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Your Recession in Charts

Catherine Rampell updates this bummer of a chart:

joblosses.jpg

The big surprise, at least to me, was that public-sector jobs experienced a sharp fall. They'd been doing pretty well throughout the recession. The culprits here are state and local governments, which are laying off workers because they're pretty much out of money. Sure glad we cut all that state and local aid out of the stimulus!

By Ezra Klein  |  October 2, 2009; 3:06 PM ET
 
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Comments

You mean, "Sure glad we cut all that state and local aid out of the stimulus, Olympia!"

Posted by: bmull | October 2, 2009 3:48 PM | Report abuse

Since the early 1970's real wages have been flat to falling. Workers' share of GDP has been falling. Management used to reinvest profits in the business, and/or pay dividends. But since the marginal tax rates came down beginning in the 1980's, management instead pays itself ever more exorbitant compensation packages.

To make up the difference, ordinary people stopped saving then started borrowing. The financial sector aided and abetted this by devising ever more clever means to hook people on debt.

Now the golden goose is dying because people can't afford to buy stuff any more. People are cutting back on credit and saving as much as they can. Business can't get credit because the banks are hoarding the money and so no one is hiring. The gov't is stymied by "deficit hawks" who would rather see unemployment keep rising than spend public money to make up for the decline in private demand. And the rich? The people whose share of income has more than doubled over the past few years? Don't even think of raising their taxes back to where they were in the Clinton years. That's Communism!

This is a recipe for an unjust and unstable society. It really can't last.

Posted by: Mimikatz | October 2, 2009 4:05 PM | Report abuse

Mimikatz - as good a 3 paragraph summary as I have seen.

I would add that what I find really remarkable is that many of the rich seem to be willing to allow the golden goose to die.

Posted by: luko | October 2, 2009 4:47 PM | Report abuse

I suppose the person who created that graph could have picked one more confusing but I don't see how. I don't think this graph is very useful.

It makes the current recession look worse because unemployment was so low when it started. In other words, the recession during 1980 started with unemployment at 7.0% (for example) and ended at 10.0% (for example). The current recession started with unemployment around 5.0% and is currently about 10.0%.

The natural rate of unemployment supposedly changed between the two periods. I say “supposedly” because it may have been simply a debt fueled boom that lasted for two decades…

Posted by: kingstu01 | October 2, 2009 4:54 PM | Report abuse

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