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Compared to 150 years of global financial history, this recession could have been worse

June 1938: A family in Pittsburg County, Oklahoma is forced to leave their home during the Great Depression, due to a serious drought in the region.

There's no doubt in anyone's mind that the Great Recession this country is finally starting to pull itself out of has been bad. But if you're someone whose job it is to study 400 years of global financial crises, you might take a look at the last few years and conclude that while things were bad, they could have gotten a lot worse.

"Well, it's not fun. That's for sure," says Harvard economist Kenneth Rogoff. "But if you compare it to recoveries we've had after World War II, where we had deep financial crises, or you compare it to dozens, even a hundred big financial crises around the world over the last 150 years, it could have been worse."

Rogoff says that while this recession has felt like a long slog, it hasn't been nearly as long as it could have been, and that we can thank the government's imperfect response to the crisis for that.

"I think policy definitely gets credit -- the very proactive performance of the U.S. Federal Reserve, the fiscal stimulus that was put in early on, whatever you want to say about it," Rogoff says. "I don't think we did as much as we should have on writing down subprime mortgage debt. But there were some measures taken to try to ease up a bit on homeowners, and I think all of these things helped us do quite a bit better than Europe."

But Rogoff says that while the U.S.'s economy is on the mend, there are still serious challenges that await it.

"I think overlaying this financial crisis is a long term trend toward inequality. And I'm not trying to apologize for the slow recovery. I'm not trying to apologize for policy where it could have been better. But it isn't easy in the middle of these things to know what's going on, and of course, there's globalization and technology changes which have also been hurting lower income workers, especially in countries like the United States."

About the author

David Brancaccio is the host of Marketplace Morning Report. Follow David on Twitter @DavidBrancaccio
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