I count among my friends and relatives several people who are literally physically sick about what the stock market is doing to their retirement and how the housing market is ruining the remainder of their net worth.  A larger number of friends have slipped into denial, averting their eyes from the lower right hand corner of the television screen and the Dow Jones bug that is posted by cable news channels and refusing to open their broker and 401(k) statements.

In the midst of the current panic, economist Robert J. Samuelson offers some reassurance in his Newsweek column in the October 13 issue.  His headline asks "Is This a Replay of 1929?" and his answer is generally "not even close," but it is his historical perspective on the stock market that is most heartening.

Samuelson says that economic slumps rarely become national tragedies.  The United States has suffered through ten recessions since the late 1940s.  While they probably seemed to last an eternity, they actually averaged 10 months.  The two worst downturns from 1973 to 1975 and 1981 to 1982 lasted 16 months and had peak unemployment of 9.0 percent and 10.8 percent compared to the 10 recession average of 7.6 percent.  Unemployment figures from September put the current level at 6.1 percent.

Bear markets since the war have also numbered 10.  A bear market is one in which the Standard and Poor's Index (tracking 500 stocks) declines at least 20 percent from the most recent peak.  The average of the 10 bears was 31.5 percent; in both the 1973-74 market and the tech bubble collapse of 2000-2002 the S&P tumbled about 50 percent.  Last Friday, Samuelson said, the S&P was off 30 percent from the high reached almost exactly one year ago.  At the end of the horrible day on Thursday the Dow was off 39 percent from the peak.

In the Great Depression the market - although probably measured by a different standard - lost 90 percent of its value.  This contributed to the misery of bank failures, bankruptcies, and unemployment that lasted nearly a decade.

Samuelson largely blames the reluctance of the Federal Reserve to act in 1929 for the devastation followed the stock market plunge and believes that there are so many mechanisms in place today and enough historical awareness avoid a repeat.  He offers an explanation of what is being done and what else can be done, but it was the comfort he offered by assuring his readers that their losses, painful though they are, are relative and probably short lived.