Factually, a lot of people are worse off than in the Great Depression.

A serious flaw in the authors take is the fact that one can hardly ever compare same-to-same. Given the fact that the modern economy is substantially different than the American economy in the 30’s, unemployment at 18% is in structural terms as bad as the collapse of employment in the 30’s. Actually I will go further and state that an 18% unemployment rate is worse than those measured in the 30’s as most obviously the economy is far more highly intertwined, interdependent with far more safety breakers and obviously a far larger population.

Factually, given the many safety valves and conditions which seek to mitigate systemic risk, a comparison on such things must take this into account when comparing the severity of the current substantive financial collapse. As well, the on-going travails of Dubai speak to the highly integrated nature of Finance and Financial products. Should Dubai be unwilling and or unable to make payments is to suggest it as a precursor to another round of perhaps more substantial collapse by leveraged counties on their debt; which may cascade into other areas such as bond issuance and certainly an increase in VIX, and its modeling in the residential mortgage markets nee the various ABX indices. As Dubai is seeking a cessation of payment due on a bond in mid December, such a request does not speak well for the ability for on-going operations to pay for their debt load, and brings to mind the fact that there are many such leveraged entities out there.

Taken into account, this is by any measure the worst depression since the 30’s, and given the indebted nature of the consumer base, there is no quick recovery in sight. As well there is the fact that the aforementioned residential real estate market is in no manner establishing a base. Some 65% of the mortgages in Nevada are in a negative equity ratio; given the continuing collapse in employment, and with adjoining other states in similar straits, another round of decreasing prices and the potential for increased foreclosures is not hypothetical it is certain.

In the past and as people seek to mitigate damage through the spurious use of a change in language, the word depression does in fact come to correctly define the current state of the economy. The word “recession” came into usage as Washington sought to place a positive spin on a collapsing economy; mere marketing. Reminds me of the joke, when a neighbor loses his job its a recession, the week after when you lose your job its a Depression!

Even if we do not include 1945-47, unemployment was 10.8% in 1982 and 10.4% in 1983. Both were higher than our current level of 9.7% I believe unemployment will go higher, so we could very easily surpass the 82-83 levels.

You initially raised the issue of mortgages in the Depression, not I. My post was only about GDP. Nonetheless, many Americans lost homes and farm and businesses in the Great Depression. In addition, we had natural disasters such as the Dust Bowl. So far anyway, we have not seen poverty-related mass migrations such as Hoovervilles and Okies in this downturn. Let’s hope we don’t.

As well, it is spurious to seek yet again, a direct comparison to mortgage defaults, as very few people held actual mortgages in the 30’s; and, modern mortgage product is not even tangentially comparable to any previous period. Given the fact that population is so much larger now, your statement of a 1934 50% default rate is not adjusted!

You mentioned mortgage defaults as though there is any comparison to the Depression. Estimates of urban mortgage defaults rates for 1934 are about 50%. Default rates were very high from 1926 through 1941. Now, urban mortgages in default are around 12%. That — 12% — is outrageous, but it’s not nearly as bad as it was back then.

I’m not trying to say that everything is groovy. Nor, am I suggesting that this is not a severe recession. It is. It is just that it is far, far different than the Great Depression.

As well is the looming mortgage re-set issue, where a large number of households are not going to be able to refinance into a product which allows them to maintain the house. Yet again a situation that did not face people in the Great Depression era.

It is at minimum problematic to compare and contrast different eras, given the fact that there has been huge structural changes to the society at large. To argue in any manner that the current financial damage is not substantive and in many measures the worst since the so called Great Depression is truly the work of the silly academic. Solutions to the substantive and myriad of issues, now that would really be something of import!

Unemployment is high now at 9.7%. And, if you want to count involuntary part-time workers and ‘discouraged’ workers, then the number would be in the mid-teens. However, using that same methodology for the Great Depression yields a number that would have been much, much higher.