America Today: Reliving the Nightmare of the 1980s, Not the 1930s

Mark Perry at the American Enterprise Institute reins in the time-travelers who think we have to go back to the Great Depression to find economic times as relentlessly awful as today. Some perspective:

A Google News search shows that the phrase "since the 1930s" has been used 7,454 times in the last month, and the phrase "since the Great Depression" has been used almost 6,000 times in the last month, and most of these news references are comparisons of today's economic and financial conditions to the 1930s and the Great Depression. In contrast, the phrase "since the 1980s" has been used only 758 times in the last month.

….Compare for example some of the key economic variables today to the peaks for those variables in the early 1980s…

We are not even yet anywhere close to the economic conditions of that period. For example, the prime rate was more than six times higher in 1980 compared to today, core inflation in 1980 was six times higher than today, the unemployment rate in November and December of 1982 was more than a percentage point higher than the August 2009 rate, the 30-year mortgage rate in 1981 was almost four times higher than today's 5 percent, the car loan rate in 1981 was 2.5 times higher than today, and real gas prices were 32 percent more expensive in 1981 than today….

Perry goes on to, somewhat blithely I think, hint that we may be about to enjoy a period of unrestrained economic growth similar to the one that finished out the 1980s after that grim nadir of 1982. Still, as the assumption that quick, generous, and extensive government action, takeovers, and megaspending are needed to rescue us from Great Depression II dominates the policy debate, the reminder that we got out of a worse economic dilemma 27 years ago without such panicked reactions is helpful.