, as reported by Reuters.

BAGHDAD – A civilian and a senior police officer were killed and nine people wounded when a car bomb exploded near restaurants in the west Baghdad district of Mansour, police said.

UDHAIM -Iraqi police arrested 11 suspected militants and confiscated a weapons cache in Udhaim, 60 miles north of Baghdad, police said.

BAGHDAD – A roadside bomb wounded six people, including three police officers, when it struck a police patrol in Baghdad’s eastern district of Zaafaraniya on Saturday, police said.

BAGHDAD – A roadside bomb wounded two civilians when it exploded as a police patrol was passing in Baghdad’s southern district of Doura on Saturday, police said.

HAWIJA – Gunmen shot dead two members of a group of U.S.- backed neighborhood patrolmen and wounded another two in an attack on their checkpoint in Hawija, 130 miles, north of Baghdad, on Friday, police said.


Department of Defense Identifies Army Casualty

The Department of Defense announced the death of a soldier who was supporting Operation Iraqi Freedom.

Spc. Brian M. Connelly, 26, Union Beach, N.J., died Feb. 26, 2009 in Adhamiya, Iraq, of wounds suffered when his vehicle was struck by an explosive device. He was assigned to the 40th Engineer Battalion, Task Force 1-6, 2nd Brigade Combat Team, 1st Armored Division, Baumholder, Germany.

After graduating from high school in 2000, Connelly enrolled in Brookdale Community College, where he studied computer technology for about 18 months. He joined an electricians’ union, then was laid off.

Connelly had married his wife, Kara, just a few months previously, in September 2008. While speaking with her via webcam just four hours before he was killed, he told her his tour in Iraq had been shortened by three months and that he would be heading back to his base in Germany in May.

After finishing his Army stint, Connelly hoped to land a construction job to help pay for his wife’s college. They talked about moving south, to someplace warm and affordable, and starting a family.

3 Responses to “U.S. Economy in Depression?”
  1. Immelman for Congress » Blog Archive » Extremism Explodes in America Says:

    […] U.S. Economy in Depression? […]

  2. Immelman for Congress » Blog Archive » Tea Party Presidential Primary Says:

    […] U.S. Economy in Depression? […]

  3. Immelman for Congress » Blog Archive » Sliding into Recession . . . Again? Says:

    […] U.S. Economy in Depression? (March 3, 2009) […]

Leave a Reply

You must be logged in to post a comment.