Unemployment – Isn’t That Special?

New unemployment data was released recently. This graph from the Calculated Risk Blog is uncommonly informative. And, yes, unemployment is special, if by special you mean extreme.

Job Losses

Job Losses

Click on the graph to get a larger version. The graph shows unemployment as a percentage below the previous employment peak over time. You can see that the current unemployment recession is more severe in depth and duration than any since World War II. If we take into account those that have stopped looking for work and those working reduced hours, we may be looking at something on par, if not equivalent to the Great Depression.

How can this be? The Obama administration informs us that the reason is they’ve inherited an unprecedented economic problem. But no hypothesis has been offered as to why this recession should be more severe than any other.

On the other hand, free market and supply side economists have a simple explanation: Keynesian doesn’t work and never, ever has worked to end recessions. In fact, FDRs adoption of the same principles practiced by Obama yielded a similar result – a prolonged economic disaster. We can only hope to change course before we break the unemployment records set by FDR’s  Great Depression.

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