A Google News search shows that the phrase "since the 1930s" has been used 6,223 times in the last month, and the phrase "since the Great Depression" has been used more than 14,000 times in the last month, and most these news references are comparisons of today's economic and financial conditions to the 1930s and the Great Depression. In contrast, the phrase "since the 1980s" has been used only 1,588 times in the last month.
Here's one problem: By comparing today's economic conditions to the 1930s and the Great Depression, the news media has apparently skipped the terrible economic conditions of the early 1980s and gone all the way back 75 years to the 1930s, without a comparison to a more recent period like the early 1980s. Consider for example the following comparisons of key economic variables today to the peaks for those variable in the early 1980s (and see graph above):
2008: 4% (Current)
2008: 3.7% (October)
2008: 6.5% (October)
30-Year Mortgage Rate
2008: 6.04% (Current)
Real Gas Price (2008 dollars)
1981: $3.45 per gallon
Bottom Line: The U.S. economy will certainly continue to experience economic problems and recessionary conditions through the first half of 2009, but a comparison of some of today's key economic variables to the early 1980s suggests that we are not even yet anywhere close to the economic conditions of the early 1980s. For example, the prime rate was 5 times higher in 1980 (20.5%) compared to today (4%), inflation in 1980 was 4 times higher, unemployment was 4.3 percentage points higher, the 30-year mortgage rate was 3 time higher, and real gas prices were almost twice as expensive as today.
So before we start talking about the "worst economy since the 1930s" couldn't we first use the early 1980s as a benchmark of how bad economic conditions can get during a more recent period?