What Really Matters - Employment

The financial crisis is grabbing the headlines and the conventional wisdom is that the government bailout of the reckless trading and chicanery of the financial sector will prop up asset prices and save the world from ending up in a very nasty place. With all this emphasis on the bail out and how it will make things better the fallout in the real economy where the really bad things are happening is being overlooked. In the space of a few hours someone can lose 30% of their portfolio but considering how they hadn't done much with those paper numbers for years, except logging in to look at the paper gains and revel in their increasing wealth, its immediate impact is one of unhappiness and wishing they'd sold at the peak. If the government bailout or even talk of it brings the numbers back up 20% the following day then things are not so bad after all and all they have to do is wait until everything really comes back up and this time to promise to sell and bank the profit.
However, what the government bailout may slow but won't reverse is the job losses due to the slow down in economic and bubble activity. For non retirees if your portfolio falls but you still have a job things aren't so bad really especially if prices are falling for what you consume. Houses are even affordable now when during the boom when we were all suppose to be better off they weren't. All this relative mental balancing is irrelevant though when unemployment strikes and the real lasting image of misery of the great depression was the unemployment that blighted the economy. The employment timeline for the USA during the depressions highlights this all too well:

1930 The unemployment rate climbs from 3.2 to 8.7 percent
1931 unemployment rises to 15.9 percent
1932 unemployment rises to 23.6 percent
1933 unemployment rises slightly, to 24.9 percent

When employment becomes the problem it will finally become clear why what happened in the 1930s was called the great depression and that a lot more is involved than bailing out banks who never should have been bailed out in the first place.