Saturday, November 29, 2008

Comparisons to the 1930s: Nonsense and Nitwittery

GENESEE COUNTY, Michigan -- To those who lived through the Great Depression -- people now in their 80s and 90s -- today's economic conditions don't come close to rivaling the distress of the Great Depression.

"When I see that on the TV, I say to myself, 'You don't know a thing,'" said Flint resident Peggie Chisolm, 92, laughing.Worries mounted that the United States could be on the verge of the next depression a few financial institutions collapsed and the stock market took a dive.

But how plausible is it that economic conditions could return to the days of the 1930s, when "Brother Can You Spare a Dime" could be heard on the radio and shantytowns sprung up across the country?

Local economist Mark J. Perry says that any such comparisons are "complete nitwittery and utter nonsense." "Most of the people complaining still have their iPod, their computer and two cars in the garage," said Perry, an economics professor at the University of Michigan-Flint. "It's not based on any factual evidence. We're so spoiled that it really takes distorted thinking to compare the Great Depression to today."

5 Comments:

At 11/29/2008 10:37 AM, Anonymous Fred said...

Great stuff!

 
At 11/29/2008 10:59 AM, Anonymous Michael Smith said...

You are right, we are nowhere near the Great Depression and it's hysterical nonsense to claim that we are.

But Obama's Hooverian/Rooseveltian economic plans could push us a lot closer.

All of the significant mistakes made by Hoover and Roosevelt -- such as tax increases, protectionist trade restrictions and unleashing of union power -- all are planned by Obama, plus one plan that promises to dwarf the damage that anything Hoover and Roosevelt did: so-called "cap and trade" legislation that puts limits on CO2 emissions.

On top of all that, the Federal Reserve has so lowered reserve requirements that our banks are operating on less than 2% reserves -- which means, not a one of them can survive even a modest run.

If Obama follows through on his campaign promises, we are in deep, deep trouble.

 
At 11/29/2008 4:21 PM, Anonymous Anonymous said...

Ugh. This is utter nonsense. I've explained this so many times it's amazing you haven't got it:

The soup lines didn't start in 1929 Prof! It took years for the misery to really sink in. We're only at the beginning of this bust. The equivalent of 29.

So you're essentially attacking a historical straw man. "Look! Look! things aren't as bad as the depth of the Depression yet! wheeeeee".

Also note that is was political mistakes that helped exacerbate and extend the aftermath of the crash in 29. We can look forward to the same thing with higher taxes, more regulation and more protectionism.

If you think the worst has come (and let's be honest, you've been totally wrong with your halcyon commentary ALL YEAR), you're sorely mistaken.

 
At 11/29/2008 5:09 PM, Blogger like such as said...

anon...

Forgive the "prof" if he hasn't taken your devastating analysis to heart (you could try choosing a name; it might help). Ever consider the possibility that your opinion doesn't really matter? Not to speak for "the prof," but the position consistently held on this blog has been that there are more recent, more relevant eras that we can compare our current situation to. The problem, though, is that the Great Depression is a lot scarier than "that recession in the early 80s," so most journalists have chosen to be shocking rather than to be accurate.

You're right, of course, that it will probably get worse before it gets better. When it does, there is even the possibility that conditions will be worse than they were in 1981; at that point, it would be justified to make comparisons to 1930. Right now, that's not the case, so to say that "were in the worst crisis since the Depression" is utterly misleading and is blatant fear-mongering.

 
At 11/30/2008 10:41 AM, Blogger karsten said...

A very interesting article and the first hand accounts of the desperation that people endured and a notable contrast to how much deeper people today can dig before they are truly 'digging deep'.

 

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