Today’s Recession is Already Far Worse than 1982

[marmar]

from OurFuture.org:



Today’s Recession is Already Far Worse than 1982
By Charles McMillion

February 27th, 2009 - 11:12am ET


Today’s Bureau of Economic Analysis report that real gross domestic product plunged at an annual rate of 6.2 percent in the fourth quarter of 2008 is being compared with the 6.4 percent plunge in the first quarter of 1982, the worst of the severe 1981-’82 Reagan recession.

In many ways these two miserable quarters are bookends of an anything-goes political era of “free” market deregulation and cost-cutting at any price. But it is important to keep these two quarters of sharp economic decline in the context of larger economic forces.

The Dow Jones Industrial average lost 6.0 percent in the first quarter of 1982 but lost 19.1 percent in the fourth quarter of 2008. Home values continued to rise rapidly in the first quarter of 1982 but plunged in the fourth quarter of 2008. As a result, the net worth of households continued its decades-long rise in the first quarter of 1982 but household net worth plunged in the fourth quarter of 2008 for the fifth consecutive quarter. (The Federal Reserve reports on March 12 will show exactly how severe was the fourth quarter of 2008 plunge in household net worth.)

And, of course, these household net worth data are aggregate data—including the households of bailed-out Wall Street geniuses as well as the households of unemployed former Circuit City workers. Because household net worth and incomes have become far more polarized since 1982, the actual effect on most households of recent developments is far more severe than the aggregate data might suggest. .........(more)

The complete piece is at: http://www.ourfuture.org/blog-entry/2009020927/today-s-recession-already-far-worse-1982

[Tashca]

1. I bought my first home in 1982

I was 25 and didn't know shit......thought I did though. Sold that house in 1985 for less than I paid for it by about 5%. Bought again in 1987 at the bottom and houses have risen ever since. I think we got hit harder in the early 80s recession than most the rest of the country. This article talks about housing prices rising ever since then. Here we had at least 5 years of down and flat market before it rose again. You could not buy a house with less than 20% down either. I paid 14% interest for a short time then it went down to 11%. No question there is no comparison in the housing market decline then and now.....now is a freaking disaster.