Courtesy of King Banaian, this presentation comes from the Minneapolis Federal Reserve, which has a handy Flash widget that allows users to measure post-World War II recessions against each other by both employment and production. It's a handy tool not just for comparing the depth of the recessions, but also the time for the recovery — and pull off some of the spin as well. The Chart of the Day shows employment figures by months after the start of recessions. How does the 2007 recession compare?
Only the 1948 recession was close to being worse than the 2007 recession — but it's worth noting that a year ago, that wasn't true at all. In fact, after the first twelve months of the 2007 recession, national employment had only declined about 2.25%, putting this recession in about the middle of the range for post-war recessions. And the 2007 recession is alone in continuing its decline after the 12-month mark; in all previous post-war recessions (with the exception of the 1980/81 double-dip recession), US employment rebounded by that point.
The production numbers look similar:
We're not in a recovery, especially not in employment. Production may have incrementally improved in 2009Q3, but hardly enough to stimulate job creation. ... The economic policies of the Obama administration have lengthened the recession and delayed what would be the normal recovery process, mainly by signaling to investors and businesses that costs will go up in taxes and energy prices, as well as burdensome mandates on health insurance. As a result, people are not investing their money into job-creating risk but are sheltering their cash instead.
The US needs a change in direction, and fast. Another Porkulus will give the illusion of action while deepening our debt and creating more need for higher taxes in the future. We have to make investment attractive, and the only way to do that is to cut taxes, pare back government programs, close the deficit through belt-tightening, and get Congress out of the private sector.