There are signs that the recession is bottoming out — some new housing starts and a slowing of unemployment claims are the first clues — but don’t expect job growth in Minnesota until next year. That’s the message from Dan McElroy, the state commissioner of Employment and Economic Development.
The Bemidji Pioneer caught up with McElroy at a conference Wednesday on “Advancing Economic Prosperity” at the American Indian Resource Center on the Bemidji State campus.
Also there was State Economist Tom Stinson, who’s sticking with his prediction of slow growth in the GDP in the fourth quarter and fairly good growth in 2010.
McElroy also offered some history lessons, the paper said:
He bristles when the media likens the current recession to the Great Depression, saying it is more like the recession of 1982-83, only longer, he told the 50 participants.
“That was a V-shaped recession — we got into it quickly and out of it quickly,” he said. “This one looks like it’s going to be a bathtub recession — we got into it over time, we’re going to be in a plateau for a while, and out of it rather slowly.”
The current recession is the 11th in the nation since first calculated in 1929, the start of the Great Depression, he said.
The Great Depression saw a decline in GDP of 25 percent, while the current recession is 5-6 percent, he said. The unemployment rate during the Great Depression was 25 percent, and it isn’t expected to be more than 10 to 10.5 percent now, and in Minnesota less than that.
“During the Great Depression, 40 percent of our banks failed without the guarantees of the FDIC or the Federal Reserve,” he said. “We’re up to 56 bank takeovers or rescues this year compared to about 25 last year — not a dollar of savers’ money has been lost during that time.”
Well yes many of the banks in the roaring twenties were run like pawnshops (read the oxford review of the Great Depression. I don’t quite get the part where the depression of 1982 is similar to todays but was v shaped wheras ours is u shaped like a bathtub (i.e. long horizontal shape) I do respect McElroy but perhaps he was a little tired or misquoted or overlooked context. It will be interesting to look back 10 years from now. One of life’s little pleasures.