'Is It the '30's Again?' Wall Street Journal Sunday

Happy days are here again...or maybe not. The Journal Sentinel carried a forum from The Wall Street Journal on Sunday and it caught my interest. What I was most curious about was the basis used by the Yeas and Neas to make their points. A month ago I put out a message that was well received by people who are looking at facts and lambasted by people who want happy thoughts and positive spins. It looks like the same goes for the WSJs forum contributors.

Brett Arends says this is a great depression and he suggests we need to fix the leak before taking up pom poms--"Despite the cheerleading...we have barely begun to address the fundamental problems that lead to the crisis in the first place." Brett goes on to site factual evidence of the depth of the seriousness of the situation: US household debt is equal to 59 weeks of income. (there are 52 weeks in a year). Middle class incomes have barely kept up with inflation for 3 decades. Real unemployment is at historic levels. The jobless figures don't tell the entire story because many workers are taking part-time jobs when they can't find full time work---one in six workers are unemployed. The unemployed and underemployed result in a deepening housing crisis. Mortgage defaults, bankruptcy, are on the rise and huge waves of mortgage resets are coming due in the next 24 months. All quality facts to make a point.

What do the happy meal people have to say? Nothing surprising. Dave Kansas writes "...doomsayers..." "...mutterers of darkeness..." Name calling and comparing hollow numbers is the best the cheerleaders can do.
Deciding it's not so bad by comparing the  unemployment rate of 2009 at 9.8% to the unemployment rate of 20% in the 1930's is arriving at a conclusion on weak information. In the 1930's a small percentage of Americans owned real estate. An unemployed person in the '30's more likely had an ability to sustain themselves by going home to a family farm. Farms were the major employers in the '30's. Today the unemployed have lost jobs in small businesses. Those small business owners are out of work too and they may not show up in the unemployment numbers.

I like the double edge sword Mr. Kansas uses as a glint of silver lining--"Corporate restraint seems to be reducing excesses and laying the foundation for sustainable economic growth." Corporate restraint and reducing excesses are measurable are tangible in job cuts, salary reductions, and less spending.

Both Mr. Arends adn Kansas agree that the jobs picture is the contributing factor to depression and recovery.  Related articles appear on other pages of the same section. Filings for Chapter 7 bankruptcy are up a third from last year. The typical filer is 50 something, has credit card debt, a mortgage, kids in college, and had a well paying job. Chapter 11 bankruptcy, for business reorganization, is running 7 times higher in U.S. Eastern district court this year---70 compared with 11 in the first nine months of '08.

The McClatchy News Service has a report out of Washington that tells how Moody's punished workers who warned of trouble on the horizon. Kill the messenger is always the prefered method of swindlers and false profiteers.

It's OK to see things as they are and ask why or why not.  An effort by everyone to fix the leak will do more for refilling societies glass than name calling and denial.  Is it a depression or recession? Who cares what it's called but I do recall what Ronald Reagan said when running against incumbent President Jimmy Carter--"A recession is when your neighbor loses his job. A depression is when you lose your job. And recovery begins when the President loses his job." Sounds like a pretty fair description.