On the other hand, maybe things really are bad

My last post discussed widespread economic pessimism and quoted a few people who think things aren't going so badly.

Today, Meteor Blades has an interesting post over at DailyKos that seems to support my gloomy outlook. She notes that the government has changed the way unemployment is measured, and that this complicates comparisons between the current recession and other downturns:

Most economists ridicule the idea that what we're experiencing now could ever become anything like the Great Depression. And, says Reuters, they all point to the same statistic: 25% of Americans were out of work in the worst of the 1930s and we're nowhere near that disaster.

But the definition of joblessness has changed since then. Not just in 1994, but also under Lyndon Johnson in the late 1960s, when discouraged workers out of job for more than a year were erased from the statistics. Out of work, out of luck, and out of sight.

A Reuters article from Thursday supports Meteor Blades' opinion:

Figures collected for Reuters by John Williams, from the electronic newsletter Shadowstats.com, suggest that, while we are not there yet, the comparison is not as outlandish as it might initially seem.

By his count, if unemployment were still tallied the way it was in the 1930s, today's jobless rate would be closer to 16.5 percent -- more than double the stated rate.

"I expect that unemployment in the current downturn, which will be particularly deep and protracted, eventually will rival, if not top, the 25 percent seen in the Great Depression," Williams said.

16.5 percent sounds a lot worse than the current, official mark of 7.2 percent. And for certain minority groups, particularly in urban areas, unemployment has remained high throughout the booms and recessions of the past couple decades.

In an editorial today, the NYT seems to think continued high unemployment is inevitable:

Even with a stimulus plan, unemployment will remain uncomfortably high in 2009, and even after it bottoms out, it is likely to revive slowly. That calls for not only extending unemployment benefits but expanding them, so that they cover more workers. Currently, less than half of jobless workers collect unemployment compensation.

Given that we're on our way to Depression-like unemployment levels, the Obama stimulus must put a dent in these numbers.