From The New York Times, December 2, 2008 – Click on image to enlarge

The above graphs depict various key factors contributing to the nature, length and depth of seven recessions over the past 40 years, including the current downturn. The recession that began officially last December has not been marked (so far anyway) by a relatively sharp drop in either GDP or personal consumption.

For that matter, the declining employment figures on which the National Bureau of Economic Research relied heavily to “date” the recession still look pretty good, compared to those of several earlier downturns.

Of course, we may be in the early stages of a deeper and longer recessionary period like that of 1980-82.

But the most striking thing about these data is the way falling housing prices practically leap off the page and smack you in the face. In every prior recession, the median price of a single-family home continued to go up or at least hold firm in almost every recessionary month. In sharp contrast, we see a steady, depressing drumbeat of sharply lower housing prices month by month over the past year.

To be sure, there was a huge housing bubble, inflated by years (maybe decades?) of easy credit and bad habits — and every bubble must eventually burst. But if there is a serious argument against working to put a floor under housing prices as a way to prevent the downturn from becoming a disaster, I’ve yet to hear it.

Visit me at The Purple Center.

UPDATE — 12/5/08 — I guess they heard me! The Fed now wants to help homeowners fend off foreclosures and the Treasury is working on a plan to subsidize new long-term mortgages at rates as low as 4.5% to stimulate home buying.

Politics A housing recession!