I will have to admit that I get very tired of politicians and news media making such a big deal of our small and relatively minor recessions. I remember hearing in 1992 that our economy was the worst since the great depression, which amazingly we heard again last year. It seems that this is a convenient way for them to state that the current administration has not been doing enough. The greatest hero of the great depression has been Franklin D. Roosevelt, who got this country through the depression and into World War II, which actually ended the depression.
However, economists and historians are now re-thinking this line of thought and beginning to believe that Roosevelt’s constant “tweaking” of our country’s economy and his policies did more to extend the great depression than if he had done nothing. Many in his administration were Stalin sympathizers and hoped to be able to set in place some of the same command economy systems that the Russians had designed and were extremely antagonistic to the free market. They were anything but laissez-faire. Unfortunately, however, what this did was to stifle an already struggling economy and make it not only struggle against the market forces which caused the collapse, but also against the government that claimed to be looking out for the “little guy”.
Last year I thought that all this talk about another depression was comical, just a bunch of Chicken-Little politicians trying to stir up things to get elected. Had things stayed the way they were, perhaps we would be climbing out of that recession by now. However, with almost a year of “tweaking” of his own and attacking the market as a bunch of greedy old men, our current President is doing a good job of walking down the same path that FDR took that very well could lead us to another great depression.
Amity Shays writes an interesting and updated view of the great depression in her book “The Forgotten Man“.
Which makes this debate in the Wall Street Journal very interesting. Could we be on the edge of another depression? Until recently I would’ve said absolutely not. Now, however, I’m not sure.
Eighty Years After the Great Crash — ‘Is It the ’30s Again?’ (Wall Street Journal)