A recent article about the current economic meltdown on Mises.org opened with the claim, “Far from being prosperous, our America is now being buffeted by the worst financial tsunami in generations.”
The folks at Mises don’t usually travel along with the mainstream media, but in this case they did. Sensational claims that things haven’t been this bad since the Great Depression are being commonly made. But this just isn’t the case. We only have to go back to the early 1980’s to find times that are much worse than today.
It was only in December that unemployment rose above 7%-the first time it reached this level in over 15 years. Back in 1980, unemployment crossed the 7% mark in May; however, it had been above 7% as recently as 1977-a respite of only three years.
And once over the 7% mark in 1980, unemployment didn’t stop rising until it registered 10.8% in November and December of 1982, and didn’t fall below 7% to stay for a while until November 1986. So during the recession on the early 1980s, unemployment stood above 7% for 76 of 78 months, or six and a half years.
Today, we’ve been over 7% for only three months. The unemployment rate in February was 8.1%.
Inflation was no better n the early eighties. It moved into double digits in March 1979, reached 14.76% in March 1980, and didn’t get back to single digits to stay until October 1981-32 months later. Contrast that to this year, with inflation in February at less than one percent, after averaging only 3.85% last year.
The misery index (unemployment plus inflation) in January 1980 was 20.21%. In September 1982 it still stood at 15.14%. In February it was 8.34%.
So while times are hard, they don’t yet compare to the pain of the early 1980s. And remember, the 1980’s didn’t start out bad on their own. The tough times were a result of the bad public policies of the 1970s.
So there is hope ahead. We can reject the big spending, big government ways that hurt so many people almost 30 years ago. By reducing government mandates that increase consumer costs, rejecting uncontrolled spending, and opposing high taxes, we can give the decade beginning in 2010 a fighting chance to start out better than the 1980’s.
– Bill Peacock