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How Bad Could It Get?Will the recession be more like the 1990-'91 downturn or the Great Depression?

By James Ledbetter
Posted Friday, May 2, 2008, at 5:06 PM ET

(Continued from page 2)

Is this an argument for complacency? No. There are lots of important unpredictables, including what happens in the rest of the world and the ability of the financial sector to steady itself. The mortgage crisis and the decline in housing prices are not over. There's also no obvious path for getting out of the current rut. Recent recessions have not resolved themselves without a catalyst, like the tech boom of the '90s or the housing boom of the '00s (both of which eventually brought on their own crashes). Moreover, if the modern recession is relatively modest, so, unfortunately, is the modern recovery. Expansions may last long, but if the snapback from the 2001 recession is any guide, we're unlikely to see bursts of domestic hiring or big pay hikes once things pick up.

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James Ledbetter is the editor of The Big Money, Slate's business site, which will launch later this year.
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