The headlines these days trumpet the bad news of housing foreclosures, layoffs and business failures along with stories about homelessness, food pantries and lost retirement funds. Obviously, the current economy is challenging, but just how bad is it compared to previous downturns?
The head of President Obama’s Council of Economic Advisers, Christina Romer, says that in the past few weeks she’s heard herself uttering these words far too often: “the worst 12-month job loss since the Great Depression, the worst financial crisis since the Great Depression, the worst rise in home foreclosures since the Great Depression.”
Those phrases echo through the halls of Congress and tumble from the president’s lips. Even Federal Reserve Chairman Ben Bernanke sounds off, saying this week that “the world is suffering through the worst financial crisis since the 1930s.”
What wusses we’ve become. Or, perhaps (alternatively), how susceptible to demagoguery. Having run a business in the ’80-’82 recession, I can assure you that this one is not yet even close.
You know? The piano business — and after houses, pianos were as common as cars today and the second largest purchase a family ever made — was absolutely clobbered in the early ’30s, and it never recovered. By today’s mentality everyone would expect them to be supported and bailed out, but the trends (imports, radios, other alternatives) had sealed their doom. Government assistance would have been an absolute waste.
I farm for a living. Farm subsidies began in the 1930s, and though they unquestionably helped a number of families at risk of losing the farm … three generations later we still have them, and they perform no useful function. In fact they distort markets and encourage farmers to make stupid capital allocation decisions.
The kindest and most effective thing government can do right now is more or less nothing. Depressions and deflation magnify [i]efficiency[/i]. Why do people in politics wish to undermine our most efficient producers by supporting inefficient producers and an entire class of professional parasites?
I combed this article as I have many others and again, find no mention at all of the Dustbowl. Although it didn’t affect directly living conditions on the East Coast in the 1920-30s, it did degrade the physical environment of the entire Midwest, and drove thousands to the West with almost nothing to their names. Does anyone ever learn about that in school anymore? Some of us heard about it from our own family members who were affected.