“This recession might be the deepest recession since the Great Depression.”
These words were spoken by economics professor Wayne Carroll at a “Let’s Do Lunch” alumni lecture on April 29. The discussion, titled “The Great Recession of 2008-09: Starting to Build the Historical Perspective,” was one of a monthly series put together by alumni director John Bachmaier.
“This recession is 17 months old,” Carroll said. “That already makes this the longest recession since the Great Depression. . What we know is that we’ve got almost a 2 percent drop in real GDP in the last couple of quarters, and that’s substantial, that’s significant.”
During his lecture, Carroll focused on comparisons between the current recession and ones in the past. There isn’t much good data from the Great Depression, he said, so it’s hard to compare what’s happening now with what happened then. But he did look at statistics from some more recent recessions, especially those of 1974-1975 and 1981-1982.
The evidence, he said, seems to support the idea that this is the worst the economy’s been since the time of the Great Depression.
“We have a bigger dip in total employment in this recession already than we have ever had in those two previous, bad recessions,” he said. “. We’ll have to see just how bad it gets.”
Many economists are saying the economy will start growing again in the third quarter of 2009, Carroll said. He, however, isn’t so sure.
“I, myself, I’m a little skeptical about that,” he said. “I’m wondering if that’s too optimistic.” One of the reasons for that, he said, was that it’s a global recession, as others have not been, so the U.S. cannot look to help from other countries.
Carroll said there’s hope even though he does not think the economy’s going to start growing in the third quarter of 2009.
“I bet the recovery’s going to come after that. And I’d be willing to wager that the unemployment rate is going to keep rising until it passes our post-war record of 10.8 percent,” he said. “I think that we’ve got some pain ahead.”
However, Carroll doesn’t feel the situation is hopeless.
“The Federal Reserve System is doing spectacular stuff to try to rescue the economy,” he said. “They’re doing just the opposite of what happened in the Great Depression. . It seems that Obama and (Federal Reserve Chairman) Bernanke have learned the lessons from history; they can see that this is a historic recession, and they are taking really historic steps to do something about the recession.”
Bachmaier tries to match up hot topics for the “Let’s Do Lunch” series, he said, and thought the economy was something that would draw a lot of interest. Next month’s topic will be sustainability.
Alumna Jane Larson thought there was a very good turnout for Carroll’s presentation.
“I thought it was excellent,” she said. “. It’s something I don’t want to see happen, but it’s very interesting to see.”
Those interested can find a copy of Carroll’s PowerPoint here.
