Welcome, one and all, to the "communist states of obammica"!
Posted on 01/22/2009 3:09:01 AM PST by expat_panama
You often hear that we are now living through the worst recession since the early 1980s, and the comparison is not wrong. But it’s ultimately unsatisfying, because it is a little too vague to be useful.
Is the economy only a little worse than it was in the last couple recessions, as some have said, and still a long way from the dark days of 1982? Or are we instead on our way toward something that may even approach the severity of the Great Depression?
[snip]
The ranks of unemployed and underemployed, controlling for the size of the population, were much larger in 1982 than today.
[snip]
The recession of the early 1980s doesn’t have a catchy name, and almost half of Americans are too young to have any real memory of it. But it was terrible — qualitatively different from the mild recessions of 1990-91 and 2001. The first big blow to the economy was the 1979 revolution in, which sent oil prices skyrocketing. The bigger blow was a series of sharp interest-rate increases by the Federal Reserve, meant to snap inflation. Home sales plummeted. At their worst, they were 30 percent lower than they are even now (again, adjusted for population size). The industrial Midwest was hardest hit, and the term “Rust Belt” became ubiquitous. Many families fled south and west, helping to create the modern Sun Belt.
Nationwide, the unemployment rate rose above 10 percent in 1982, compared with 7.2 percent last month. But that rate has a couple of basic flaws, as I’ve discussed in previous columns. It counts people who have been forced to work part time, even though they want to work full time, as fully employed.
[snip]
(Excerpt) Read more at nytimes.com ...
I missed out on the 82 recession. I was floating around on CVN68. I was busy stuffing my bank account and contributing to the 2 for 1 GI bill. It paid for most of my college when I got out in 84...
People still blindly swallow this "Clinton Recovery" talk even though Clinton's unemployment peaked higher than our current level. Truly amazing. Clinton's 7.3 unemployment was a "recovery", while GW's 7.2 level is the worse economy since Genghis Khan.
I was still a kid when the ‘82 recession rolled around, but I do remember it well. My dad was out of work for the better part of a year, and my mom just barely held on to her job.
We were luckier than a lot of folks - both my parents had always been frugal, and mom knew how to feed a big family on a shoestring budget. Still, there were some very lean times until the Reagan recovery took hold.
“Sun is shinin’ in the sky
there ain’t a cloud in sight
It’s stopped rainin’
ev’rybody’s out there playin’
And don’t you know
it’s a beautiful new day
hey, hey!
As predictable as more taxes, the NYT get behind O big time!
Leave it to the NYT to start talking the economy up as soon as a Dem gets in the WH.
It won’t work this time. This crisis is nothing like the recession of 81-82 (yes, I lived through it also).
We are just in the beginning of this crisis...it is going to get much worse before it gets better. In 82, there was money available, only at a high interest rate. Inflation was the foe.
We are facing deflation and no money to loan today...a far worse threat. Obama hasn’t figured out yet that there is not enough government money to get us out of this...a severe contraction of the economy is unstopppable.
And don’t forget how Clinton got out just ahead of the next recession. Turns out he had been cooking the books and releasing downright fraudulent numbers to make sure Bush got the shaft.
One of the biggest to fall happened in fall 1982. Southern Industrial Banking Corp a S&L uninsured. People lost entire life savings. The other was United American Bank of Tennessee FDIC insured. The first ran by CH Butcher Jr the second by brother Jake Butcher. They cooked the books between the two institutes and dummy corporations. this was also the scandal Harold Ford Sr was linked to.
I'm very thankful the old GI Bill was in place and don't think it should have ever been changed. The vets today especially are not getting a fair deal. It didn't last forever. IIRC you had up 10 years from time of EAOS to claim benefits as far as schooling went.
......two East Tennessee brothers.....
You are much to kind. The Union County brothers were the head of the current democratic leadership and it was only by the grace of God that one was not governor. He hyped the fair, created a bubble of exuberant expectations.
I was dealing with a Florida vendor at the time and he wanted to come to the fair. He couldn’t find a hotel in Knoxville and got one in Pigeon Forge. Ha called me to ask “Where in the hell is Pigeon Forge Tennessee” :)
The S&L meltdown came later...after regulations were relaxed-the late 80’s and early 90’s. I was there, but if you were not...google is your friend.
No we're not. The only deflation we got is asset deflation and energy deflation. Consumer prices as a whole are still rising. OK, so nobody knows the future and you're saying it's bleak. Fine, but was there ever a time you've said it wasn't bleak?
Welcome, one and all, to the "communist states of obammica"!
Savings and Loan Associations
For decades, savings and loan associations, also known as S&L’s or thrifts, had been staples of the American economic landscape — solid if unexciting institutions whose major business was making mortgage loans within their community. But in what became known as the S&L crisis of the late 1980’s, hundreds of thrifts made a torrent of bad loans, ending in a government takeover and bailout that ultimately cost taxpayers over $120 billion.
In the 1960’s, the government capped the interest rates that thrifts could offer on their federally guaranteed accounts. When interest rates soared in the early 1980’s, the thrifts faced such difficulty in attracting money that the caps were removed. At the same time, some states relaxed the limits on the kinds of investments thrifts could make.
A new breed of aggressive S&L’s emerged, that attracted large pools of deposits by offering higher returns, and then used this cash to move into new lines of business, including junk bonds and real estate development.
Welcome, one and all, to the "communist states of obammica!"
Now...get to work....we have lots and lots of lazy people that you have to support!
The banks were a rock of stability in 1982 compared to today. Financial markets were “stone age” compared to today; “innovations” like CDOs didn’t exist. So while there was some turbulence due to foreclosures, the damage was localized and manageable. You didn’t have trillions in assets just disappearing into thin air. You also has Chrysler asking for a (small) bailout—you didn’t have a sizable percentage of the Fortune 500 asking for one.
When it went all volunteer, the pay got a little better. I have no complaints about the deal I got. I wasn't eligible for a Pell grant, because I saved too much. Should of blown it on fast cars and fast women..
Somehow "responsibly" followed by "meltdown" just doesn't make sense. It doesn't fit with post 27 either:
"..fall 1982. Southern Industrial Banking Corp a S&L uninsured. People lost entire life savings. The other was United American Bank of Tennessee FDIC insured. The first ran by CH Butcher Jr the second by brother Jake Butcher. They cooked the books between the two institutes and dummy corporations. this was also the scandal Harold Ford Sr was linked to."
LOL I have no liking for either. I'm in a short walking distance of Union County. But you are right about Jake especially. Had he not got caught? I don't think Clinton would have been POTUS. Someone was grooming him for politics. I never bought the rags to riches stort either. Pappy had a store or to and they opened an oil company. C&C Banks IIRC was the bank they first ran.
The Fair failed due to two major factors the first being location. That was the most stupid place in East Tennessee to have it. Right in the middle of a railroad track down in thwe bottom of a hollow in downtown Knoxville, and in a flood zone as well. The flood zone was a story in itself as they put the power panels to several Pavillions right on the bank of the creek. Several times me and the Electrician were in waders and had rubber gloves throwing the mains and getting out of there.
The second was pre-fair greed which led to bad pre-fair publicity. People were being fools and I don't just mean rich folk. People were converting carports into apartments they thought were going to rent for hundreds per night. The opening day with Reagan here was the largest crowd. The fair just to break even IIRC need about 50,000 visitors per day or 30,000 was a low number. Some days didn't see 15,000. 25,000 I think was about the average.
Then there was construction issues like the air conditioning system in the European Pavilion. Oh man that thing was botched worse than any job I have ever seen. I was the fairs only HVAC man directly employed by KIEE. The rest of the maintenance crew was generally on loan from UT. My job was to keep the chillers going. If one needed repair it was under warranty and I called the contractor. Not a bad job :>}.
I knew Butcher was going down in the summer of 1982. A guy I worked with wife worked at the bank auditors. He said it was fixing to come down hard. Of course all you had to do was look around Knoxville at empty Airstream campgrounds and the apartments in the FT Sanders area where greedy landlords tossed people to the streets to see what was coming down.
By the second week of the fair many motel rates had dropped to more normal pre-fair rates. that was when reality began to set in.
Back in the early 80’s, I got stuck with a very high interest home loan. Of course the house I had bought was not at a hyperinflated cost. The interest, while high, was tax deductable. I also remember netting over 10% interest on some longterm zero coupon bonds I had bought. I was able to refi some years later to a much lower interest rate.
The big difference I see today, is the shear numbers of people who are unbelievably upside down on their homes. I see far too many homes that are probabaly not going to go back up value to equal their mortgages any time soon.
Agricultural equipment manufacturing (Deere, Case, International-Harvester) took a big hit. We lost thousands of jobs. The people that lost the jobs did not stay. There was a mass exodus out of the Midwest.
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