Don’t Get Depressed, It’s Not 1929

"A final difference: after the 1929 crash, the nation had to wait more than three years for a president who simply wasn't up to the job to leave the scene. This time, we've got to wait only a few more months."

Typical partisan crap. Does Newsweek have anything liberal partisans in any department?

1929, USA was a creditor nation.
Today, it is the world's largest debtor.

If the Bank fails and closes that is extremely good news for conscious citizens. We can finally get together to learn about what is wrong with our centralized usurious and tax based debt-money sytem. we can get together in our neighborhoods and city council and create debt-free tax-free currency based on new perception and definition of money. Search my blog Deep Conscious Capitalism @ www.msn.com

Dear Razed; Give us a break with your 'affordable housing' nonsense. This is a complete lie and you know it. As if the huge deregulation and debt-trading Ponzi scheme known as conservative economics had nothing to do with it all. Turn off Limbaugh and try some truth for once.

"Why exactly WAS unemployment still at nearly 20% as late as 1938?", asks boyydz.

it's been recognized that New Deal programs did have a postive economic impact at their inception and throughout the 1939s, which did result in bringing down unemployment down to around 10% before the 1937 recession (often referred to as the 'Roosevelt Recession'). The causes of the 1937 recession which resulted in the recurring high unemployment rate result that you refer to are worth looking in to. Keynesians would argue that deficit spending was having its intended effect of priming economic demand but what was lacking in the latter part of the decade was an even greater amount of deficit spending (the kind that would eventually be implemented at the beginning of our involvement in WW2) and a greater willingness of businesses to invest. Deficit spending IS a viable strategy for dealing with sagging demand (proven by the amount of debt incurred by the fed. govt. to fight a two front war). Like Chredon, i wonder how willing foreign creditors will allow us to borrow. And if they do, how much of that debt will be owned by China...?

Just because it isn't currently as bad as 1929 doesn't mean it isn't still bad.

If my neighbor is out of work or losing his home due to foreclosure, that's unfortunate.
If I've lost my job or my home, that's a tragedy.
And if my whole neighborhood has lost their jobs NAD their homes, that's a catastrophe.

Depending on where you live, things are either unfortunate, tragic, or catastrophic, but any way you slice it, things are not good.

So forget telling folks it was worse in 1929; it doesn't make people feel better. Nobody wants to wait around until things get as bad as 1929 - things are bad enough now.

Isn't there some way that those who created the financial crisis could be the ones that take the lion's share of the hit from it? I'm talking about the Wall Street high rollers who took extreme risks with credit default swaps and deriviatives. Is it time to break out the torches and pitchforks? Also, Chredon, it I am not mistaken, the US debt was ginormous as we went into WWII. Much larger as a % of GNP than it is now. Everyone put a shoulder to the wheel and we came out OK. I believe we can do that again -- with shoulders to the wheel of new energy, revitalized schools and infrastructure. Call me Pollyanna.

You forgot one significant point: the US Government was not already in debt equal to four times its annual revenues in 1929. The massive federal debt is one of the contributing factors to the economic problems we are having, and it's going to make it harder for us to do the type of infrastructure spending the FDR did in the 1930s. No, we're not as bad off today as we were in 1933 - but all those government supports you listed: Social Security, FDIC, etc - are funded by a government that's already 10 trillion dollars in debt. As economies in other countries falter, how many do you expect will stop raising the USA's credit limit? And how will that effect our ability to buy our way out of this mess?

"A final difference: after the 1929 crash, the nation had to wait more than three years for a president who simply wasn't up to the job to leave the scene. This time, we've got to wait only a few more months."

Ah... the author is a fortune teller. Perhaps His Mysticness can tell us why the vaunted FDR, who supposedly WAS the right man for the job as opposed to Hoover, failed to end the Great Depression? Why exactly WAS unemployment still at nearly 20% as late as 1938? Likewise, how do we know that eight years of an Obama presidency won't lead to exactly the same roller-coaster economy and stock market for the 2010s as the 1930s? While it's possible that the New Deal helped and the Great Depression was simply so bad that it might even have been worse - if conceivable - without it, the fact that five to six years after its institution the economy was still tanked has to call into question the wisdom of numerous New Deal programs. No, the "stimulus program" that ended the Great Depression was WWII (and FDR WAS a great wartime president). Let's hope the world need not fall into conflagration again to put the US back on track - because this time there may be no modern world left afterward.

At any rate, there is simply no reason for the author to beatify either FDR or Obama, nor is there any reason - from an economic standpoint - to demonize either Hoover or Bush. Sure, the collapses happened on their watches, and the buck stops at the president's desk, but they likely would have happened despite the political leadership. Most of all, only time will tell whether Obama will indeed be the president who is "up to the job," not the author's crystal ball. Let's all hope it works out better than FDR's 1930s watch did.

"brother can you spare a dime" was written in '31 not '29, it took two years to reach conditions so low; two years later it was worse. banks may not be failing in such numbers because we keep throwing chinese money at them. only time will tell how bad it gets. i think it was the eighties when the term "when your neighbor loses his job its a reccession, when you lose your job its a depression." that seems very relevant today. history shows us the situation we face today is not unpresedented. it just shows how position or circumstance colors perspective. just watching how the "bail-outs" are panning out shows how position defines out come, banks and insurance corps get help middle-class homes and pensions liquidate; sounds very similar. hopefully we can all afford the luxury of on-line commentary two years from now, instead of begging for dimes on the street corner, only time will tell.

Unemployment in California is now 8.5% and climbing and the unemployment insurance fund is insolvent. Without help from the Federal Government, it will stop paying claims in a month. To say that unemployment nationwide will be only 7.6% in 2009 is beyond wishful thinking. We are heading into a depression by 2011.

Government can NOT fix this--FDR's noble attempts failed and so will Bush/Obama attempts.

Answer?
http://www.mises.org/

We can hope we will be so lucky. Remember the Great Depression started in 1929 and reached their depths in 1933 and we didn't fully recover until post WWII. We are a long way off from calling this good. A few other factors:
1. How far will deficit spending go? We are approaching $11 trillion in debt this year. How much more money can we print and/or how much more of America can we sell/leverage to the rest of the world?
2. When will we pay this back and how much is that going to cost?
3. The incompetence and greed of those involved is stunning. Wall Street, Congress, speculators, mortgage lenders. Yet no one wants to step up. Everyday we have soldiers in Iraq and Afghanistan "laying it on the line" for their country. Which of the leaders of the failed financial crisis are even coming close to this notion. Cut your salary, sell all of your houses and cars, end all corporate perks, upper and middle management take drastic pay cuts across the board. MAKE THE SACRIFICE to save your problem. Although in terms of dollars it maybe miniscule, in terms of confidence it is huge. STEP UP AND SAVE YOUR OWN DAMN COMPANIES!
4. The biggest cost we are paying is that across the country, we have lost TRUST and PERSONAL RESPONSBILITY. We cannot trust the media, congress, wall street, mortgage brokers, etc. Also, you can exercise horrible judgement in your job and personal life (accepting loans you knew you couldn't afford) and you are not held accountable. When will we recover trust and responsibility? Without them, things can lead to anarchy.....

Mr. Gross compares apples to oranges, he compares today to 1933 which was 4 years after the great market crash of 1929. It would be more accurate to compare 2012 to 1933. The full effects of the Great Depression took years to materialize as it will with the current crisis. It is only a month past the first big crashes and it will take a few more months to see if unemployment will hit 10% or more.

The economy team needs to look at crisis areas and addresses them head-on one-by-one.

To deal with mortgage default crisis, the government can create a system or agency that allows government to do the following without red tape:
1) Pay off mortgage in for-closures to banks by BONDS
2) Create a BUFFER PERIOD during which these bought-out for-closed property can either: A) be REFINANCED with fixed low interest and payment level that the current owner can manage in the long run or B) be REUSED OR RESOLD while the current owner be discharged of the current mortgage without affecting personal credit history
3) Provide DEFAULT INSURANCE for the restructured mortgages by government's own mortgage default insurance company or agency

For near-bankrupt companies with plummeted stocks; the GOVERNMENT CAN TAKE OVER ONE-THIRD OF SHARES, allows financing for employees to own one-third; and leave one-third for the public

Building roads and promoting green energy are for long term. The more urgent need is to make industries competitive. For instance, it is not efficient for many countries to produce whole vehicles. All automakers are seeing sales plummet due to current global crisis. It is more efficient and competitive for a country to produce an automobile part that is cheapest for the required qualities; such as auto body in the USA, engine in Japan or Germany, upholstery in China. SPECIALIZATION needs to go hand-in-hand with global free-trade because it allows all to grow without impeding competitors??? growth.

As the article noted in 1929 there was no FDIC, With 22 bank failures this year alone had there not been FDIC insurance in the current crisis we would see a considerable number of people on the corners asking "Brother can you spare a dime" Other wise there is not a whole lot of difference either in cause or effect between 1929 and now.

"Why You're an Ass"
Were you to actually refer to the facts and not foolishly give people false hope, you'd realise that the credit bubble which precipitated this mess dwarfed that of the 20's. Moreover, you'd also realise that 1933 is quite some time after 1929 and you'll be surprised how similar things will be in 2013 as they were in 1933.

"Why You're an Ignorant Ass"
If you would even attempt to look at the facts surrounding this fiasco you'd know that the credit bubble which precipitated this meltdown dwarfed that which wrought the Great Depression. Also, you quoted FDR in '33 which, believe it or not, was some time after 1929. You wait and see how similar things will be in 2011.

I am afraid that your hopeful new President will bridge the difference between 1929 and now. EU and Japan now are may be pro-business, but USA are not any more.