“Future Economic Historians” Will Probably Call the Period That Began In 2007 “the LONGEST DEPRESSION”

Sure, last year was the first pre-election year stock market loss since the Great Depression.  And admittedly, this week was the worst opening week of any year … EVER.

But that’s not the big news.

The big news is that a prominent economist – University of California economics prof Brad DeLong – wrote today:

Economist Joe Stiglitz warned back in 2010 that the world risked sliding into a “Great Malaise.” This week, he followed up on that grim prediction, saying, “We didn’t do what was needed, and we have ended up precisely where I feared we would.”


Joe Stiglitz is right.


In the aftermath of 2008, Stiglitz was indeed one of those warning that I and economists like me were wrong. Without extraordinary, sustained and aggressive policies to rebalance the economy, he said, we would never get back to what before 2008 we had thought was normal.

I was wrong. He was right.


Future economic historians may not call the period that began in 2007 the “Greatest Depression.” But as of now, it is highly and increasingly probable that they will call it the “Longest Depression.”

What’s he talking about? And how could we be in a depression when – until recently – the stock market has been soaring?

Well, the Fed intentionally created a stock market rally so that people would think that the economy was doing well. The wealthy have benefited, but everyone else has been left in the dirt.

But the real economy has been lying in a ditch on the side of the road since late 2007.

Indeed, the world’s most prestigious financial agency slammed the Fed before the 2008 crisis – and afterwards – for pursuing “bubbles, gimmicks and palliatives” instead of doing what was needed to stabilize the economy. So did the head of the World Bank … and many Fed officials.

Now, the Fed itself is starting to admit that all of its policies since 2008 may have been ineffective.

How Bad Is the Real Economy?

So how bad has the real economy been these last 7 years?

We noted in 2009 that more Americans will be unemployed than during the Great Depression.

We noted in 2010:

The following experts have – at some point during the last 2 years – said that the economic crisis could be worse than the Great Depression:

We explained in 2011 that many economists agree we’re in a depression … and they only argue about whether we’re facing the “Great” depression of the 1930s or the “Long” depression of the 1870s. We also noted that housing prices fell farther than during the Great Depression.

In 2012, we wrote:

We’ve repeatedly pointed out that there are many indicators which show that the last 5 years have been worse than the Great Depression of the 1930s, including:

***  Indeed, the number of Americans relying on government assistance to obtain basic food may be higher now that during the Great Depression.  The only reason we don’t see “soup lines” like we did in the 30s is because of the massive food stamp program.

We noted in 2013 that the British economy is worse than during the Great Depression, and more Americans are committing suicide than during the Great Depression.

We pointed out in 2014 that Europe is stuck in an economic malaise worse than a depression, that Americans fared better after the Great Depression than the 2008 crisis and that U.S. foreclosure rates are comparable to the Great Depression.

Last year, we noted that an important economic indicator – the velocity of money – has crashed far worse than during the Great Depression, and that the howling winds of deflation are hammering the U.S. just as much as Europe.

The Government Has Made It Worse

We’ve previously explained:  “We are stuck in a depression because the government has done all of the wrong things, and has failed to address the core problems.  For example:

The world’s most prestigious financial agency said that the government’s attempts to blow bubbles would just make things worse

  • The government is doing everything else wrong. See this and this

The bottom line is that we – and the wealth of our nation – have been looted. The great redistribution of wealth in history has created a depression.

Corrupt policy has caused medievalking-and-serf levels of inequality.  As we noted in 2011:

The 1% has caused a depression for the 99%.

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  • jadan

    and so, our 2-party system sends up two political solutions to this extraordinary situation: Trump vs Sanders. Clinton is just a garden variety lying weasel and doesn’t count. Political revolution is what is called for, deep systemic change. Is the catastrophe that waits in the wings an end or a new beginning?

    • diogenes

      “Two political solutions” that are two different versions of more of the same with superficial adjustments and the causes of our economic problems left intact.

  • diogenes

    The “Great Depression” of the 30s commenced in America in late 1929, although for the agricultural sector and for much of labor it commenced in 1922. In Europe the Great Depression was over by 1935. In America it didn’t reach its deepest trough until 1938, after nine years, and the economy had not truly recovered, was still significantly depressed, in December 1941. That’s how Roosevelt “saved capitalism.”

  • Chad

    Anyone dumb or corrupt enough to blame “global warming” on a “climate change” (Stiglitz)when right over their head is a Chemtrail blanket (sprayed 24/7/365) covering a hot earth, is someone that seriously deserves to have their credibility seriously doubted. My view is that he got the Nobel Prize similarly as Obama got the Peace Prize. Economics is a fraud – it is the study of how to make usury work, when it can’t work, never has worked, and is a major no-no in every single major religion (for a reason). Our entire society from the ground (education) up (sciences) is founded in, and based upon, usury. Our govt engines run on usury. Usury is the philosophy and practice of getting something of value for nearly nothing of value, endlessly – which on it’s face is an outright fraud. What it is, in actuality, is a short-term mechanism for a few to get just about everything of value, while in the long-term, leaving an entire land and people (and this time, earth) completely destitute, ravaged and plundered. There is no limit to mankind’s ignorance and arrogance, and this time around, this entire planet is finished. Already: Freedom is finished. Wholesome foods are finished. A peaceful and content way of life is finished. Clean air and water are finished. Integrity is finished. Wildlife and the oceans are finished from pole-to-pole. Privacy and private property are finished. The only thing left for people are duties, free sex, and choice in screen-based entertainments. And the herd moves onward and downward … Mooo.

    • jadan

      It’s optimistic to believe that there will be a future in which economists are able to coolly reflect on a past with which we remain connected in a continuum of shared experience. There will be a radical disconnect between now and any sustainable future we might be able to invent. Our Way of Life is so egregiously out of tune that it can’t be “reformed”. A political revolution has to happen that is so profound that one can’t stand in tomorrow and see the connection with today. Discontinuity. Catastrophe. If we emerge with memories in tact and do not blow ourselves up we will see the world of 2016 as a madhouse.

      • Chad

        Did you mean “not optimistic”? I’ve dedicated many decades nearly entirely to studying the fundamentals as near as I can get, but I am not a writer nor anything related to arts/literature/etc.

        1. All life is suffering on the whole. There are some good things about flesh-life, regardless of the type of creature, and humans do have it better than other animals for several reasons; nevertheless, we will always suffer when we don’t get what we want, when we get what we want and then learn we must lose it, when we suffer physical and emotional stress+pain, etc.

        2. We are deceived in many critical ways. What people regard as “advancement”, to anyone with wisdom, is really “as retarded as it gets”. Having materialistic values is as low as it gets. A truly advanced society has spiritual values, non-materialist values, an understanding that awareness/spirit exists independent of the material world, and is eternally bound to suffering BECAUSE OF material/sensory attachments. Truly, modern civilization is the best path to hell and distributed evil kamma ever instituted – and on a global scale at that.

        3. Civilization is a problem in itself: scientifically, genetically, it enables poor genetics to rapidly spread throughout the gene pool; genes leading toward evils, toward stupidity (Crabtree, Stanford), toward illness/defects/weaknesses; it is the captivity and domestication of man (research intelligent mammals in captivity). People that would normally be killed or never make it to reproductive ages thrive in civilizations, while those that would be held in high esteem in pre-techno-industrial societies become outcasts and dangerous (those with integrity, virtue, ideals of independence, freedom, and self-sufficiency, etc). There is no aspect of nature mankind manipulates for the better, including man himself. He touches a wolf, you get a dog, he touches a wildcat, you get a housecat, he touches plants, you get poison GMO, and trees+crops that can’t sustain themselves in nature, requiring unnatural amounts of care, water, fertilizer, pest control, etc.

        4. Stupid people think they are above average (scientific fact – can’t recall the name for this effect). People without integrity cannot know who has integrity and who does not. These are serious flaws within human nature.

        5. The best society is weakest (free, uncivilized, living in harmony with nature). But it is also the weakest. The worst society, overpopulated and governed, builds armies to plunder the best societies for needed resources. These are serious flaws with societies.

        6. Any abrupt change in modern society, especially economic, would result in the death of most people on earth. If modern banking fails, so does industry, and within a year, the planet would be instantly back in the agrarian age or earlier, and deindustrialized “family farms” certainly are not going to be feeding more than a minor fraction of the planet. There would be starvation and cannibalism on unimaginable scales. Therefore, my main guess on Chemtrails is (in addition to many other uses: energy weapon, toxin dispersement, etc) to heat up Alaska/Canada/Russia and possibly Antarctica to keep the growth+plunder going for another few centuries – regardless of killing most all wildlife/fish and plants on earth. Regardless of it only being a temporary fix.

        7. Any civilization will build hierarchies of systems (which is what a civilization is, actually), and they will always eventually have the power to be corrupt, and with certainty, will become corrupt.

        8. Humans have a breeding problem, and it never was or will be sustainable, and always causes suffering of one kind or another. But big religions love it, because the suffering of poverty funds and supports them. Bankers/govt/corps love it, because they need more taxpayers+consumers to keep usury alive. Industrialists love it because they need the desperation that creates slave labor. Militaries love it because they know how to make use of, essentially, useless paupers. Many people love it because they love to spread their seed, caring little about the lives from those seeds past the age of 18. This is a serious problem with humanity: Humans have no concern with child-sacrifice on the altars of systems of men.

        9. Anyone with the power to make rules can a) be used as a scapegoat for the irresponsibility and ignorance of the people themselves, and b) can and will make rules to benefit his own class+associates. The only blame-free society with integrity is a free and independent society, the free-market without capitalism (see Bastiat’s “The Law”). It’s never sustainable.

        That’s off the top of my head, and there’s probably some critical things not in the list due to time/space constraints. These are all serious problems in re-thinking future directions. Personally, if I was king/dictator, the most effective and realistic proposal I would implement would be a tattoo dot on the bottom of the big toe at each birthing, and tubes tied on the 3rd; and anyone in charge of any delivery not complying, 20 years in prison. And zero immigration/visitation from any country where this is not demonstratably enacted. Then I would just let things sort themselves out in a the somewhat gentle and slow fashion as population growth levels off, and hopefully decrease, and the population gradually becomes more free, independent, self-sufficient, agrarian, responsible, virtuous, etc. Lives more generally associated with nature, lives more and more in accord with the Organic Laws for the USA (and if you don’t know what they are and what they state, you should find out!)

  • January 7th, 2016 The Whole Thing is About To Come Unhinged: 6 Ways To Prepare For the Next Collapse

    Since the last great recession of 2008, economic forecasters and preppers alike have warned of the bottom dropping out of the economy. The proverbial doom prediction of “it’s not if, but when” was used for years as a call to action to get ready for a much larger economic disaster.


  • Bruce

    That Would BE, Grate Obamalaise!

  • h1b_go_home

    You have managed to completely ignore the foreign work visa programs that allow the flooding of low wage foreigners onto the labor market and tie their visas to the employers who hire them. This depression actually started in 2001 when the H-1b visa caps were moved from 65.000/year (lasting for six years) to 285,000 per year (lasting for six years). There is no actual limit in these visas, because H-1b visa workers at the colleges do not count toward the total. These foreign work visas allowed the export of entire industries off shore. This combined with the ‘free trade’ agreements raped our industries and middle class. I know, because I was out of work from October, 2001 through December, 2003 and because I was a contract worker, I was not eligible for unemployment. The housing bubble was an attempt by the Federal Reserve to prop up the economy by allowing homeowners to mortgage their homes while the economy continued to sink. The cheap foreign worker visas were a tool the Federal Reserve and Congress used to control inflation in the face of more and more debt being thrown into the system.