The current recession in context

The ultra-bearish are frequently claiming that another Great Depression is right around the corner. Many of the most pessimistic economic commentators have almost gleefully been comparing the current recession to the Great Depression. To give readers a sense of how not bad the current recession is, here is the decline in GDP of several major recessions vs. the Great Depression:

I have occasionally compared the current recession to the early 1980s recession (1981-1982), arguing that the early 1980s recession was worse. The graph above makes the current one look worse. However, the graph above seems to be a peak-to-trough measurement. The early 1980s recession was the fourth in a series of recessions in which the unemployment rate didn't fully recover before the next recession hit, resulting in a peak unemployment rate that was significantly higher than the current unemployment rate. (And before the conspiracy theorists out there claim we can't compare the current unemployment numbers to those of previous decades, you're wrong.)

That said, it seems very likely that the current recession will be the longest since the Great Depression. Even though it looks like the current recession may be on its last legs, the unemployment rate may very likely reach the second highest level since 1948, and could possibly go higher than that of 1982. In the latter case, it would unambiguously be the worst recession since the Great Depression —But it would be a far cry from what our grandparents and great-grandparents experienced during the 1930s.

Note: I notice that Cornell University (my parents' alma mater, BTW) law professor William Jacobson linked to a previous unemployment post of mine. I agree with his thoughts, so I encourage you to read his post.