At first I didn't see the updated chart on your web site. This is most
interesting. IMO this puts the “boom” of the late '90s in its place as
much more of a financial bubble than a transformative “true” boom.
Good times just rolling along for “banksters” but all the malinvestment
spawned by the boom has left us struggling to find a theme.

PS Did you come up with the term “Fake Recovery”? Love it . . .

Larry/DoctoRx

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“Nowhere near the Depression

When it comes to this core question, I agree wholeheartedly with Meltzer. This is not the Great Depression II, nor will it be, nor was it likely to have been. I wrote a fairly personal post on this very point at the height of the panic last year called “Worse than the Great Depression.” My point was that America, the world really, is much richer than it was in 1929. The social safety net is much more robust. And policy makers are more knowledgeable than they were eight years ago. Comparisons to the Great Depression are misplaced.”

Two things that might be worth reflecting upon: 1) Your outlook would probably a lot more sober if you were facing unemployment yourself. 2) Social safety net? Are you insane? Charities and soup kitchens and shelters are already closing down because they've run out of funding. States writing IOU's. Unemployment Insurance? Good grief, is that what you're counting on? Either you are being paid to lie, or you incredibly closed off to the real world, or both. People knew vaguely how to survive back then. These days knowing how to program the microwave is considered useful. Millions of people who don't know how to care for themselves adequately in a crisis, with millions of guns. Do the math.

http://blogs.wsj.com/marketbeat/2009/09/03/stra...

We're in the grip of a two party, one party state that hands the operation of the economy over to the largest banks and corporations, that lies us into aggressive wars and proudly announces that it tortures people and you're worried about us falling into fascism? Its not clear to you that that's already happened? Don't let the absence of marauding street toughs fool you, they're doing their warm ups at the town hall meetings.

Either way, we are facing a long, hard road if we want to correct prior malinvestment and return to sustainable long-term economic growth. The last generation of growth was pure fiction which came largely from taking on more debt.

The chart is interesting. Is it possible to update it adjusted for population/work-force growth over the decades?

Also interesting how the nadir in 1961, following 3 recessions in 8 years, was followed by a rapid rise in this parameter.