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So, if we’re in "the worst economy since the Great Depression" — a phrase heard more and more these past few weeks — why doesn’t it feel quite that way?

Look around.

There are no bread lines. No throngs at the unemployment office. Last weekend at the West County Mall there were dozens of guys in green vests shepherding holiday shoppers through the packed parking lots. People lined up at the cash registers.

Yet we’re spending less, a rare thing in this country. The stock market has plunged so low that it may take years to recover. In the past 12 months, our economy has shed nearly 1.9 million jobs. And things are expected to worsen.

"It’s really no exaggeration to say the economy right now is in free fall," said Nigel Gault, an economist with IHS Global Insight.

So maybe we will land in a new Depression, or at least a long, ugly slump like the mid-’70s or early ’80s, periods that hit St. Louis quite hard. Those who study these things say it’s too soon to tell, or to know what real hard times would look like in 2009. Maybe things will be different this time; a lot has changed, after all.

When it comes to comparisons with the Great Depression, there’s a big difference between "worst since" and "as bad as," said David Wheelock, an economic historian at the Federal Reserve Bank of St. Louis. Really, nothing since has come close.

In the early ’30s, one in four people was out of work. Half of all mortgages were delinquent. Banks failed in droves and dragged local economies down with them. That’s not happening today.

Unemployment, while high by recent standards, is only 6.7 percent. About 7 percent, not 50 percent, of mortgages are delinquent. And banks have deposit insurance and national branch systems to spread the risk around.

The economy itself is much different now, too. We spend far less of our income on food and clothing, so hard times are less likely to mean people starving. Fewer of us work in highly cyclical industries that are most vulnerable in a downturn.

"The economy in the 1930s was much more about manufacturing and agriculture than it is now," Wheelock said. "It’s a much more information-based economy today."

And that could make it more flexible as things turn bad.

It’s also a more global economy, notes Glenn MacDonald, an economics professor at Washington University, and that should smooth out some of the bumps easy payday loans. Another smoothing-out factor is the growth of more stable industries such as health care and education, which now employ more people than factories and provide a bulwark against losses there.

"It used to be all the boats went up and down together," MacDonald said. "They simply don’t any more."

And although the gyrating stock market and the carnage in the housing and auto sectors get a lot of attention, things are nowhere near Depression levels yet, MacDonald said. If they were, you’d know.

"They’re interviewing people on TV about ‘the collapse of the economy.’ I’m sitting here looking out my window and there are cars driving by and people going to work, and when I go to Best Buy I have to stand in line," he said. "It’s like, ‘What are you talking about?’"

But there’s no denying this is a bad economic episode. A more apt comparison may be the recession of the early 1980s, when the Federal Reserve raised interest rates and tightened the money supply in a bid to tame inflation.

"That really slammed the brakes on the economy," Wheelock said.

The resulting slump crunched auto makers, steel mills and factories. Gross domestic product sank as much as 8 percent in a quarter. Unemployment hit 10.8 percent in late 1982 and was even worse in St. Louis, where, at the time, manufacturing provided one in four jobs.

"The labor market has been really tough here over the past year, but it’s nowhere near as bad as the recession of the early ’80s," said Russ Signorino, an economist at the United Way of Greater St. Louis. "Manufacturing jobs were disappearing hundreds at a time, thousands at a time. We haven’t had much of that so far."

Another thing that’s different this time is that legislators and the Federal Reserve have been pouring money into the economy, trying to keep credit flowing and stave off a deep recession. No one’s sure it’ll work, but their strategy is consistent with financial policy over the past quarter-century, a period economists call "The Great Moderation."

It’s a time that’s seen smaller swings than we’ve known historically — the highs not as high and the lows not as low. Key indicators such as unemployment and the gross domestic product have moved more slowly. A more diverse, global economy has lent ballast. All this, it would seem, argues against the likelihood of a new Depression or even a long, ’80s-style malaise.

But, then, people often think it’ll be different this time, notes MacDonald. "It’s always an issue of, ‘Is the future like the past?’" he said. "Will the Great Moderation describe the current situation? I don’t know."

tlogan@post-dispatch.com | 314-340-8291

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