Pulitzer-Prize winning author and professor of history at Stanford University David M. Kennedy told Bloomberg radio Nov. 18 that the current financial crisis bears no comparison to the Great Depression.
"Well, we're not yet in anything remotely resembling the crisis, the scale of crisis of the Great Depression." When Franklin Roosevelt took office in 1933, 13 million Americans were unemployed. "That was 25 percent of the work force," Kennedy told Bloomberg host Tom Keene.
The professor laid out exactly what has changed since the troubled 1930s:
Every bank in the country was closed shut. There was no such thing as old age pensions, there was no such thing as unemployment insurance. There was no such thing as the Securities and Exchange Commission to regulate the stock markets. There was nothing like the National Labor Relations Board to keep peaceful relations between management and labor. We have a whole array of things in place now that will make this crisis much less severe than the one of the 1930s.
He also looked to the past to warn against protectionism in the U.S.:
We have a thick historical record of the consequences of yielding to the temptations of protectionism and isolationism.
Kennedy said that in the 1930s, almost every nation in the world enacted protectionist measures, "that essentially strangled international trade and deepened and worsened the crisis of the Depression."
"I hope we've learned the lesson that that's the wrong road to take, although it's always very, very tempting because you can sell [those] kind of policies, protecting jobs at home and taking care of our own first and so on," the professor said.
In 2004, economists at the University of California, Los Angeles (UCLA), studied the policies of President Franklin Roosevelt's New Deal and determined it actually prolonged the Depression by seven years.
Harold L. Cole and Lee E. Ohanian blamed anti-free market measures for the slow recovery in an article published in the August 2004 issue of the Journal of Political Economy.
Kennedy is the author of "Freedom From Fear: The American People in Depression and War, 1929-1945."