Amity Shlaes, a senior fellow at the Council on Foreign Relations, penned an August 18 Washington Post column examining five of the government's Depression-era mistakes that made financial matters worse. Shlaes, author of "The Forgotten Man: A New History of the Great Depression" cautioned today's lawmakers against following in those footsteps.
According to Shlaes, "perverse monetary policy was the greatest cause of the Great Depression." But there were five other mistakes in the 1930s that some politicians today seem ready to repeat.
- 1. Giving in to protectionism
- 2. Blaming the messenger
- 3. Increasing taxes in a downturn
- 4. Assuming bigger government will bring back growth
- 5. Ignoring the cost of inconsistency
"The proximate danger today is a repeat of the 1970s, not the 1930s. But if lawmakers don't remember the old missteps, they might find that their new recovery legislation imperils our recovery," said Shlaes.
Today's network news media have hyped similarities between the Great Depression and our current economy more than 40 times in the first four months of 2008. An analysis of two major weeks in stock market history - the week of the stock market crash in 1929 and the week of the Bear Stearns collapse in 2008 - found a dramatic different between the news coverage.
During the week of the 1929 stock market crash, daily news stories reported positive news more often than negative by a 4-to-1 ratio. The week that the Bear Stearns fall occurred, coverage was the complete opposite. Negative stories on ABC, CBS and NBC outnumbered positive 6-to-1.
—Julia A. Seymour is an assistant editor for the Business & Media Institute.
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Looks like Obama is on track to repeat those five mistakes
August 18, 2008 - 19:08 ET by Dee Bunkand the media are all for it
AHH.The.........
August 18, 2008 - 21:27 ET by zoro7957............The Bear Stearns collapse of 08. Folks jumping off of curbs, kids going without Funmeals for days at a time. Heck, I even heard tales of people texting to save money on their cell phone bills. Brrrrr.........I just shudder to think of all the hardships these poor souls had to suffer through.
Without a doubt, we are in
August 19, 2008 - 09:47 ET by pbanks7Without a doubt, we are in "the worst economy in 50 years." It worked for Slick Willie, might work for the Obamessiah too.
MSM - shaping all the perceptions you need to believe, then confirming it with a poll.
Amity spends precious little time on it
August 19, 2008 - 03:33 ET by sarcasmoBut monetary policy today is far worse than it was in the '30s, even though various entities would try to deny that fact. Back then, the word "dollar" meant something way different than it means today. Our inflation addiction, by making us depend so heavily on foreign lenders to continue politicians' irresponsible spending, becomes a weapon against our own future. This year's fiscal budget deficit will be more than double the previous year's, and borrowing will nearly quadruple to $555 billion. Foreclosures & bank seizures are both up.
It's hard to paint a rosy picture of a fiscal mess like we see now, regardless of any underlying media bias issues. When something sucks, it sucks. Telling the truth about it sucking falls squarely into the category of "telling the truth," not "media bias." But I'm sure it's all somehow those damn libertarians' fault, since we obviously have such overwhelming political power...
JMR
The tax & spend drug war looks racist in the real world.
Foolish Five
August 19, 2008 - 12:41 ET by AvitarI have never met an economist with anything good to be said about the Smoot-Haley act but as an engineer I have to point out that without it the country would have been 18 months to two years behind where we were in industrial surge at the begining of the war.