By: jackie.sauter

In today’s paper, my colleague Danielle Ulman quoted ClearBridge Advisors Chief Investment Officer Hersh Cohen as saying that he doesn’t believe we’re in a crisis comparable to the Great Depression:

“I have a house full of prints from the 1930s, and let me tell you, this is not the 1930s, people were selling apples on the street corner, bread lines…”

Interestingly, Wall Street Journal columnist Peggy Noonan used the same image of apple-sellers — or rather, the lack thereof — to explain why she also thinks all the Great Depression talk is overblown:

“One of the weirdest, most perceptually jarring things about the economic crisis is that everything looks the same. We are told every day and in every news venue that we are in Great Depression II, that we are in a crisis, a cataclysm, a meltdown, the credit crunch from hell, that we will lose millions of jobs, and that the great abundance is over and may never return. Three great investment banks have fallen while a fourth totters, and the Dow Jones Industrial Average has fallen 31% in six months. And yet when you free yourself from media and go outside for a walk, everything looks . . . the same… In the Depression people sold apples on the street. They sold pencils. Angels with dirty faces wore coats too thin and short and shivered in line at the government surplus warehouse.”

Newspapers, airwaves, and web sites are full these days with chatter about where to place the current economic downturn in comparison to others, especially the Great Depression. The number of freelance farmer’s markets on the street may not be the best indicator to answer this question, but then again, it may not be the worst. Apple-seller is, after all, a job, and one of the key indicators of Depression versus Recession is unemployment.

With the U.S. Bureau of Labor Statistics placing unemployment at about 6.5 percent at the moment, we’re nowhere near the dead waters of the Great Depression (at its height, unemployment reached 25 percent, and stayed in double-digits until the early 1940s). But a new employment report comes out tomorrow, and the experts sound grim. Just today, we heard about massive cuts in the financial and media industries. Paul Krugman, the Princeton economist who recently won the Nobel prize, wrote in his New York Times blog yesterday that things don’t look good:

“The economy is falling fast. We’ll see what tomorrow’s employment report says, but we could well be losing jobs at a rate of 450,000 or 500,000 a month…So here’s what I’m wondering: will it, in fact, even be possible to pull the economy out of its nosedive before unemployment goes into double digits? I’m starting to wonder.”

University of Baltimore economist Peter Morici is not quite as pessimistic. In a long e-mailed prediction about the future of the economy sent to The Daily Record, he predicted that the job losses for November will be 275,000, up from 240,000 in October. He went on to criticize President-elect Obama’s selection of Timothy Geithner as treasury secretary, calling him “one of the principal architects of the Bush Administration’s bank bailout policy, which has already pledged some $8 trillion in equity, loans and guarantees to resolve a crisis caused by about $2 trillion in mortgage-backed securities without unlocking credit markets.” He goes on to criticize the recent bailout of Citigroup because it allowed shareholders to maintain control over the company. By way of a conclusion, he provides a list of things to look for in tomorrow’s jobs report, and offers this advice:

“To stop the destruction of good paying jobs, Obama must push through an infrastructure-focused stimulus package to soften the impact of the recession and stem jobs losses, and at the same time, he must fashion policies to unlock credit markets, reduce oil dependence and fix trade with China.”

Presumably, he’s not talking about selling apples.

For the full text of the email click here.

ROBBIE WHELAN, Business Writer