the EM-ployment rate and the depth of the Great Recession

Looking forward a few years, I'll get to teach on the Great Recession in Economics Principles classrooms. It will join the Great Depression and the 1970s stagflation / early-1980's recession as the three key macroeconomic events to be explained over the last 100 years.

Sadly, the lessons are similar to-- also thankfully, more moderate than-- those of the Great Depression. Years of monkeying around with the economy, increasing costs and uncertainty, blaming markets and capitalism while coming nowhere near allowing markets to self-correct, Keynesian subsidies, bailouts and stimuli, and so on. Ridiculous-- and horrible that Bush and now Obama are putting people through this, in their ignorance.

Here's Henry Olsen in the WSJ with another angle on this-- and a comparison of this time to the early 1980s:

Friday's grim labor report is the latest confirmation that our economy is not recovering. A loss of 131,000 jobs and a stagnant 9.5% unemployment rate are bad enough. But a deeper look—at the little-known civilian employment-population ratio—shows how hard it's going to be to pull out of our crisis, and why the Obama administration's policies are unlikely to do the job.

In contrast to the better-known unemployment rate, which measures the percentage of working-age Americans who are actively seeking jobs but do not have one, the civilian employment-population ratio measures the percentage of working-age Americans who have a job, whether they are seeking one or not....

This distinction matters because the state of an economy affects whether someone looks for a job at all. Bad times discourage potential workers from seeking jobs; boom times encourage marginal workers to seek them....

Looking at this ratio, America is suffering its largest drop since World War II. When the economy was at its Bush-era height, in 2007, a little over 63% of adult Americans had jobs. Friday's report shows that only about 58.4% do, a decline of nearly five percentage points. While the unemployment rate remains steady at 9.5%, the employment-population ratio continues to fall each month. In April it was 58.8%, in May 58.7%, and in June 58.5%....

History also delivers sobering news on how long it might take to recover our economic health. There is only one instance since World War II of the U.S economy increasing the employment-population ratio by five percentage points in a decade: the recovery that followed Ronald Reagan's tax cuts in 1983.

In the mid-1980s, the employment-population ratio recovered less than two years after hitting bottom. The momentum continued for the rest of the decade, fueled by the 1986 tax reform that lowered the top marginal income tax rate to 28%, allowing America to employ the millions of late baby boomers, women and immigrants who sought jobs. By the time the boom ended in 1990, the employment ratio had rocketed to 63% from 57%....