![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
Commentary: Someone elsewhere commented that this needs to be a log scale, and is meaningless if it's not in adjusted dollars.
I disagree. Adjusted dollars or not, anyone can see that this is blip, blip, blip, blip, blip, HOLY FUCK. Sure, the dollar has tanked. But it hasn't tanked THAT much. The dollar's lost maybe half its 1985 value, not 98% of it, which is the sort of depreciation that would be required to bring that vertical spike into scale with the other blips.
As for a log scale? On a graph like this, the only thing a log scale would serve is to hide the data and make it look much, much less significant. Most people do not think in terms of log scales (hell, most people don't understand what a log scale is). If you're releasing log-scaled graphs for the public at large, you're doing it to mislead them and make the spikes look as much smaller as you can get away with.
no subject
It's like watching a tracer at night ricochet upward off of a berm.
no subject
no subject
I look at this graph, and I see the shit heading directly for the fan.
no subject
no subject
no subject
I have no idea as to the logic behind a log scale in this case. It's a simple time/value graph, and as far as I know neither time nor value is logarithmic in this world.
no subject
no subject
no subject
how big was the economy last year ago before the borrowing started in earnest? probably not 2% of its current size.
no subject
no subject
If you're releasing log-scaled graphs for the public at large, you're doing it to mislead them and make the spikes look as much smaller as you can get away with.
Log graphs have their place. They're not for making spikes look small, they're for making data look appropriately sized. Measuring growth using a linear graph is deceiving; growth is an inherently exponential process, and the human brain perceives things in a linear context, so using a lin/log graph is appropriate.
In this case, a log graph might be more appropriate if the details of the rest of the graph were important. Adjusting for inflation would be lovely but again, only if you care about the noise in that small line. But this is a graph that shows one single fact, so who cares about the rest. It'd be valid criticism -- if the intent of the graph is to show trends over time. But this is not the intent of the graph.
I dislike people who pretend that you can make a graph that *doesn't* have an agenda. You can make a graph whose agenda you don't know -- scientists do this all the time, and call it 'exploratory research' or 'data mining', and it's very useful -- but all graphs have a story they are telling/highlighting about the data they contain.
...The reason this graph scares me is that this is completely unprecedented territory. Extrapolations from previous data about how to behave, economically, aren't going to work here.
no subject
Yeah, exactly. I've seen graphs like this before, in systems where there is a significant, but finite, amount of internal ability to stabilize itself. The outwardly visible datum looks stable, with only minor corrections and fluctuations, because you can't see the system internally managing itself to keep up with the increasing deterioration. Then the system exhausts its stabilization (or error correction, or damage control) capability, and suddenly everything goes to hell in a handbasket before anyone has time to react, leaving everyone sitting around dazed and wondering WTF just happened.
no subject
no subject
no subject
is GNP this year 50 times what it was last year?
no subject
To prevent everything from imploding, the Federal Reserve has chosen to inject more cash into the system by loaning banks money (since lowering the fed funds rate is not going to be effective for various reasons.)
In the past, borrowing from the Fed was generally considered a sign of financial weakness, and everyone avoiding doing it at pretty much all costs. Various new programs, plus absolute desperation, have made it acceptable. So while this chart is interesting, you really need to get into discussions of how the Term Auction Facility the other programs they introduced work, and other measures of how badly the banks are screwed.
no subject
In the Great Depression, everything fell apart.
Now, everything's trying to fall apart, but so far the Fed's done a pretty good job of keeping it together.
This is the nuke the Fed was created as an ABM for. We just haven't had that nuke actually come in until now.
The Fed is nice for keeping things balanced day to day, year to year. That's not it's primary reason for existing. It's reason for existing is to put the breaks on a panic in a crisis like this and give people and institutions time to calm down and adjust their financial positions rationally.
The banking system may still fall apart, hard. But it's much less likely, and the falling apart part is much less likely to cascade through the system like it did in 1929 and the 1930's.
Of course everything spiked. We haven't had this level emergency again since 1929. The Fed is performing its real raison d'etre.
no subject
no subject
no subject
They would probably say they're trying to avoid panic. I say, the first step to fixing any problem is to admit that it exists. You can't fix it as long as you're in denial about it.
no subject
i still get the chills, though. economics can be such a house of cards if people don't do their jobs....