Correct, Geoff.  Banks weren't failing in the 70s, certainly not at the rate we are seeing them fail today.  There were no huge bailouts on the order of $700 billion.  That is where the 70s recession pales in comparison to what we see today.

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And that's a good point. The banks weren't as unstable during the 1970s as they seemingly are right now. Very true.

But in terms of the prices you and I pay for consumer goods (inflation) and the availability of jobs (unemployment), things were worse in the '70s. Those are the economic indicators that most directly impact the average American, I would think, and that's why I'm not ready to say the current crisis is as bad.

I mean, it stinks that my 401(k) went in the toilet. But it would be much worse if I found myself out of a job or unable to pay the grocery bill because of rapidly rising costs.

But again, we don't know how bad things are going to get. Saying, "We're better off/worse off than we were in the mid-70s" isn't exactly a ringing endorsement of economic health. I hope this thing gets turned around soon.

But again, we don't know how bad things are going to get. Saying, "We're better off/worse off than we were in the mid-70s" isn't exactly a ringing endorsement of economic health. I hope this thing gets turned around soon.

I think I heard this morning that analysts expect unemployment to reach 7.5-8% by the end of the first quarter of 2009.  The forclosure crisis was also not present in the 1970's.  As for inflation, well I think interest rates from the fed in the 1970s were around 13% (or higher) compared with the 1.5% (or thereabouts) today.  So thats offset inflation.  Now analysist are concerned (but not yet worried) about deflation.

Shit all this economics makes my head hurt!

 I think if the Big Three go through Bankruptcy, and reorganize (and a big part of that reorganization is removing the weight of the UAW contract or at least making it less onerous) the if assistance is need to help them it should be considered. 

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Interesting note on the economic woes of the "Big Three" auto makers. I recently read that Toyota is going full steam ahead on a new $1.3 billion plant in northern Mississippi to build hybrid cars. Apparently, Toyota can't build the hybrids fast enough to meet the demand.

Thats why I supported bailing out the credit markets.  I DO NOT support bailing out the Big Three at this point.  We have bankruptcy laws for a reason.  One of them is so companies can reorganize and repair themselves.  I think if the Big Three go through Bankruptcy, and reorganize (and a big part of that reorganization is removing the weight of the UAW contract or at least making it less onerous) the if assistance is need to help them it should be considered. 

Besides anyone who flies to congress in a private jet to ask for a handout to run their business is too fucking stupid to be allowed to keep the keys to the factory.

I don't see how blaming the union is right, those in the white shirts did not look at the Japanese and learn from their successes. They made smaller, cheaper fuel saving cars while we made SUV's and big wheeled extended cab trucks.

I agree on making the auto industry straighten itself up, but believe me if they fail we will see a depression. We cannot let them go away.

Bruce Buchanan wrote: But it would be much worse if I found myself out of a job or unable to pay the grocery bill because of rapidly rising costs.

But that's you, Bruce.  It's already happening to a good number of people all across the country.  Just because you're not currently experiencing it doesn't mean that it's not happening.  Sure, there will always be someone who can't afford the price of goods and services who are also out of work, but this is much worse than the norm.  Thank god gas prices dropped so quickly, much to the disappointment of OPEC, otherwise there would have been many people who couldn't afford to drive themselves to work.  I'm sure that also wasn't a consideration for you as it wasn't for me, but it was for millions.

I for one believe we shouldn't have even bailed out credit markets. Wall Street (and their ilk) pushed the boundaries and played the markets for every penny thatit was worth. When it collapsed, they go looking for help? Being too big to fail? They want a free economy without government restraints in place? Then they shoudld expect to spiral and die when that ecomony abandons them as well. It's bad, but then that's what happens. When the market corrects itself, maybe the new players will be wiser for it

couldn't agree more

I don't see how blaming the union is right

Before the first dollar of engineering, materials or actual labor (e.g. the guys and gals building the cars) is spent, the Big Three are $2000 in the hole for union and pension benefits.  Thats $2000 that Toyota does not have to spend -- because they don't have those union obligations. 

I don't blame the Union alone (though they do bear a large burden).  Executive compensation is completely out of whack (and not just in the Auto Industry) and the Big Three need to address issues like fuel efficency and the like.  But I really agree (to my shock) with the editorial by Mitt Romney I linked the other day.

But that's you, Bruce.  It's already happening to a good number of people all across the country

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I know!  I'm just saying that, percentage-wise, there are fewer people in that boat than there were during the 1970s economic crisis.

(I was still on that point; maybe I need to catch up.)

I for one believe we shouldn't have even bailed out credit markets. Wall Street (and their ilk) pushed the boundaries and played the markets for every penny thatit was worth. When it collapsed, they go looking for help? Being too big to fail? They want a free economy without government restraints in place? Then they shoudld expect to spiral and die when that ecomony abandons them as well. It's bad, but then that's what happens. When the market corrects itself, maybe the new players will be wiser for it

I understand that rational and in many, many ways I agree with it but I think the trickle down effect of an unstable credit market would have been catastrophic.  Look at the number of stores that are going belly up -- Linens & Things, Circuit City -- there is little question in my mind that these companies plights were hastened by the poor credit markets (in additton to poor management).  The risk of the effect on main street of a collapse of the credit markets would have resulted in runs on banks and even more foreclosures.  I hated it but I thought the bailout was necessary.

I don't blame the Union alone (though they do bear a large burden).  Executive compensation is completely out of whack (and not just in the Auto Industry) and the Big Three need to address issues like fuel efficency and the like.  But I really agree (to my shock) with the editorial by Mitt Romney I linked the other day.

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I agree with Geoff on this. Obviously, the UAW isn't solely to blame. But they have created conditions that put the Big Three at  a tremendous economic disadvantage compared to their competitors.

I don't begrudge the right of a Detroit autoworker to make as much money and do as well as he or she can. But some of these union contracts are just way out of whack with what the market will bear.

Take Toyota as an example, since they are doing better than any other car manufacturer in the country. They've built five plants in the U.S. (with #6) on the way. But all are in non-union states. The workers at these non-union plants aren't exactly being paid peanuts (on the contrary, these are good jobs), but Toyota isn't locked into an overly burdensome union contract.

Sure, Toyota also has made smart moves, like investing heavily in the hybrid technology. But I don't think their lack of unionization is coincidental to their prosperity.

QUOTE: Besides anyone who flies to congress in a private jet to ask for a handout to run their business is too fucking stupid to be allowed to keep the keys to the factory.

Ford's basically tried to shrug this off by pointing out that it's part of their CEO's contract that he (and his wife) only travel via private jet.

Um...'scuse me?  That's supposed to make me understand that contradiction better?  "Well...he's s'posed to."  is supposed to show better leadership than saying, "OK, I know it's part of my contract, but c'mon.  We're bleeding money, so it'll probably be better for my trip to cost $800 round trip if I even fly first class, as opposed to spending $20,000 for the flight."

Meanwhile, GM's CEO used the excuse to ABC news that he had other meetings in Washington that morning, so that's why he needed to use the private jet.  Great.  Fly out the night before.  Even with an extra night at the hotel, it'll still be cheaper than the private flight.