Understanding the Times You Live In

I find it hysterical that politicians in Washington beat each other up over "waffling" on their views. I always thought the John Maynard Keynes riposte was best: "When the facts change, I change my mind. What do you do, sir?"

Here is a post by Brad DeLong on his blog where he changes his mind:

Back in late 2008 people asked me: is this a recession or a depression? I said that I would call it a depression if the unemployment rate kissed 12%. I said that I would call it a depression if the unemployment rate stayed above 10% for a year.

Neither of those has come to pass. But the unemployment rate has kissed 10%, and has stayed at or above 9% for two years now.

So I am moving the goalposts. I am adopting a suggestion in comments of Full Employment Hawk. Henceforth, I will call the current unpleasantness not "The Great Recession," but rather "The Little Depression."

That is tragic. The "Great Recession" has become "The Little Recession" mainly because Obama is a fiscal conservative unwilling to do the kinds of fiscally stimulative acts -- like a WPA, big infrastructure projects, and standing up to the Republican party -- that were required to change the arc of history.

The current US situation is bad. Here is Obama's former Chairman of the Council of Economic Advisors, Christina Romer:

The past two and a half years have been simply wretched for many American families. At its worst, employment was down some 8½ million from its peak. Unemployment hit 10.1%. This truly has been the worst recession in the United States since the Great Depression.

...

The unemployment rate is still 8.8%. More than 13 million Americans are without a job. Six million of them have been out of work for more than six months.

There is a lot of talk about whether this is a jobless recovery. The truth is, this has been a somewhat “growthless” recovery. Job growth is weak because GDP growth is weak. Aside from just a few quarters, GDP growth has been at or below its trend rate of growth of about 2½ percent. We just learned last week that GDP grew at only 1.8% in the first quarter of this year.

In brief, this is The Little Depression.