Things Aren’t As Bad As 1982: So Why Are We Moving So Fast?

The New York Times notes some interesting statistics in an article today. Boiling it down, they pretty well establish, at least in terms of unemployment, that the current recession is not as severe as the 1982 recession. So why does it seem so much worse.

I lived through 1982 and admittedly was in a secure job at the time. It was rough but certainly this one causes me more angst than that one ever did. Why? I can’t put a finger on it. I wasn’t threatened from a job standpoint then, so maybe that’s a factor. But I don’t recall the degree of panic both on the ground and among the political class that I see now.

It may have something to do with the speed with which the economy has declined. It didn’t seem to happen that quickly in 1982. Or maybe it has something to do with the collapse of iconic names. I don’t recall that happening either. People were laid off, interest rates were astronomical but there didn’t seem to be the pervasive feeling that the company you thought would never fail could be gone tomorrow. In fact, most struggled through.

It’s only a guess, but I suspect that communication may have something to do with the sense of doom now. I don’t need to go into a long dissertation about how information flies around and everyone is instantly tuned into the crisis of the day. You’ve read enough of that. But it does beg the question as to whether or not we might be overreacting.

Are we rushing headlong into a fiscal stimulus plan that might be overkill? Should we take more half-measures and see where we are three or four months from now. I certainly don’t have the answers but it might be worth taking our time.

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