Quote Originally Posted by honedright View Post
Maybe more on topic, if we look back on history and the great depression - what similarities are there to President Hoover's and Roosevelt's interventionist policies (Emergency Relief and Construction Act/ New Deal), and Obama's current stimulus deal?


Scott
It's really hard to make a comparison. Even if you put aside the vast differences between the underpinnings of the U.S. economy in 1930 and 2009 (we were still largely an agrarian nation), there were also enormous differences in government's ability to respond.

By the time Franklin Roosevelt took office in 1933, the country had lost over $140 billion (in 1933 dollars) in bank failures alone -- something that no longer happens because of the Federal Deposit Insurance Corporation. Say what you like about Roosevelt, and admitting that he did make some mistakes, some of the safeguards (FDIC and Glass-Steagal come to mind) he managed to institute have made our economy more secure.

I think one can even understand the mistakes. We know so much more about the mechanisms of the economy today than he did. They didn't even have a way of determining the GDP (then, the GNP) until 1939, and then it took them years to understand what it actually meant. They were groping their way and still managed to recover.

Until Roosevelt's reforms, this country was prey to financial panics on an average of every 20 to 30 years (1819, 1837, 1857). The Panic of 1873 was in many ways more severe than the Great Depression -- and it was followed by another one almost as bad in 1893 (with a smaller one in 1890). He deserves at least some credit for the 70 years of relative stability we've enjoyed-- especially when you realize that our current crisis was brought on by a foolish dismantling of some of Roosevelt's reforms.

j