re re re re redepression

Sing that title to the tune of Deck the Halls. Because now I'm daydreaming about the holiday season. Thanksgiving last weekend was great. Drive drive drive (layover at the Somerset Hampton Inn) drive drive to Pittsburgh. We spent a warm and cozy day with family and honorary family. We marched in the crock pot parade past my sister's traditional upside down Thanksgiving tree (more about that some time) and then lined those crock babies up on her buffet next to the grand turkey platter. We saw Spamalot at the Benedum, then had dinner on the Mount with a table by the window and a gorgeous view of the Golden Triangle. Then a Sunday drive drive drive drive drive (eat at the goofy Breezewood Gateway) drive drive back to D.C.

This weekend should be spent joyfully buying Christmas gifts. But honestly, this giving and getting of stuff lost its luster for me when I learned that there may be no Santa Claus. No workshop in the North Pole, no busy elves, no flying reindeer orbiting the earth on their way to my house. Then the department store windows filled with mechanical moving dolls in holiday settings gradually disappeared as I grew up. Now it's just shopping lists, malls, parking lots, and wallets. Where's the magic?

So instead I've been reading online news and views. Uh oh.

re re re re

It's official. We've been in a recession for one year now. The fundamentals of our economy are not exactly sound. We've cut interest rates, bailed out Wall Street, kinda sorta half-nationalized some banks, and will probably need to do something big for industries like auto. Why? Well, failure in the auto industry would likely result in "one to three million jobs lost, perhaps permanently, at the worst possible moment." So says Paul Krugman in a Huffington Post interview.

de de de re

This isn't official, but maybe the year-old recession is moving aside for a full-on depression. Krugman has been saying no. But when HP asks if recent weeks are changing his opinion, he answers, "Yes -- the numbers on the real economy, stuff like retail sales, industrial production, imports, exports, have been coming in even worse than I expected. So right now it looks as if the economy is really falling off a cliff. This makes me less sure than I was that even strong support measures will pull us out of the dive."

Half a million people were laid off in November. Expect more next week, then a break because no one wants to lay people off on the week before Christmas. But just how bad is half a million in one month? Here it is on the scale of recent big one-month layoffs, created from the Dec 5 Business Week.

Worst month in the 1990-91 recession: 306,000
Worst month in the 2001 recession: 325,000
May 1980, worst month in the 1908-82 recession: 431,000
November 2008: 533,000
December 1974, worst in the 1973-75 recession: 602,000

But this article in the same issue of Business Week says Friday's bad news about the layoffs produced a good day on the stock market. Apparently, layoffs are often at their worst just before a recession ends. And stock buyers figure that more people hurt by layoffs will mean more support for stronger government action to bolster the economy. Maybe 533,000 will be our worst month in this re de. Maybe we won't lose those one million auto jobs.

Which makes me wonder how our current 6.7% unemployment rate compares to other redepressions. According to this Dec 3 article in Fortune the peak of a redepression is generally worse than this.

November 2008: 6.7%
Peak of the 1973-75 recession: 9%
Peak of the 1981-82 recession: 10.8%
Peak of the Great Depression of 1930-1932: 25%

Which makes me wonder what was behind the other redepressions?

Great Depression of 1930-1939: complete banking collapse without insurance
1973-75 recession: oil crisis
1981-82 recession: deliberately high interest rates used to control inflation
1990-91 recession: collapse of junk bond market, savings and loan crisis
2008-?? recession: collapse of housing market, mortgage and credit crisis

And what's the difference between a re and a de?

Well, apparently economic downturns were always called depressions until the big one came along. So it was named The Great. Ever since, we call these things recessions because they aren't nearly that bad. And most believe The Great can't happen again because we've got Federal Deposit Insurance (FDIC) and we learned not to let banking just collapse. Okay, we did let the federal banking regulations slide stupidly, but maybe we'll put them back now. We might let the auto industry collapse, or maybe just see what happens if we lose one or two of the big three. But hey, now we've got Social Security and a safety net for the unemployed. Okay, we let that safety net slide too while we argued about who was and was not deserving of safety. But maybe we'll put some of that back now. Maybe we'll try nationalized Freddie, Fanny and a nationalized auto industry.

Hey, did you hear the one about the engineer who took an early retirement offer, then his wife died, then he lost the house, and now he can't get a job at Lowe's? Whoo-ee it's a good one.

Surely there are still animated window displays somewhere... OMG look at Macy's in New York. It's actually creepy and depressing.



Or don't look at Macy's. Let's just go where they still do it right.



Thank you, Canada.

I'll buy gifts tomorrow. Maybe I can search youtube for more window displays and then shop online. Amazon.com is looking rather festive with cute candy canes decorating their banner. But first, I'll go to Wake Up Little Suzie, our wonderful neighborhood gift shop. If I can't find something for everyone there, I'll head downtown to the museum shops. I'll buy a street corner Christmas tree. Maybe a wreath and some holly, too. I'll bring the ornaments up from our storage unit in the parking garage. It is good to deck the halls.