I’ve just read Bruce Watson’s article ‘The Great Recession: A Hidden Depression?‘ in the Daily Finance. To quote its opening paragraph in full:
The story of the Great Depression is often told in pictures: while few people recognize the names “Smoot-Hawley” or “Schechter Poultry,” photographs of bank runs and bread lines continue to pack a punch, almost 80 years after they were first snapped. But the Great Depression’s position as our absolute standard for economic disaster carries an unintended consequence: The power of its images seem to overwhelm — and minimize — the economic troubles of our own time. After all, if it doesn’t look like a Depression, how tough could things be?
As Watson documents in some detail (for the USA), the correct answer is ‘very tough indeed’. By the end of 2009, foreclosures had topped 4 million, and 14% of homeowners with mortgages were either in foreclosure or behind on payments. Much the same percentage of the population is homeless, of which about 40% are children. There seems to be little reason to think that the worst is past.
Which is odd. The news programmes I hear are constantly citing how much the stock market has risen by, and by implication, that everything is getting better. Most of the big indices have done pretty well. No news that I am aware of about the real economy, though – you know the economy that produces the goods and services and employs all those people who didn’t actually cause this crash but are certainly on the sharp end now. Why the complete lack of interest?
I suspect that the answer is that they’re not newsworthy. Not exciting bond traders or investment bankers. No need to worry about them.