Scary graph

[unixronin]

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.

Comments

[house-pundit.livejournal.com]

This is the kind of crisis the Fed was created to deal with.

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.

[bratling.livejournal.com]

nominated: comment of the year.

[ithildae.livejournal.com]

Nicely put. There had been several periods of bank failures starting in the 1870's. The boom/bust cycle was eating banks (and people's finances) before the Great Depression descended upon us. That was such a huge wake up call, that the government actually decided to try and fix it. It has worked very well for about seven decades. That is a pretty good record for a government program. Here's hoping that it continues to work, the entire world economy is at stake.

[unixronin.livejournal.com]

Dead on the mark, IMHO. But most of Capitol Hill is still afraid to even murmur "recession" or "economic slowdown".

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.

[wyrdling.livejournal.com]

quite.
i still get the chills, though. economics can be such a house of cards if people don't do their jobs....