Image via Wikipedia A person who was a child during theGreat Depression of the 1930swould be in his or her ninetiestoday. There is no shared national experience of the depths and devastating human impact of theGreat Depression. We feel the recession of today as being extraordinary, but how does it compareto the singular economic event of the last century?There are many relevant parallels between and lessons to be learned from the Great DepressionandGreat Recessionthat can provide a historical perspective and policy insight. The stock marketcrash of 1929 marked the beginning of the Great Depression, whereas the collapse of LehmanBrothers in September 2008 was the beginning of the Great Recession we are currently experiencing.Both periods were marked by increased unemployment, frugality, and popular unrest. The scopeof the economic crisis, however, is radically different. During the Great Depression the globalmarket did not have the institutionalized structures necessary to undermine the extent of the bust. Furthermore, the Great Depression was characterized by a severe double dip, whereas thecurrent economic crisis has maintained a steady growth rate; growth has slowed, but it has notstopped. There are also significant differences in the levels of deficit spending, manufacturingcapacity, and bank foreclosures.Perhaps of greatest importance were the public policy actions of President GeorgeBush,President Barack Obama, and Ben Bernanke, today¶sChairman of the Federal Reserve. The
quick and significant actions taken by a Republican President, a Democratic President, and aRepublican-nominated Chairman of theFederal Reserve Boardhave been the difference betweenthe extent of the severity of these two economic downturns²both of them were the result of historically unsustainable levels of debt prior to the economic collapse.