The Myth of the Geographical Recession

A blog about business and economics.
May 29 2012 9:17 AM

The Myth of the Geographical Recession

1338297435034

Probably the central misperception about the Great Recession is the idea that it basically consists of wide-spread job losses among construction workers spurred by massive overbuilding. This misperception, combined with the fact that the unemployment rate is very low in a handful of states with barely any residents, has led a lot of people to vastly overrate the geographical basis of the recession. Since really out-of-control homebuilding was confined to a few places—Las Vegas, Phoenix, Florida, and the Inland Empire in California—you get people worrying that broad-based stimulus doesn't really do what we need to do. But look at this data I poached from Paul Krugman and reworked into a bar chart and you'll see that a majority of the population is living in places where the unemployment rate is over 8 percent and much less than 10 percent of the population lives in places where the unemployment rate is less than 6 percent.

That's all just to say that there's a lot of good broadly demand-stimulating measures could do. It's also true that the United States is a great big country with over 300 million residents and even optimal demand-side policy would still leave plenty of people facing plenty of problems. But there's a very big and very broad problem of mass unemployment out there that isn't limited to a handful of hard-hit locations.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

Blacks Don’t Have a Corporal Punishment Problem

Americans do. But when blacks exhibit the same behaviors as others, it becomes part of a greater black pathology. 

I Bought the Huge iPhone. I’m Already Thinking of Returning It.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Lifetime Didn’t Think the Steubenville Rape Case Was Dramatic Enough

So they added a little self-immolation.

Two Damn Good, Very Different Movies About Soldiers Returning From War

Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

Students Aren’t Going to College Football Games as Much Anymore, and Schools Are Getting Worried

The Good Wife Is Cynical, Thrilling, and Grown-Up. It’s Also TV’s Best Drama.

  News & Politics
Weigel
Sept. 19 2014 9:15 PM Chris Christie, Better Than Ever
  Business
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
  Life
Quora
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Slate Picks
Sept. 19 2014 12:00 PM What Happened at Slate This Week? The Slatest editor tells us to read well-informed skepticism, media criticism, and more.
  Arts
Brow Beat
Sept. 19 2014 4:48 PM You Should Be Listening to Sbtrkt
  Technology
Future Tense
Sept. 19 2014 6:31 PM The One Big Problem With the Enormous New iPhone
  Health & Science
Bad Astronomy
Sept. 20 2014 7:00 AM The Shaggy Sun
  Sports
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.