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The current economic crisis is considered a recession, on the verge of depression. The reality is that we are not entering another great depression and the more proper term is "The Great Collapse". What has happened in the past, usually will happen in the future. I approach this problem not with the fuzzy mathematics of the economist but with the certainty and empirical evidence of the historian. Recessions and Depressions are trying times for the citizens of a nation. Collapses are a completely different situation. An economic collapse is followed by exponential increases in misery. The more comfortable the population...

Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession. A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of...

... The Great Depression was caused by misguided government policies adopted to avoid the "unsatisfactory conditions" signaled by the crash. The run-of-the-mill recession that ought to have followed the crash was magnified by the policies of the federal government during the administration of Herbert Hoover. In a paper for the National Bureau of Economic Research published last August, Lee E. Ohanian examines a continuing mistake during the Hoover administration that helped transform difficulty into calamity. An economics professor at UCLA, Ohanian has written numerous papers on the Depression. In one earlier paper, he pinned the persistence of high unemployment on...

This is not inside-baseball economics stuff -- don’t be afraid. Arthur B. Laffer at the Wall Street Journal has a good historical review of the Great Depression and what happened with tax rates during the period. Laffer defines the beginning of the problem, the Smoot-Hawley tariff implemented in 1930.

Explaining Two Trade Busts: Output VS. Trade Costs In The Great Depression And Today Douglas L. Campbell David Jacks Christopher M. Meissner Dennis Novy 19 September 2009 Trade has declined massively during the crisis. This column assesses the relative roles of falling demand and rising trade costs in explaining the collapse and compares it to the Great Depression. Surprising, the increase in trade costs today is as large as in 1929, despite the absence of any modern protectionism resembling Smoot-Hawley. It appears that reviving global demand alone will be insufficient to revive world trade. If the world economy is now...

Roy Langbord had guessed that someone in his family might have hidden away a great treasure decades before, but not until his mother had him check a long-neglected safe-deposit box did he realize just how great it was. Inside the box, opened in 2003, he found an incredibly rare coin, wrapped in a delicate paper sleeve. It was a gold $20 piece with Lady Liberty on one side, a bald eagle flying across the other and, at Liberty’s left, the four digits that made it so valuable: 1933. The famous “double eagles” from that year were never officially released by...

The economy's mild second quarter contraction has many proclaiming the recession over. Now is therefore a good time to survey the current recession so frequently compared to the Depression. It's natural to ask: how do these economic heavyweights measure up? When prizefighters step into the ring – a tale of the tape – a comparison of their primary physical attributes is revealing. A comparison of the economic and fiscal attributes is equally illustrative here.

One of the biggest myths about the great depression is that FDR's NEW Deal and the related government intervention and public works projects got us out of the Great Depression. The truth is that the New Deal did not work. Instead of creating growth in the private sector, it created government growth that squeezed out the private sector. Of course, the number one public golf course in the country Bethpage Black (where the US Open played this year) was a was a New Deal Federal works project, but that only cures MY depression, it did little for the country. As...

A UCLA professor examined the causes behind the Great Depression and published some startling findings. It is "common knowledge" that President Herbert Hoover's non-intervention in the economy and pro-business stance caused the Depression, which lasted from 1929-1941.

What caused the Great Depression? There are plenty of theories and arguments out there, and I don’t plan to review them. But a new one (at least new to me) is contained in a paper by Lee Ohanian, a U.C.L.A. economist, that was released today by the National Bureau of Economic Research. He blames Herbert Hoover. That is not exactly original; the Democrats ran against Hoover for a generation after he left office, much as some would now like to run against George W. Bush. But his criticism is that Hoover was too kind to workers, which is not exactly...

An economist is saying that President Hoover set the stage to worsen The Great Depression because of his pro-labor union stance. Pro-labor policies pushed by President Herbert Hoover after the stock market crash of 1929 accounted for close to two-thirds of the drop in the nation's gross domestic product over the two years that followed, causing what might otherwise have been a bad recession to slip into the Great Depression, a UCLA economist concludes in a new study. Lee E. Ohanian, a UCLA professor of economics, lays the worst of the Depression at the feet of Hoover who, in his...

While we aren't contrarian for the sake of being contrary, more often than not that is the position in which we find ourselves. Today, with the media falling all over itself to paint a rosy outlook for the economy while simultaneously voicing encouragement to the new administration in its remake of the nation in previously unimaginable ways, it's hard not to question our conviction that the worst is yet to come. Could the economy really recover this quickly from the traumatic trifecta of a record real estate bubble, leviathan levels of debt, and a global credit collapse? We don't see...

Federal Reserve Bank chairman Ben Bernanke, who was reappointed to a second four-year term Tuesday, is a renowned expert on the Great Depression, driven to avoid a repeat of such devastation. Bernanke has earned plaudits for helping steer the US economy through one of its most perilous periods and toward recovery, with President Barack Obama repeatedly thanking him for his contribution. He was aided in his bid for a second term at the helm of the Fed by the strong working relationship he has forged with Democrat Obama's economic team -- despite being a holdover from George W. Bush's Republican...

Excerpt ... Assets for failures for [the current] crisis total $7.1 trillion to date. This is nearly eight times the assets compared with the inflation-adjusted total for the S&L crisis. The data for bank failures in the Great Depression is shown in the following table. The total deposits involved were about $7.6 billion over a span of 13 years. Adjusted for inflation, that is $100 billion in 2009 dollars. The size of the crisis today, adjusted for inflation, is more than 70 times larger than the entire Great Depression. It's unlikely that bank failures can peak until we are close...

“Those who do not remember the past are doomed to repeat it” It speaks for itself!Libertas

"This is the worst economy since the Great Depression." We always hear it. But is it true? What's different? What's the same? What can we learn about the Great Depression so that we can avoid another one? These are all questions that require serious study, and serious knowledge about economics. So, we caught up with Dr. Tom Rustici, Professor of Economics at George Mason University, and author of the book, "Lessons from the Great Depression." We asked him to answer 6 important questions.

A nephew of mine is doing some project/study work on the Great Depression. I have tons of history books, but very little on economical history and the Great Depression. I'd like him to avoid Roosevelt adulating propaganda. What do you consider the authorative and most relevant books on the Great Depression and the (etatist) measures certain States (particularily US and Europeans) have taken against it? Thanks for your help.

Paul Krugman says that the jobs report confirms that we're plunging right back toward another Great Depression. We've lost 6.5 million jobs since the peak. After adjusting for population growth, we're down 8.5 million. As Richard Bernstein noted yesterday, wages and the workweek are also declining. Obama's stimulus, meanwhile, promises to create 3.5 million jobs by the end of next year (if you believe the projections). So, by then, assuming no further loss in jobs (please), we'll be about 5 million below where we should be. And state and city budget pressures are wiping out many of the benefits of...

How about that for a headline? Christians warn bankers and world leaders that continue to violate God’s word. Are groceries going up in price or is the dollar losing more of its purchasing power? I believe the dollar is in serious trouble in River City. It looks like those pesky old bankers are going to allow the dollar to lose more and more of its value. I was reading Chuck Butler's email this morning. He works for www.everbank.com and says the International Monetary Fund (Global Bankers and Masters of the Matrix) Chief Economist, Olivier Blanchflower, speaking at a conference in...

Green shoots are bursting out. Or so we are told. But before concluding that the recession will soon be over, we must ask what history tells us. It is one of the guides we have to our present predicament. Fortunately, we do have the data. Unfortunately, the story they tell is an unhappy one. EDITOR’S CHOICE Tight rules helped mitigate crisis in Brazil - Jun-16 Economists’ forum - Oct-01 Opinion: The three steps to financial reform - Jun-16 In depth: Global financial crisis - Sep-04 Economics: How the world economy might recover its poise - Jun-15 Two economic historians, Barry...

“Whereas before there had been almost no framework to explain what Roosevelt was doing, now a respectable one was forming. Spending promoted growth, if government was big enough to spend enough.” ~ Amity Shlaes, The Forgotten Man ------------------------------------------------------------------------------ Perhaps as a result of all the commentary suggesting that we’re in the midst of the worst economic downturn since the Great Depression, there’s lots of talk about what led us out of same. It’s conventional wisdom that the government spending wrought by World War II ultimately sparked our emergence from the 1930s downturn, but the evidence suggests otherwise. World War II...

New Deal Nostalgia Deconstructed by: Alana Goodman, June 09, 2009 With the U.S. unemployment rate hitting a 25-year record high of 9.4 percent in May, economists have expressed pessimism about the future of the economy, but were quick to draw distinctions between the current recession and the Great Depression. Speaking at the Cato Institute’s “Lessons from the New Deal and Great Depression” seminar, Economics Professor Harold Cole of the University of Pennsylvania told the audience, “You want to be careful about comparing the current [recession] with the Great Depression…The Great Depression was much worse.” Cole explained that during the Great...

Still not convinced? Green shoots are sprouting into a jungle around the world. Consider a few of the economic indicators published in the past two weeks: British house prices have risen in two of the past three months. Japan has experienced its biggest monthly increase in industrial production since the Fifties. Consumer and business sentiment are rising strongly in the United States and Britain and are even showing some signs of life in Europe. In America, where all the trouble started, unemployment claims have fallen, durable goods orders and property sales have bounced back and house prices have stabilised, although...

An intriguing aspect of today's economic mess is renewed interest in the Great Depression, the calamity that engulfed most of the world in the 1930s. Since Jan. 1, 2008, the two-word soubriquet appeared in 753 New York Times articles, a fivefold increase over the previous 17 months. To no one's surprise, nearly all this Great Depression talk centers on the darker side of down times — unemployment, falling prices, bank failures, foreclosures, dispirited stock markets, bread lines, soup kitchens and Hoovervilles. The message rings loud and clear: We don't want to go there again. Digging a bit deeper, though, we...

This article will identify the root causes of what is coming to be known as, The Great Recession. Certainly, this economic downturn, thus far, isn't anything nearly as dire, statistically, as The Great Depression, which sported 25% unemployment. However, this is easily the worst recession since the early 80's, and could end up being worse than that one if trends continue and the government doesn't get out of the way.

... [E]ven if another depression is next to impossible, there is still the danger that next year, or the year after, might turn into 1936. Let me explain. From its bottom in 1933 to 1936, the G.D.P. climbed spectacularly (albeit from a very low base), averaging gains of almost 11 percent a year. But then, both the Fed and the administration of Franklin D. Roosevelt reversed course. In the summer of 1936, the Fed looked at the large volume of excess reserves piled up in the banking system, concluded that this mountain of liquidity could be fodder for future inflation,...

Teachable Moments by: Malcolm A. Kline, May 07, 2009 Here’s a couple of history lessons you are not likely to get in school. The Depression That Wasn’tThe stentorian orator who as president saved America from the Great Depression in the first half of the last century was none other than—Warren G. Harding. “During and after World War I, the Federal Reserve inflated the money supply substantially,” historian Thomas E. Woods, Jr., writes in the May 4, 2009 issue of The American Conservative magazine. “Once the Fed finally began to raise the discount rate—the rate at which it lends to banks—the...

We are beginning to learn that $12.8 trillion doesn't last very long when it is being spent by corrupt politicians and idiot bureaucrats. It doesn't seem to matter how much Obama has already spent or committed; he just has to keep spending more and more and more. WASHINGTON – The Treasury Department said Monday it will need to borrow $361 billion in the current April-June quarter, a record amount for that period. It's the third straight quarter the government's borrowing needs have set records for those periods. Treasury also estimated it will need to borrow $515 billion in the July-September...

There aren’t any sex scenes or vampires, and it won’t help you lose weight. But House Republicans are tearing through the pages of Amity Shlaes’ “The Forgotten Man” like soccer moms before book club night. Shlaes’ 2007 take on the Great Depression questions the success of the New Deal and takes issue with the value of government intervention in a major economic crisis — red meat for a party hungry for empirical evidence that the Democrats’ spending plans won’t end the current recession. “There aren’t many books that take a negative look at the New Deal,” explained Republican policy aide...

There aren’t any sex scenes or vampires, and it won’t help you lose weight. But House Republicans are tearing through the pages of Amity Shlaes’ “The Forgotten Man” like soccer moms before book club night. Shlaes’ 2007 take on the Great Depression questions the success of the New Deal and takes issue with the value of government intervention in a major economic crisis — red meat for a party hungry for empirical evidence that the Democrats’ spending plans won’t end the current recession. “There aren’t many books that take a negative look at the New Deal,” explained Republican policy aide...

<p>The Great Depression of the 1930s was the most momentous economic event of the 20th century. It was a proximate cause of World War II, having fed the Nazis' rise in Germany. It inspired a new American welfare system as a response to mass misery. Everywhere, it discredited unsupervised capitalism. Given today's economic crisis, our renewed fascination with the Depression is natural. But we ought not stretch the parallels too far.</p>

Seventy five years ago is going to seem like yesterday here in just a second. Take a look at this cartoon published in the Chicago Tribune on April 21, 1934 titled, “PLANNED ECONOMY OR PLANNED DESTRUCTION?” It’s true for most that their sense of history usually extends into the past only about as far as the day they decided to start paying attention to what was going on around them. An old saying goes something like this: “History, it is said, repeats itself. Few but are reminded almost every day of something that has gone before.” Every “crisis” seems brand...

Is this recession really all that unusual? "Happy families are all alike," Tolstoy wrote. "Every unhappy family is unhappy in its own way." Does that hold true for economic cycles as well? We are certainly in an unhappy place at the moment, and while many pundits claim that this recession is unprecedented, it may not be as unusual as some believe. That, anyway, is one conclusion that McKinsey & Co. draws from its comparison of the current downturn with the four most recent recessions. The firm found that our present unhappy moment is in fact quite a bit like the...

Paul Krugman throws cold water on the "green shoots and glimmers" everyone's all excited about. He makes four key points: Things are still getting worse. "The most you can say is that there are scattered signs that things are getting worse more slowly — that the economy isn’t plunging quite as fast as it was. And I do mean scattered." Some of the good news isn’t persuasive. Goldman's "excluding December" quarter. Wells Fargo's best quarter ever. There may be other shoes yet to drop. "Even in the Great Depression, things didn’t head straight down. There was, in particular, a pause...

Despite the unprecedented steps already taken by central banks and governments worldwide. This recession is likely to be "unusually long and severe, and the recovery sluggish," said the Fund, releasing two advance chapters from its World Economic Outlook. However, it warned there is a risk that it could spiral down into a full-blown slump unless further action is taken to stop "feedback effects" gathering force. Dominique Strauss-Kahn, head of the IMF, said millions of people risk being pushed back into poverty as the economic storm ravages the most vulnerable countries. "The human consequences could be absolutely devastating. This is a...

Let's cut through all of Barack Obama's baloney. His speech on the economy at Georgetown University on Tuesday was a testament to the massive ego of a callow leader with grandiose pretensions bordering on megalomania. Everything he outlined in his vision for a near-Utopian economic future is designed to come about through the intervention of a government central planner -- his own Oneself -- combined with the coercive force of government to make it happen. It's a promise of economic growth at the point of a gun, at least tacit if not explicit -- and all as if some genius...

There's much talk of the world being back in 1929, another Great Depression. For some, it is more like 1849. Back then, hundreds of thousands flocked to California in search of their fortune after gold was discovered there, founding the iconic image of men standing knee-deep in water, desperately sorting away the sediment in search of treasure. Now, there are tentative signs of a new gold rush in the US, according to the Gold Prospectors Association of America (GPAA). Searching the rivers The group has seen a 20% in membership in the last year, driven by the deepening recession and...

For more than half a century, America’s political leaders — Republican and Democrat — have sought to wrap themselves in the legacy of Franklin Delano Roosevelt, the man credited with replacing fear with hope and ending the Great Depression. But in recent years some writers and economists have been telling a version of this story that is quite different from the one generally taught in school or seen on the History Channel. In this interpretation Roosevelt is a well-meaning but misguided dupe who not only prolonged the Depression but also exacerbated it. ... Amity Shlaes, a syndicated columnist who works...

The following text is from the TCM website's writeup of this film.============== Warner Brothers was never the sort of studio to shy away from exploring social ills or the harsher aspects of American life and Wild Boys of the Road (1933) is a perfect example of their commitment to this sort of picture during the early sound era. Set during the Depression, the film follows two middle-class boys who take to the road when economic hardships drastically alter their situations at home. Riding east on a freight train, they befriend other homeless youths along the way until railroad authorities force...

Two UCLA economists are blaming the length of the Great Depression on President Franklin D. Roosevelt, who instead of being blamed has always been thought of as the main catalyst who brought the country out of the Depression. Instead, in the August issue of the Journal of Political Economy, Harold L. Cole and Lee E. Ohanian conclude that the New Deal policies FDR signed into law thwarted economic recovery for the country. See UCLA Newsroom. After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into...

So let me do the preachers of Armageddon one better. Today's stock market isn't just the “worst since the Great Depression,� like they're so fond of saying. No, it's even worse than the Great Depression. Take a look at the chart, below. It shows the daily progress of the S&P 500 in terms of percentage change from the very top. The brown line is the change from the recent all-time highs on October 9, 2007. The blue line is the change from the all-time highs just before the Great Depression, September 6, 1929. As of yesterday's close (Thursday, March 5),...

Your investments have disappeared. Your vacation fund has vaporized. New clothes for spring are only a daydream. But you have to eat. Perhaps that's why the charm of Clara Cannucciari and her online show, "Great Depression Cooking With Clara," keeps her popular. Clara knows what she's talking about. She was born in 1915 in Chicago, and says she quit high school to work in a factory as a teenager. These days, she shares her wisdom from upstate New York. Some Los Angeles residents, including Pat Box (at right), recently shared their memories of Depression-era food with The Times.

LONDON, Feb 27 — A bigger proportion of non-investment grade companies will go bust in the US and overseas in the coming years than during the Great Depression, according to Moody's, one of the world's foremost experts on credit. In what will be seen by many as die-cast confirmation that the world economy is plummeting towards an economic and corporate implosion of unprecedented proportions, Moody's said it anticipated a tidal wave of defaults was approaching. It said that in the coming months more than 15 per cent of speculative-grade bonds and loans — all but the most highly-rated — would...

In what will be seen by many as die-cast confirmation that the world economy is plummeting towards an economic and corporate implosion of unprecedented proportions, Moody's said it anticipated a tidal wave of defaults was approaching. It said that in the coming months more than 15pc of speculative-grade bonds and loans - all but the most highly-rated - would default on their debts. This peak is even higher than the peak reached in 1933, when bank after bank throughout America was collapsing, taking hoards of other companies with them. Back then, the default rate peaked at 15.4pc; moreover these companies...

The Great Depression has Arrived- Collapsing American Dreams Feb 19, 2009 - 12:52 AM By: David_Vaughn Best Financial Markets Analysis ArticleIt almost seems amusing that we are still discussing the “coming” depression because of the fact that it is already arrived and settling in. Really, what this entire new “era” is all about is watching our dreams deteriorate right before our eyes. Want to hear what the real world is like today? Country star John Rich dramatizes this well in his new song, “They're Shutting Detroit Down.” John Rich – “They're out there losing millions and it's up to me...

Yes, we're going through tough times, but President Obama has repeatedly invoked the Great Depression and it's scaring the heck out of consumers. Who's going to go buy anything if we're headed for an economic catastrophe? People will horde every penny they get and businesses will suffer and things will only get worse. In a well-written op-ed piece in Friday's Wall Street Journal, University of Nevada-Reno economics professor Bradley R. Schiller takes Obama to task for spreading fear itself to win votes for his stimulus package. In his article titled, "Obama's rhetoric is the real 'catastrophe,' " Schiller points out...

Academic Creeds by: Malcolm A. Kline, February 18, 2009 It’s one thing when jaundiced observers such as your servant dissect higher education. It’s quite another when the dissection is done by insiders, particularly when they haven’t left their day jobs yet. “Here is the question: Are we really free today, or are we now becoming more and more enslaved by the constructs of the Übermensch-the superman-the power brokers, the elites, the ‘fittest’ who have survived in the political arenas of campaigns or campuses?” Oklahoma Wesleyan University president Everett Piper asks in the January 2009 issue of Perspective magazine. “Are we...

With the debate over the "Porkulus" bill in Congress (or, as I like to call it, "Pork and Awe"), there has been a great deal of related discussion over why the bill will work, or won't work, to stimulate the economy and create much-needed jobs and economic growth. However, much of the debate has devolved into partisan bickering. It might help to take a step back, and consider the differences between government and private spending in a more general sense. To begin with, what does the stimulus package claim to do? Apparently, it authorizes the government to spend money, in...

For five years, classical liberal columnist and Council on Foreign Relations fellow Amity Shlaes delved deeply into the history of the Great Depression. She had been an op-ed editor at the Wall Street Journal, a WSJ columnist reuniting Germany, and a columnist for the Financial Times. She wrote two books, on German national identity and on America’s tax policy, critiqued from the right. Both sold well, but neither one foreshadowed the success she’d have with her research on the New Deal. The Forgotten Man: A New History of the Great Depression, published in 2007, has become one of the most...

President Barack Obama has turned fearmongering into an art form. He has repeatedly raised the specter of another Great Depression. First, he did so to win votes in the November election. He has done so again recently to sway congressional votes for his stimulus package. In his remarks, every gloomy statistic on the economy becomes a harbinger of doom. As he tells it, today's economy is the worst since the Great Depression. Without his Recovery and Reinvestment Act, he says, the economy will fall back into that abyss and may never recover. This fearmongering may be good politics, but it...