9 ms·

I'd recommend looking at the full PDF(make sure you zoom out or scroll horizontally as its very wide): https://fraser.stlouisfed.org/files/docs/publications/19

I'd recommend looking at the full PDF(make sure you zoom out or scroll horizontally as its very wide): https://fraser.stlouisfed.org/files/docs/publications/1943chart_busibooms.pdf?utm_source=direct_download https://fraser.stlouisfed.org/files/docs/publications/1943ch... Incredible visualization. Insane given they didn't have computer screens at the time. What stands out the most to me is that the 30s were really, really bad. Way worse than anything that came before.

rybosworld 2y ago
I also think it's interesting that the 2008 mortgage crisis was very close to becoming just as bad as the great depression, but fiscal policy prevented that. It's easiest to see this in side by side charts. The magnitude of stock market losses and economic data was tracking almost exactly with the great depression, until the central banks intervened. Global stock markets: https://cepr.org/sites/default/files/styles/flexible_wysiwyg/public/image/eichengreen_update_fig2.gif?itok=HYh4KxRY https://cepr.org/sites/default/files/styles/flexible_wysiwyg... U.S. Unemployment: https://obamawhitehouse.archives.gov/sites/whitehouse.gov/files/images/Furman5.jpg https://obamawhitehouse.archives.gov/sites/whitehouse.gov/fi... Global Industrial production: https://cepr.org/sites/default/files/styles/flexible_wysiwyg/public/image/FromMay2014/degrauwe24septfig1.png?itok=cxtWmj8i https://cepr.org/sites/default/files/styles/flexible_wysiwyg... We're still feeling ripple effects from 2008, but things aren't nearly as bas as they could have been.
- PheonixPharts 2y ago
  > but fiscal policy prevented that. That fiscal policy prevented collapse in 2008 by creating an unimaginably large asset bubble we're still living in. > We're still feeling ripple effects from 2008, but things aren't nearly as bas as they could have been. Those aren't ripple effects, it's the strain from an unsustainable "solution" to a crisis we still haven't really felt yet.
  - seuraughty 2y ago
    What would you have done differently than the treasury and fed did?
- MetricT 2y ago
  > I also think it's interesting that the 2008 mortgage crisis was very close to becoming just as bad as the great depression, but fiscal policy prevented that. Compare unemployment in the Great Depression vs Great Recession: https://i.imgur.com/pjyczeq.png https://i.imgur.com/pjyczeq.png Fiscal policy certainly did help, but the Great Recession probably would have still been significantly smaller than the Great Depression for several reasons. (I suspect the Great Recession is more analogous to the Long Depression of the late 19th century, in that both of them significantly worsened inequality, while the Great Depression reduced inequality. I suspect whenever the US starts dealing with its mountain of debt, the resulting recession/panic/depression will also reduce inequality, though I doubt too many people will be cheering that when it happens).
  - rybosworld 2y ago
    > Compare unemployment in the Great Depression vs Great Recession: The second chart I linked does exactly that. The point is to not look at the absolute numbers because, the unemployment trend in 2008 was reversed by fiscal policy, but during the great depression there was no such intervention. Until the central banks intervened, unemployment was tracking almost exactly with the great depression. You also can't compare the absolute unemployment numbers for a lot of other reasons. A major one is that unemployment (The U6 number, i.e. "real unemployment") in the first half of the century was consistently 10%+ higher than it is today. That's because of less women in the workforce. In 1929, the workforce was considered fully employed with an unemployment rate (U6) of 15%. In 2008, we considered a fully employed workforce to be just 5% unemployment.
OnlyMortal 2y ago
It was so bad, some arseholes started a war at the end of the decade.
- h0l0cube 2y ago
  The crippling reparations exacted on Germany were probably the greatest geopolitical miscalculation to date
  - riehwvfbk 2y ago
    Just wait, the work to surpass this miscalculation is already well underway.
    - h0l0cube 2y ago
      Curious to know what equivalence you’re making?
      - riehwvfbk 2y ago
        Oh I don't know, trying to make a country with twice the population, 50 times the area, and allied with a superpower a pariah state?
        RealityVoid 2y ago
        Yes, I say it's time to return to peace for our time.
        umeshunni 2y ago
        I'm still confused
        riehwvfbk 2y ago
        Hint: who (other than Trump) is most often compared to Hitler?
derbOac 2y ago
I kind of wish the scale would go out further into history; I'm not sure if something like that exists (maybe for someplace like England or China?). I also would like to see it replicated for different areas of the world, as well as how the trends correlate with one another over time. The period since the industrial revolution has been anomalous in many respects in terms of population dynamics and public health, and I imagine it would show up somehow in economic trends? On the other hand going back further in time I assume it becomes increasingly difficult to scale things on some common metric.
- mr_toad 2y ago
  There are just so few sources of economic data when you go back further.
  - dredmorbius 2y ago
    To the extent that there are, the work of Angus Maddison seems to be the most substantive, cited, and rigorous: <https://en.wikipedia.org/wiki/Angus_Maddison_statistics_of_the_ten_largest_economies_by_GDP_(PPP) https://en.wikipedia.org/wiki/Angus_Maddison_statistics_of_t...> <https://www.rug.nl/ggdc/historicaldevelopment/maddison/releases/maddison-project-database-2020 https://www.rug.nl/ggdc/historicaldevelopment/maddison/relea...>
- waveBidder 2y ago
  check out "Why the West Rules for Now", it's a historian's attempt at that
webnrrd2k 2y ago
The feature that stands out the most to me is that the black "boom or bust" line that shows prosperity/recession is effectively never at 100. It crosses the line (going up or down) a bunch of times, but is almost never on the line. I have to wonder if more balance with this would result in better outcomes, or worse. Also, and this is just an eyeball analysis from the pdf, the booms seem roughly balanced with the busts until the great depression. The prosperity of WWI seems to have set up the cycle of bust for the great depression.
- tim333 2y ago
  I'm trying to figure what the black "boom or bust" line actually is mathematically speaking. It looks a bit like they've run a regression on GDP and show the deviation above or below trend? Maybe it's in the text? Trying to figure it.
  - nonameiguess 2y ago
    It took me a few looks to figure this out, but out of all the various y axes on this chart, this appears to correspond to "business volume scale," which is exactly 0 on the flat line. The axis itself is found under the years 1845, 1895, and 1930. What "business volume scale" means or how it is measured, however, I don't see specified anywhere, and after an admittedly cursory web search plus FRASER search of 20 minutes or so, I can't figure it out. The text blurb for "business activity" seems to mean it is probably some aggregation of industrial production and consumer spending, but what 0 is indexed to and what the deviations mean is less clear.
- feedforward 2y ago
  The responses to your observation are hilarious. They'd have you think that the mass hiring by FAANG in 2021 and early 2022 followed by layoffs was a good thing. You accurately observe it as being screwy, which it is, but people are brainwashed into thinking it isn't - or is even a good thing.
- DenisM 2y ago
  Stability will beget over-confidence which will bring exuberance. If the system feeds on its own information it might be impossible to stabilize. And do you even want stability? The boom cycle produces exuberance that allows funding risky projects of which a small number become smashing success. The bust destroys the rest of risky project, which allows recycling of labor and resources. Arguably this is a better model for economic advancement, compared to a steady state where stagnating businesses continue to stagnate, hoarding resources in under-productive pursuits.

rybosworld 2y ago

I also think it's interesting that the 2008 mortgage crisis was very close to becoming just as bad as the great depression, but fiscal policy prevented that. It's easiest to see this in side by side charts. The magnitude of stock market losses and economic data was tracking almost exactly with the great depression, until the central banks intervened. Global stock markets: https://cepr.org/sites/default/files/styles/flexible_wysiwyg/public/image/eichengreen_update_fig2.gif?itok=HYh4KxRY https://cepr.org/sites/default/files/styles/flexible_wysiwyg... U.S. Unemployment: https://obamawhitehouse.archives.gov/sites/whitehouse.gov/files/images/Furman5.jpg https://obamawhitehouse.archives.gov/sites/whitehouse.gov/fi... Global Industrial production: https://cepr.org/sites/default/files/styles/flexible_wysiwyg/public/image/FromMay2014/degrauwe24septfig1.png?itok=cxtWmj8i https://cepr.org/sites/default/files/styles/flexible_wysiwyg... We're still feeling ripple effects from 2008, but things aren't nearly as bas as they could have been.

PheonixPharts 2y ago
> but fiscal policy prevented that. That fiscal policy prevented collapse in 2008 by creating an unimaginably large asset bubble we're still living in. > We're still feeling ripple effects from 2008, but things aren't nearly as bas as they could have been. Those aren't ripple effects, it's the strain from an unsustainable "solution" to a crisis we still haven't really felt yet.
- seuraughty 2y ago
  What would you have done differently than the treasury and fed did?
MetricT 2y ago
> I also think it's interesting that the 2008 mortgage crisis was very close to becoming just as bad as the great depression, but fiscal policy prevented that. Compare unemployment in the Great Depression vs Great Recession: https://i.imgur.com/pjyczeq.png https://i.imgur.com/pjyczeq.png Fiscal policy certainly did help, but the Great Recession probably would have still been significantly smaller than the Great Depression for several reasons. (I suspect the Great Recession is more analogous to the Long Depression of the late 19th century, in that both of them significantly worsened inequality, while the Great Depression reduced inequality. I suspect whenever the US starts dealing with its mountain of debt, the resulting recession/panic/depression will also reduce inequality, though I doubt too many people will be cheering that when it happens).
- rybosworld 2y ago
  > Compare unemployment in the Great Depression vs Great Recession: The second chart I linked does exactly that. The point is to not look at the absolute numbers because, the unemployment trend in 2008 was reversed by fiscal policy, but during the great depression there was no such intervention. Until the central banks intervened, unemployment was tracking almost exactly with the great depression. You also can't compare the absolute unemployment numbers for a lot of other reasons. A major one is that unemployment (The U6 number, i.e. "real unemployment") in the first half of the century was consistently 10%+ higher than it is today. That's because of less women in the workforce. In 1929, the workforce was considered fully employed with an unemployment rate (U6) of 15%. In 2008, we considered a fully employed workforce to be just 5% unemployment.

OnlyMortal 2y ago

It was so bad, some arseholes started a war at the end of the decade.

h0l0cube 2y ago
The crippling reparations exacted on Germany were probably the greatest geopolitical miscalculation to date
- riehwvfbk 2y ago
  Just wait, the work to surpass this miscalculation is already well underway.
  - h0l0cube 2y ago
    Curious to know what equivalence you’re making?
    - riehwvfbk 2y ago
      Oh I don't know, trying to make a country with twice the population, 50 times the area, and allied with a superpower a pariah state?
      - RealityVoid 2y ago
        Yes, I say it's time to return to peace for our time.
      - umeshunni 2y ago
        I'm still confused
        riehwvfbk 2y ago
        Hint: who (other than Trump) is most often compared to Hitler?

derbOac 2y ago

I kind of wish the scale would go out further into history; I'm not sure if something like that exists (maybe for someplace like England or China?). I also would like to see it replicated for different areas of the world, as well as how the trends correlate with one another over time. The period since the industrial revolution has been anomalous in many respects in terms of population dynamics and public health, and I imagine it would show up somehow in economic trends? On the other hand going back further in time I assume it becomes increasingly difficult to scale things on some common metric.

mr_toad 2y ago
There are just so few sources of economic data when you go back further.
- dredmorbius 2y ago
  To the extent that there are, the work of Angus Maddison seems to be the most substantive, cited, and rigorous: <https://en.wikipedia.org/wiki/Angus_Maddison_statistics_of_the_ten_largest_economies_by_GDP_(PPP) https://en.wikipedia.org/wiki/Angus_Maddison_statistics_of_t...> <https://www.rug.nl/ggdc/historicaldevelopment/maddison/releases/maddison-project-database-2020 https://www.rug.nl/ggdc/historicaldevelopment/maddison/relea...>
waveBidder 2y ago
check out "Why the West Rules for Now", it's a historian's attempt at that

webnrrd2k 2y ago

The feature that stands out the most to me is that the black "boom or bust" line that shows prosperity/recession is effectively never at 100. It crosses the line (going up or down) a bunch of times, but is almost never on the line. I have to wonder if more balance with this would result in better outcomes, or worse. Also, and this is just an eyeball analysis from the pdf, the booms seem roughly balanced with the busts until the great depression. The prosperity of WWI seems to have set up the cycle of bust for the great depression.

tim333 2y ago
I'm trying to figure what the black "boom or bust" line actually is mathematically speaking. It looks a bit like they've run a regression on GDP and show the deviation above or below trend? Maybe it's in the text? Trying to figure it.
- nonameiguess 2y ago
  It took me a few looks to figure this out, but out of all the various y axes on this chart, this appears to correspond to "business volume scale," which is exactly 0 on the flat line. The axis itself is found under the years 1845, 1895, and 1930. What "business volume scale" means or how it is measured, however, I don't see specified anywhere, and after an admittedly cursory web search plus FRASER search of 20 minutes or so, I can't figure it out. The text blurb for "business activity" seems to mean it is probably some aggregation of industrial production and consumer spending, but what 0 is indexed to and what the deviations mean is less clear.
feedforward 2y ago
The responses to your observation are hilarious. They'd have you think that the mass hiring by FAANG in 2021 and early 2022 followed by layoffs was a good thing. You accurately observe it as being screwy, which it is, but people are brainwashed into thinking it isn't - or is even a good thing.
DenisM 2y ago
Stability will beget over-confidence which will bring exuberance. If the system feeds on its own information it might be impossible to stabilize. And do you even want stability? The boom cycle produces exuberance that allows funding risky projects of which a small number become smashing success. The bust destroys the rest of risky project, which allows recycling of labor and resources. Arguably this is a better model for economic advancement, compared to a steady state where stagnating businesses continue to stagnate, hoarding resources in under-productive pursuits.