UK: Worse than the Depression?

On their blogs, Paul Krugman and Brad DeLong have both reproduced this graph (from here):

and cited it as evidence that the UK economy is now worse than the Great Depression.  I haven't been following the UK situation closely, but I'm instinctively inclined to agree with their criticisms of the Cameron government's austerity policies.

Having said that, I think the graph (and implied interpretation) is a little unfair because of how Britain's experience during the interwar period differed significantly from that of the US.

While the US economy went pretty suddenly from the "roaring 20's" to the depression, the UK economy was already in bad shape throughout the 1920's, which I believe can be primarily attributed to the attempt to resume the gold standard at the pre-war parity (the infamous "Norman [Montagu] Conquest of $4.86"/ "Economic Consequences of Mr. Churchill") and the 1930's was just a further deterioration of an already dismal situation.

So, while it may be the case that the deterioration from 2008 in Britain has been comparable in magnitude and will be worse in terms of persistence than the decline starting from 1930, saying that its worse than the depression that ignores that Britain in 1930 already had an unemployment rate of 16%.

For comparison, here's the US (red) and UK (blue) unemployment rates over the past several years:

Yes, things look like they're getting worse in Britain, but they're not exactly in "Road to Wigan Pier" territory yet...

*Since this is just a quick blog post, I haven't dug into the technical differences between various unemployment data series, but I'm pretty sure they would all show similar trends, if not exact levels.

Update (1/30): In his column today, Krugman writes:

O.K., about those caveats: On one side, British unemployment was much higher in the 1930s than it is now, because the British economy was depressed — mainly thanks to an ill-advised return to the gold standard — even before the Depression struck. On the other side, Britain had a notably mild Depression compared with the United States.