Obamacare

Reason.tv: Where are the Jobs? The Parallels between Today and the Great Depression

|

The Great Recession officially ended way back in June of 2009, so why are so many Americans still out of work?

It's not because politicians were twiddling their thumbs. Indeed, from from bailouts to "Cash for Clunkers" to the massive stimulus plan, government has busied itself with trying to fix the economy. And, according to President Obama, this "bold, persistent, experimentation" has brought our country back from the brink.

Obama borrows that phrase from President Franklin Rooselvelt, and today's president has a lot in common with the original bold, persistent, experimenter. Like Obama, FDR was a charismatic Democrat who replaced an unpopular Republican during a time of crisis. And like Obama, FDR championed a slew of policies designed to get America back to work.

Today many Americans credit FDR with rescuing our nation from the Great Depression, but there's plenty wrong with that view, says Lee Ohanian, a UCLA economics professor who specializes in economic crisis. "What's wrong with that view is that private-sector job growth did not come back under Roosevelt," says Ohanian, who notes that Americans often forget how long the Great Depression lasted. Unemployment stood at 17 percent in 1939, a decade after the infamous stock market crash, and, although times were much worse back then, Ohanian sees troubling parallels between the Great Depression and the Great Recession. In both instances our nation emerged from a severe downturn with strong productivity growth and the banking system largely restored. We were poised for a recovery, but didn't get one. "So the key puzzle for both today and the 1930s is why aren't private-sector jobs being created at a much more rapid rate?"

Uncertainty may have something to do with it. "Uncertainty is an enemy of job creation," says Ohanian. "Because in a world with a lot of uncertainty there's a tendency to 'wait and see.'" Our nation's job creators wait and see what Washington's next experiment will be.

CEO Joanne Garneau has spent a year waiting for the Federal Trade Commission to announce a new regulation that will determine whether her company hires more employees or even stays in business. It's just one regulation, a tiny one by Washington standards. How will businesses end up being affected by ObamaCare or the 2,300-page financial overhaul? What if taxes go up? Today, like the 1930s, uncertainty reigns.

According to research conducted by Ohanian and fellow UCLA economist Harold L. Cole, FDR's anti-market policies actually prolonged the Great Depression by seven years . And what about Obama's policies? When the unemployment rate finally does improve will he receive credit for rescuing America from the Great Recession or blame for prolonging the crisis?

Approximately 6.40 minutes.

"Where are the Jobs? The Parallels between Today and the Great Depression" is written and produced by Ted Balaker. Field Producers: Paul Detrick and Zach Weissmueller; Production Associate: Sam Corcos.

Go to Reason.tv for HD, iPod, and audio versions of this and all our videos, and subscribe to Reason.tv's YouTube channel to receive automatic notification when new content is posted.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

67 responses to “Reason.tv: Where are the Jobs? The Parallels between Today and the Great Depression

  1. “So the key puzzle for both today and the 1930s is why aren’t private-sector jobs being created at a much more rapid rate?”

    Because greedy business owners are keeping the money rather than hiring workers. We fixed that with an excess profits tax.

    1. The excess profits tax was passed in 1939 and the recovery occurred in 1946 when the Republican took Congress. I guess those greedy business owners had nothing to do with winning the war, eh ? Unemployment went away after 1940 when 14 million men went into the military. It came back in 1946 until the GOP could get the economy going again. That was the great bull market until 1966 when LBJ killed it.

  2. When the unemployment rate finally does improve will he receive credit for rescuing America from the Great Recession or blame for prolonging the crisis?

    The myth of FDR saving us from the great depression would not survive the internet if it happened today. So yes Obama will attempt to claim credit but will not receive much of it.

  3. why aren’t private-sector jobs being created at a much more rapid rate?

    “Why I’m Not Hiring.”

  4. I think the answer is obvious to anyone who has eyes. Our little pissant wars, with no draft, are not providing the stimulus we need. A big war is needed. China is ripe for the picking. I’m not saying we wouldn’t get our hair mussed. But I think we can get away with it with 10-20 million dead, tops. Depending on the breaks.

    1. Are you saying there should be a “super war”? Against Norway, maybe?

      1. God damned herring eaters. They’re not even human if you ask me.

        1. Plus, they have oil. Somebody told me that that is why we have wars.

      2. Olivia Wilde is hot!!! But, who was it on Redeye that pointed out her entire family of marxist idiots? Alexander Cockburn for god’s sake.

        1. Seriously? You actually find this attractive?

          http://1.bp.blogspot.com/_V3je…..wilde1.jpg

          http://www.infamouskidd.com/wp…..-wilde.jpg

          Whoa!

        2. Let’s get that draft going again. No exemptions: legal and illegal immigrants; rich; poor; women; LGBTs; students; senior citizens; Sasha; senators’ sons; Michelle and Malia; all fit for front-line, war-on-terror, cannon-fodder duty. CoC Obama could ram it through by executive order. (Politicians themselves would be exempt, of course.)

      3. Can’t we just beat up on the Canadians instead? Then we don’t have to go overseas.

        1. I say we invade Mexico. What’s Spanish for “The Other Race”?

          1. Guatamalteco? Don’t shoot me for that.

          2. We might have to in a couple of years. The Mexican government is about as stable as the one in Iraq.

        2. How about invading California. Californians are definitely subhuman, and should be punished severely.

          1. Are you sure that’s wise? They’d surrender and the U.S. would – as its post-WWII tradition dictates – lavish billions on the defeated enemy.

    2. You can’t fight in here! This is the war room!

      1. He was trying to take pictures of the big board!

        1. He’ll see everything!

    3. Why do we need to involve China? I like China…they send me cool stuff and all i do is send them pieces of paper with the faces of dead white dudes printed on them.

      The Dems wanted to start a draft not so long ago because only volunteers and contractors were fighting in Iraq and Afghanistan….not enough rich people’s sons were dying i guess…why not call up a draft and send a million 18 years-olds to Middle-Asia?

      1. When the Chinese start using the dead white dude pictures for toilet paper, they might want to come over here and take their cool stuff back. Preemptive strike.
        On the other hand, Epi has a point. Overseas travel is a headache.

        1. You will have to pry my PS3 from my cold dead hands!!!

          1. They will keep that in mind.

    4. How about a fake war? But a green war, where we beat China in electric cars, windmills, solar panels, and robotic unicorns. We just need a little ole carbon tax. We could blow up incandescent light bulb factories on the Chinese New Year to kick things off.

  5. When the unemployment rate finally does improve will he receive credit for rescuing America from the Great Recession or blame for prolonging the crisis?

    If the jobless rate is still hovering near 10% in two years, Obama will likely be toast and not be around to claim credit for the recovery.

    If Obama had the economic sense of a gnat, he’d be pushing for repealing the job-killing minimum wage or at least rolling it back, among other things that Ds don’t do.

    1. If the jobless rate is still hovering near 10% in two years

      job recovery will start nov 3rd.

      A republican congress is a huge check against the uncertainty Obama has created. It is also a matter of the quality of the uncertainty. Sure we ill not know what the republicans will do but we do know it will not get worse…no more Obamacare type legislation. We might get Bush tax cuts extended we might not…but we will not be getting new taxes.

      The quality of the uncertainty will change Nov 3rd…and that will make all the difference in the world.

      1. This is true. Already stocks are going up as it’s pretty clear that a Republican House is a lock.

        1. And yes I know the Dow closed down 12.33 today.

      2. I’m not so sure the Republican Congress will really help. Look at all the stupid things the Repubicans did under Bush. Also, the U.S. is bankrupt. No chance those 1.5 trillion dollar deficits are going anywhere, regardless of who controls the government.

        1. Yeah, but a Republican Congress will be much more contrarian with a Democrat in the White House…

    2. If Obama had the economic sense of a gnat…

      He’d argue for tax increases.

      Just like Hoover did in 31.

  6. Shorter: what makes you think things will improve under Obama when he’s doing his best to screw things up?

  7. So yes Obama will attempt to claim credit but will not receive much of it.

    He might not get credit from voters or internet cranks, but history is written by bootlickers. The temporally nearest f?hrer-figure gets eternal credit for anything good that happens?and they’ll make good shit up if they have to. Generations will be menaced by the myth of Obama’s greatness.

    Even an apocalyptic erasure of humanity’s memory can’t spare them. There are fucking giant Obama heads all over the place. They’ll un-bury them and worship them.

    GAME OVER, MAN

    1. but history is written by bootlickers.

      I am wondering how history will be written in the internet and post-internet age.

      I have no way of knowing but I suspect history about today will be a bit different in its presentation and content 60 years from now then the books we read in School.

      I also suspect it will be harder to flat out lie about it.

      1. I have to agree with cent-sign on this. We’ve already seen the level of adoration and bootlicking Obama can generate; when his failures fade after he leaves office, the impulse by many to glowingly describe the tenure of “hope & change” will be overwhelming. As he said–they’ll make shit up if they have to.

        1. Can you imagine Parallel Lives written by Ariana Huffington?

          1. No, but Plutarch was a pretty big bootlicker in his own right.

        2. they’ll make shit up if they have to

          They always have to, and they always do.

      2. I suspect it will be much easier to lie in 60 years. How much of the digital archive will still exist then of all of the blogs and online articles that previously would have been in hard copy?

        And yes, historians,as a group, tend to be leftist bootlickers. The Obama will be revered by future generations a the brave soul who saved us all from the Tea Party Reich.

        1. I would historians are more generally statist boot lickers than specifically leftist. That is why the lists of “great” historical figures always include a bunch of evil bastards. Those evil bastards did big things and moved a lot of stuff around, which is, in one sense of the word, great.

          1. Yes, while their general preference is for left wing causes, historians tend to judge presidential greatnes by whether the person increased the power of the givernment es[ecially the office of president. By the logic I’ve heard historions themselves use, the greatest president wil be the one who declres himself Dictator for Life and makes it stick.

        2. How much of the digital archive will still exist then of all of the blogs and online articles that previously would have been in hard copy?

          More then the hard copy that survives today from 60 years ago….and from more view points.

          I hate to break it to you but the cost of archiving information is dropping like a truck off the empire states building. and that is because of digital technology.

          The idea that digital information is short for this world is a myth.

          If you do not believe me then go try and delete an email from any medium sized organization.

  8. When the great depression started my grandmother gave handjobs in alleys for food.
    I learned from her errors, and began the same practice well before the economic downturn…

    1. I really like this.

  9. My sympathies to those out of work and still looking, but I’m getting tired of this national, political obsession w/ jobs and job creation as if it were the independent variable that can just be increased at will by the gov. Reminds me of the line from John Wayne’s movie “McLintock!”, when a young guys asks to be given a job, “you got it all wrong, I don’t give jobs, I hire men”
    Wish the govt would stop giving jobs and get out of the way for industry to hire men (and women). Or creating the demand instead of the supply.

    1. It’s a good point. Somebody here pointed out the other day that jobs are just a side effect, something that happens when a person or company can’t handle the amount of business they have with the people on hand.

  10. Dey tuk errrr joooobs!

    1. TRUCKNUTZ.

  11. In other news, due to this failing economy, date rapes are on the decline. Although, regular rapes have sky-rocketed.

    1. If that includes what the gov is doing to us, we have a record.

  12. Barack Obama: The Experimenter-in-Chief.

  13. I’d like to see a comparison between Obama and Richard Nixon, both in military policy and in how they tried to use the governemtn to fix the economy.

    “There were several who suggested FDR was wrong to intervine back in the new deal; they’re fighting battles that I thought were resolved a very long time ago.” Indeed I thought the 1970’s proved FDR was wrong just as much as the 1930’s and the 1990’s proved Reagan was right.

  14. Uncertainty may have something to do with it. “Uncertainty is an enemy of job creation,” says Ohanian. “Because in a world with a lot of uncertainty there’s a tendency to ‘wait and see.'” Our nation’s job creators wait and see what Washington’s next experiment will be.

    Ain’t the state of things cloudy enough? Don’t we face enough fucking imponderables?

  15. Uncertainty may have something to do with it. “Uncertainty is an enemy of job creation,” says Ohanian. “Because in a world with a lot of uncertainty there’s a tendency to ‘wait and see.'” Our nation’s job creators wait and see what Washington’s next experiment will be.

    Ain’t the state of things cloudy enough? Don’t we face enough fucking imponderables?

  16. I don’t know if I’d start comparing what’s going on now to the Great Depression just yet. Check back with me when stock traders who lost everything start killing their entire families before killing themselves. There seemed to be quite a bit of that back in 1929.

    1. Now the get gubmint checks.

  17. “why aren’t private-sector jobs being created at a much more rapid rate?…Because in a world with a lot of uncertainty there’s a tendency to ‘wait and see.'”

    BS. American voters have made America a bad risk. Over 1/2 of the sales and earnings of the S&P 500 corporations now originate from outside the U.S. The trickle of fleeing capital will become a flood soon enough.

  18. I think the only thing that is going to save this country economically is the free market. You see innovative small and large businesses come out every day that solve problems or entertain people. One of my friends came up with this business the other day, http://tagmyphone.com/ I thought it was a unique idea that showcased American ingenuity. Obama definitely has no answer for solving this crisis and shoveling money down a federal black hole is not the answer. Stepping back, letting bad businesses fail, and allowing business to operate is what will give people jobs. It’s too bad that this isn’t what we’re going to get and the economy will be stagnant for a long time because of government interference.

  19. Look at Merkel’s Germany, the only developed country which was not “stimulated”. It’s unemployment rate is lower than before the recession, the lowest in 30+ years.

    Everyone except Obama and Krugman knows where the money is coming from to “stimulate” the economy.

  20. If we counted unemployment the same way now as during the Great Depression, we’d be at 17%. Then: out of a job. For the last 50 years or so: out of a job but actively looking.

  21. TO THE WEAK-KNEED REPUBLICANS AND DEMOCRAT?..TO ALL THE COMMUNIST IN THE IG,FBI,CIA,AND U.S. Senators and the left wing media outlets?..Wake up america!!!! This goverment is the most corrupt we have had in years. The good old boy network is very much in charge.Mr. obama and pelosi are the puppet masters.How many of their good friends benefited by the agreement ” what a farce. All of the u.sSenators voted for this. I am ashamed to say I voted for the these corupted self serving politicians.With good reason they picked an out of towner to be president.All u.s departments need an overhaul. We need to rid ourselves of the puppet masters and the dept heads that bow down to obama and pelosi.I am sick of the lip service I have been getting from these dummies over violations, their friends are getting away with.in the goverment . Barack Hussein Obama , threatens friends and bows to Mmslim.
    INPEACH OBAMA ,GOD OPEN YOUR EYES.///For us there are only two possiblities: either we remain american or we come under the thumb of the communist Mmslim Barack Hussein OBAMA. This latter must not occur.THE COMMANDER.

  22. I love communist obama.will you ,thank you,the commander.ps aka red ink obama

  23. I look forward to reading what you’re planning on next, because your blog is a nice read, you’re writing with passion ugg australia .

  24. happy to join your community, there are many useful and interesting information 192.168.1.254

Please to post comments

Comments are closed.