"The Great Depression II"
As most movie sequels are dwarfed by the original, so too does the rhetoric about the US sitting on the precipice of "another Great Depression" over-hype the current situation, and does a greater disservice to the original that Caddyshack II.
Mark Perry has a great post, filled as usual with charts galore, comparing today's economy with the Great Depression in bank failures; unemployment; GDP per capita; and the amount of income spent on food, clothing, and shelter. By the way, the 70s, 80s, and 90s were worse than today as well.
Alan Reynolds also writes that calling this the worst "economic" crisis since the Great Depression in nonsense; even calling this the greatest "financial" crisis is debatable, suggesting the Saving and Loans collapse of the 1980s was worse, but had little impact on the economy.
I'll add a quote from Friedrich von Hayek, which seems apt given the present rhetoric:
'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.
1 comment:
It is a logical fallacy to argue that there should be no bailout this time, because the S&L crisis wasn't that bad
In the former instance, the government DID bail out the industry, which implies that the bailout was the cause of the small impact on the general economy.
Actually, the relative mildness of the S&L crash in the "real" economy is evidence that the new bailout is a good idea.
Post a Comment