For all the talk of "green shoots", even the oxymoronic "jobless recovery" is almost certainly mythical, according to those with broader time horizons. For example, Martin Wolf, author of a mid-month (June 16) Financial Times article "The recession tracks the Great Depression". It begins:
Green shoots are bursting out. Or so we are told. But before concluding that the recession will soon be over, we must ask what history tells us. It is one of the guides we have to our present predicament. Fortunately, we do have the data. Unfortunately, the story they tell is an unhappy one.
Here's the four-part graph accompanying his article:
Wolf draws directly on the work of Barry Eichengreen and Kevin H. O'Rourke, whose June 4 article at Voxeu.org, "A Tale of Two Depressions", carried this into note:
This is an update of the authors' 6 April 2009 column comparing today's global crisis to the Great Depression. World industrial production, trade, and stock markets are diving faster now than during 1929-30. Fortunately, the policy response to date is much better. The update shows that trade and stock markets have shown some improvement without reversing the overall conclusion -- today's crisis is at least as bad as the Great Depression.
The problem, of course, is that no politicians are talking this frankly about how bad it is, and since they aren't talking frankly, they aren't laying the groundwork for continuing and expanding the sort of robust policy response that's needed.
