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MinnEcon Blog
Paul Tosto

My recession was worse than your recession!

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I'm in a rolling discussion with a very good local economist about whether this recession is worse than the early 1980s.
I'm taking the 1980s. I think I have a pretty good case.
I realize I'm dangerously close to sounding like the old guy (47) droning on about how much harder I had it (I did have to walk a mile in the snow to school!).
But we've been asking people recently to share their first recession memories (add your own). And in coming weeks MPR will feature the recession stories of young people in our Public Insight Network.
UPDATE: Here's the My First Recession project.
So it seems like a good time to make a case that my first recession was harder.
I'll save you a lot of grim personal detail. Briefly, I was in college in the early '80s recession, came out in 1984 with an economics degree (HA!) and stumbled out of the gate with a bunch of part time jobs, including working as a night proofreader for a company that published church bulletins.
Here's my data argument that the early 1980s were worse.
GDP drops were scarier. Things are bad now but a look at quarterly U.S. real Gross Domestic Product data shows a serious, scary roller coaster from 1980 to 1983. Here it is in a chart: realgdp.png Yeah, that drop at the end of 2008 is bad, but come on.

Unemployment was worse. The U.S. unemployment rate topped 9 percent from March 1982 to September 1983, 18 months.

The unemployment rate topped 9 percent in May 2009. Will it stay that high through November of next year? I don't think so.

Inflation? Forget it. Inflation was brutal in the late 1970s and early 1980s, a tremendous destroyer of wealth.

Yes, inflation took a dive after the Federal Reserve went on a strangle inflation policy, which ultimately was a good thing but pretty darn painful to live through.

Looking for a 30-year fixed mortgage in February 1982? Sure! How does a 17.6% rate sound?

Been Down so Long? Maybe the best argument that this recession is worse is that the economy's fallen deeper, faster. That data looks pretty compelling.

Yeah, but...that's only because the economy started to fall from a much higher and more prosperous point in 2007 than in 1980.

It was a pretty crappy economy (malaise, anyone?) leading up to an awful recession.

OK, have at it. Whup me upside the head and tell me your recession was tougher. Unless you're 80 years old or older, you'll have a tough time convincing me!


BONUS INFO: Louis Johnston, that very good local economist who sparked this post, tells me he'll be on MPR's Midday program Friday at 11 a.m. Tune in!


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