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by dragonwriter 1186 days ago
> But this time we have had governments causing unemployment to curb inflation.

That’s true of most recessions, because by definition a recession is the period after a business cycle peak, and the peak of business cycles is when inflationary pressures are high and monetary policy tends to be tight to constrain inflation. It is definitely not a difference between today the 2007-2009 Great Recession where interest rates were at 5.25 for an extended period leading into it to fight inflation, a much tighter than they are today significantly tighter than today, and for significantly longer.

And we’ve had nothing like the expansion-with-no-gains-for-the-bottom-95% of 2001-2007 leading up to today, which was a major source of the magnitude of the 2007-2009 Great Recession.
1 comments
bjourne 1186 days ago
As I remember it the job market was doing well up until investments banks began failing in mid 2008. That is not the case today. Many large companies have already announced major job cuts. Because governments have announced that interest rates will remain high to increase unemployment. The idea is that more unemployment means more poverty and with people too poor to pay high prices producers will have to lower their prices thus curing inflation. Or so the theory goes.
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dragonwriter 1186 days ago
> As I remember it the job market was doing well up until investments banks began failing in mid 2008

It was doing pretty similar to today in unemployment % terms until 2007, when that started getting worse too, with 6 years prior to that of declining incomes for virtually the entirety of the income distribution; if you call that “well”, then right now is doing great.

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bjourne 1185 days ago
According to this site, the US unemployment are was low at the beginning of 2008: https://fred.stlouisfed.org/series/UNRATE And according to this site, it was low in the EU region: https://www.dw.com/en/europes-unemployment-rate-hits-histori...
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dragonwriter 1185 days ago
> According to this site, the US unemployment are was low at the beginning of 2008

The local minimum of unemploymwnt before the 2007-2009 Great Recession waa 4.40%, reached several times between October 2006 and May 2007, with oscillations up to 4.5-4.6% in between. By the beginning of 2008 it was up to 5.0%. Yes, in general terms these are all “low”, but they are also all significantly higher than unemployment has recently been (last month it ticked up to 3.6% from 3.4%, that 3.4% tying the low reached in 1968-1969 and not seen in between.)

Saying that the “high” effective Fed Funds Rate of 4.58% is “causing unemployment” today with unemployment at 3.6% is somehow more true, and therefore distinguishing the current situation as worse, than, say, the 5.21%-5.28% effective rate over May 2007 causing unemployment when that was at 4.4% requires very slippery standards.

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