For anyone that still has a job, percentage unemployment numbers mask the misery and potential for unrest felt by those who have lost a job and are nearing the ends of their financial (and other) ropes. Percentage comparisons with employment in the great depression (25% vs now "7.6%") seem to indicate we have a huge distance to cover if we are to approach the misery experienced in the great depression.

But a vastly more interesting and important comparison is of actual total human beings without jobs or who are severely underemployed. The number of people affected at the peak of the depression was 13.5 million unemployed vs today's official number of 11.6 million. Eleven million six hundred thousand human beings unemployed is within a dangerously short distance of the worst number the Great Depression ever printed - and the calculations then were much more conservative than they are today.

Is the problem with the economy inflation or deflation? If you are buying food, gasoline, or college tuition, you are seeing dramatic inflation. If you get an assessment on your home, sell your SUV or GM stocks or bonds, you are seeing massive deflation. How can these both be happening at once? How can such an economic disease be treated? What should this phenomenon even be called?

In recent months, we have seen wave after wave of attempted solutions and bailouts to put a floor under collapsing housing prices with the only result so far being credit contraction and consumer strikes. In every case, the approaches have been focused on providing help (benefits) to those whose actions have contributed to the mess, whether through ignorance, greed or just plain going zig when they should have gone zag.

The problem with this focus is that it rewards bad economic decisions and in some cases even actively encourages those who are on the cusp of financial difficulty but who might be able to tough it out to actually realize that it is in their narrow personal interest to go ahead and stop paying the mortgage since that is what will qualify them for the reward of a mortgage bailout. Following this path will vastly increase government deficits, and at best just slow down house price deflation, while further decreasing the value of already horribly distressed financial assets at the banks, further eroding credit availability...resulting in the liquidity trap that everyone everywhere is trying to stop.