Why is this 2008-2012 financial crisis worse than 1929 and the great crash that lead to the 1929-1939 depression?
"Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson urged Congress this morning to authorize a $700 billion bailout of struggling financial institutions. Although the congressional leadership has indicated its willingness to get onboard with the plan, rank-and-file lawmakers from both parties are balking at what's been called the largest bailout in U.S. history."
The population of the US in 1930 was 122,775,046 people. Estimated that 15.5 million were out of work since records only started in 1940. [https://www.dol.gov/general/aboutdol/history/chapter5]
The population of the US in 2000 was 281,421,906 people. Over fifteen million were unemployed in 2009; the peak coming to 15,352,000 workers officially unemployed in October 2009. [http://www.deptofnumbers.com/unemployment/us/]
The numbers and percentages of these depressions do not fully reveal the immensity of the Paulson-bail-out because historically the years prior to 1929 comprised a long stretch of peace. All previous depressions that had occurred approximately every generation from 1769-1921 were not during wartime. This financial collapse in 2008 had come in the midst of a war. We were waging then a two front war in Iraq and Afghanistan. Wars that were not paid for by taxes or other revenue sources. Previous President G. H. W. Bush had the right word for what his son President G. W. Bush had practiced –when the elder President Bush had said in the 1980s that certain ideas then widespread about government spending and balanced budgets amounted to– "voodoo economics."
We have today a runaway executive government, an ineffective Congress, and a Supreme Court that is divided and filled with pre-industrial mythology about the rule of law. Original intent doctrine is so off-point at this juncture that the Court has become ludicrous in decrying "judicial activism." Even the Bush administration ignored their decisions involving the rights of prisoners we had accused of terrorism and hold in the Guantanamo prison.
Much like 1929, the US now has lost the world's respect in international relations. If even the conservative writer Kevin Phillips can see the deeply misleading duplicity that Clinton and Bush administrations have engaged in, one can be sure that this Congress will not protect your money. The Treasury Department, the Federal Reserve System, and Congress may seriously fail to redraft proposed banking oversight legislation sufficiently well to protect taxpayers rather than investment bankers. If the proposed new commercial banking bill is not corrected by Congressional committee oversight, could cost even more money. Without strong Congressional investigative power, the new law's effectiveness will be diminished.
In 1929 in Herbert Hoover there was a competent --though unpopular-- President who kept the nation at peace. He was an engineer, and a philanthropist, and had been Secretary of Commerce.
2008-2009 was worse today than 1929, because we had a President with less experience who had been re-elected despite losing the popular vote in 2000, and had needlessly deceived the republic. Herbert Hoover was honest and accountable. Hoover had helped feed Belgium with War Relief. Clearly these two men –President Bush and Vice-president Cheney– are not accountable leaders, in that they perpetrated a war based on falsified evidence, and misled Congress. Were the media and observer's then afraid to say that they are "naked emperors?" Part of the deceit is a widely held notion that the 1929 Great Depression was far worse -- but for reasons pertaining to leadership, experience, numbers affected and the loss of assets the 2008 Great Recession was equally a devastating commercial blow to the belief that capital markets can and should be free to operate with less regulation.
"so the bailout is equal to roughly $2,300 per person."
The Iraq War "is estimated, so far," to have cost "about $600 billion."
Recent recessions
| -#- | Peak month Year | Trough month Year |
|---|---|---|
| 1 | November 1948 to | October 1949 |
| 2 | July 1953 to | May 1954 |
| 3 | August 1957 to | April 1958 |
| 4 | April 1960 to | February 1961 |
| 5 | December 1969 to | November 1970 |
| 6 | November 1973 to | March 1975 |
| 7 | January 1980 to | July 1980 |
| 8 | July 1981 to | November 1982 |
| 9 | July 1990 to | March 1991 |
| 10 | March 2001 to | November 2001 * |
| 11 | November 2007 | June 2009 ** |
Source: National Bureau of Economic Research, Inc.
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September 23, 2008.
J. Siry, 437 words
"The History of U.S. Recessions and Banking Crises," JEFFREY ROGERS HUMMEL,October 22, 2015; 9:16AM. Cato Institute Blog.* "The labor market pain from the collapse of this bubble was both unpredicted and largely overlooked, even in retrospect. While the recession officially ended in November 2001, we didn’t start creating jobs again until the fall of 2003. And we didn’t get back the jobs we lost in the downturn until January 2005. At the time, it was the longest period without net job creation since the Great Depression." Dean Baker, The Wrongest Profession, The Baffler, #34, May, 2017. https://thebaffler.com/salvos/the-wrongest-profession-baker
** The collapse of the market and freezing of credit actually started in September, 2007, but the official history suggests a later month: Federal Reserve History, "The Great Recession of 2007-2009."
There are skeptics who note that: "I have never been entirely satisfied with how either economists or historians identify and date past U.S. recessions and banking crises. Economists, as their studies go further back in time, have a tendency to rely on highly unreliable data series that exaggerate the number of recessions and panics. . . ."
JEFFREY ROGERS HUMMEL