As expected, opposition to aggressive action on the economy is building. One meme is "1982 was worse"; the implication is that since we survived 1982 without aggressive government action that we don't need to do anything differently this time.
This drives Krugman batty, since he repeatedly points out that you can't make interest rates subzero. Still, the 1982ers keep singing the "la-la" song.
Today, writing for Britannica, Jon Talton goes into more detail on how 2008 is not 1982 (emphases mine) ...
... Yet having lived through the 1980-82 recession(s) as an adult, it’s also important that we understand how today’s economic disruption is different and dangerous. It’s not all in our heads, as some critics of the media might have it..
1. China was barely a blip on the world economy in 1982. .. China and America are locked in an unsustainable and reckless “debt-for-stuff” relationship. Were it to deflate suddenly, it could make the popping of the housing bubble look small by comparison. In addition, China has become the world’s factory .. Now unrest is growing and could prove destabilizing.
2. Peak oil. The United States was only a few years past its peak in oil production in 1982, and world production remained ahead of demand... World peak is happening or near and the nations of this petroleum-addicted world are far from making the necessary adjustments to make the transition to a future of much more expensive energy. This is another recipe not only for economic disruption but also for geopolitical conflict.
3. Global warming. In 1982, it was a rarefied theory. Now it’s a clear and present danger... It will impose huge economic and social costs in the decades ahead. Also, more than 2 billion people have been added to the world population since 1982, severely stressing the planet’s carrying capacity.
4. The housing bubble. The housing crash of 1982 was part of a broad, cyclical downturn, made worse by the 1979 oil shock and the Federal Reserve’s war on inflation. Today’s housing crash is the result of a speculative bubble the size of which has few precedents. It will take years for this sector to come back and, for a variety of factors, the old suburban sprawl model is dying or dead. So it’s pointless to hope for a return to the 2005 go-go era. The housing crash this time has made Americans poorer, decapitated several major job sectors and helped bring on…
5. The banking crisis. Nearly every recession has an accompanying banking crisis. It could be contained in 1982 for several reasons, especially better regulation and smaller banks. ..Today’s banking system is a highly concentrated creature whose innards have metabolized far beyond traditional banking...
7. Human capital. Americans have seen their earnings stagnate for years — their only consolation the housing bubble which has now exploded. Their 401(k) nest eggs have lost as much as half their pre-crash value. Income inequality is at a high not seen since the eve of the Depression, stifling, among other things, economic mobility. Perhaps a million or more illegal immigrants are consigned to the shadow economy, kept out of mainstream advancement and creating a costly underclass. In 1982, the middle class was still strong, with relatively secure jobs, benefits and pensions. The health insurance system still worked. It was a very different country, whatever the temporary pain. In addition, today the skill gap has grown substantially. A tech-savvy “creative class,” as Richard Florida calls it, will create value in the future. Yet millions are left out, without the ladder up once provided by skilled, union, blue-collar jobs...
He missed a few key items and his monetary policy explanation skirted the fundamental zero-problem, but it's a good list.
The 80s were bad, but we know how to fix that class of problem. We don't know how to fix this problem.
The problem with a need for aggressive action is that there's a lot of political appeal to sitting calmly while the "chickens" run about squawking. Sometimes that's (only in retrospect) the right thing to do -- I was very concerned about SARS, but it (somewhat mysteriously) went away. My SARS experience made me a bit more cautious about the 2004 Avian Influenza report.
Sometimes it doesn't work. A lot of people were complacent about pre-WW II Japan, or the economic situation of 1929, or strength of the Maginot line, or the expansionary power of early euro-americans, or, for that matter, CO2 levels.
This time we don't need to fear "fear itself". We need to fear complacency.