skepticalfarmer

An Interview with John Steele Gordon: We're Nowhere Near the Great Depression

I have read most all of Mr. Gordon's books and I greatly enjoy and benefit from his historical reporting. The only thing that strikes me is the difficulty in comparing any era, particularly this era, because of the way things are measured differently and the structural changes in society.

In the former, the unemployment rate statistics have been ginned to such a degree that it is hard to figure out what our real unemployment rate is. Some people have said that if we calculated it the same way as in 1932, today we'd have >18% unemployment. Not the 25% of the Depression, but if true, that is far worse than we are being led to believe, and closer to the depression (at this stage of our downswing).

As to the later, an earlier post said that it is harder to go door-to-door these days due to a different societal structure, less trust. We also have every "poor" person with a cell phone and access to the internet. With today's better communications, the unemployed simply don't walk around as much! So how do you compare? Internet and social service job searches to door knocking?

And while I am on the subject (with one of my favorite authors)...this hard-to-compare issue is glaring whenever some one recounts the cost of building a bye-gone estate or factory, etc. in "today's dollars", using a simple CPI inflator to make a comparison. It is hard not to laugh when an author says that "XYZ Millionaire's Newport mansion costs the equivalent of $15 million today!" when in fact the hiring of just the labor to do the work (an army of Italian stone masons for the exterior, 50 skilled woodworkers for the internal moldings, etc....not to mention a staff of 30 to run the place) would cost that much without the land and material. From a "societal labor" structure point of view, you simply cannot find that many people to work that way "today" and so one can't seem to make a standard CPI-inflator type comparison between bye-gone dollar costs and "today's dollars".

Housing Prices: How Far to Go Until the Bottom?

Have you tracked the accuracy of previous futures indications, to know if the futures are good predictors?

Burst Housing Bubble Eliminating Two Decades of Wealth

The most interesting thing I note about the dramtically increased "investment" in housing over the last years is that it is non-productivity-incre... use of "investment". In other words, the money that was poured into housing did not increase our ability to produce more, become more productive, like an investment in new technologies or new factories. So the pay-off for this "investment" is merely nominal, rather than real, wealth increase.