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Since it seems no one wants to use the “R” word, I thought I’d look up the history of all the economic downturns and recessions in the U.S. to see when they occurred and how long they lasted.

First, however, here’s a description of the 1980’s recession from “The Power of the Land ” by Fred Harrison:

“As was clearly evident in the 1980’s, land titles rose so high that the return from them does not warrant their cost. Demand for the titles declines and their prices fall. Interest rates follow, as the former buoyant influence of rising land title prices no longer holds them up, decreasing to within the capacity of efficient industry to pay. But by this time, a lack of confidence has pervaded the economy, people stop spending. It takes time for confidence to return. In addition, where governments have borrowed heavily, the debts incurred, including interest, still have to be met and act to retard recovery.

The above sounds exactly like what we’re going through right now….doesn’t it?

HISTORY OF RECESSIONS AND BUSINESS CYCLES IN THE U.S.:

• Panic of 1797 (1797-1800) lasted 3 years
• Depression of 1807 (1807-1814) lasted 7 years
• Panic of 1819 (1819-1824) lasted 5 years
• Panic of 1837 (1837-1843) lasted 6 years
• Panic of 1857 (1857-1860) lasted 3 years
• Panic of 1873 (1873-1879) lasted 6 years
• Long Depression (1873-1896) lasted 23 years
• Panic of 1893 (1893-1896) lasted 3 years
• Panic of 1907 (1907-1908) lasted 1 year
• Post War I Recession (1918-1921) lasted 3 years
• Great Depression (1929-1939) lasted 10 years and included a minor recession in 1937
• Recession of 1953 (1953-54) lasted 1 year
• Recession of 1957 (1957-1958) lasted 1 year
• 1973 Oil Crisis (1973-1975) lasted 2 years
• Early 1980’s recession (1980-1982) lasted 2 years
• Early 1990’s recession (1990-1991) lasted 1 year
• Early 2000’s recession (2001-2003) lasted 2 years

WHAT DO THE ECONOMISTS REALLY KNOW!?

In the early 1990’s, I attended a lecture by a chief economist for one of the largest banks in Portland.  After the lecture, Mr. Chief Economist opened the floor to questions.  At about the same time, I had noticed my clients were over-extended with heavy credit card debt and I was getting concerned.  They would go to apply for loans and were getting denied because they had too much debt.  Not that I knew better or different; however, I asked him if we would ever see a bad real estate market like we did in the 1980’s.  That was an awful time period and I didn’t know if I could survive another one like it.  His response to me, and I will never forget it was: “Oh no, we will never see another situation like the 1980’s recession because our financial system has so many governmental checkpoints that it will never happen again.”  NEVER HAPPEN AGAIN???  That Chief Economist is still at the same large bank in Portland today….what does he know?   Frankly, what do any of them really know? 

(For more local and national real estate news, click on my monthly newsletter - JUNG’S JOURNAL - on my website www.bettyjung.com).