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Economic problems today not as bad as previous times Print
Letters to the editor
Thursday, Dec. 25, 2008 -- 1:00 AM

To the editor:

You began your Editor’s View of the December 11, 2008, issue with the declaration that “ . . . people are suffering from the effects of an economic crisis worse than we’ve experienced since the Great Depression . . . ” You exhorted readers to participate in diocesan works of spiritual and material support for the unemployed. I very much applaud the works of charity you encourage. However, your statement about the gravity of this crisis is exaggerated and harmful.

During the Great Depression the unemployment rate reached at least 25 percent. The unemployment rate last declared by the U.S. Department of Labor was 6.7 percent, a far cry from the 1930s. There have been at least six recessions since WWII with higher peak rates of unemployment. Most recently, the recession of the early 1980s created an unemployment rate of 10.8 percent, worsened by high inflation and high interest rates.

By exaggerating the problem you are fanning a sense of crisis that is scaring people and causing them to behave in a way that actually worsens the economy.  There are, to be sure, many thousands of families in our area plagued with doubts about their economic future — in particular, the autoworkers in Janesville. Yet, the jobs of 90 percent plus of those working in our community are secure, or subject to minor and temporary dislocation. Moreover, during the Depression most households had but one breadwinner.

When scared, people tend to reduce their spending. This loss in confidence is worsening the original cause of our current economic mess — the banking and housing sectors. Our brothers and sisters in Janesville are being hurt by consumers buying millions of fewer cars because they are worried about the future. This is even true of people who have a real need for a new car and whose household incomes are secure.

My prayer is that those of us whose jobs or retirement incomes are secure will dig deep to support those charities that minister to those in need. But, I would also hope that the economically secure should not be so fearful that they drastically reduce their normal consumption. The unprecedented increase in household savings and panic-induced drop in consumption is punishing autoworkers and all those secondary industries that support the auto industry and its workers.

Gregory Krohm, Madison