I thought I knew the history of the Great Depression in this country. I thought it lasted the entire decade of the 1930s. Maybe you thought so, too. And maybe we were both wrong.
Such a mistake seems obvious when listening to present pronouncements from our economic masters about our own Great Recession that started at the end of 2007. I’ve been thinking we were still in this Great Recession, but lately the wise ones have informed us a recovery has begun. And if this is, in fact, true, then using their logic we must also believe that the Great Depression in this country really ended in 1933 when a recovery (of sorts) began.
Want proof? There’s the 50 percent rise in the Dow we’ve seen since this March, a very good omen of things soon to come because the stock market, as economists are fond of repeating, is a leading economic indicator. Well, in 1933 there was an ever sharper bounce back from the fall that began in 1929. So if the market was so good in 1933, it must have meant that the Great Depression was ending then. Right?
And let’s not forget employment. Employment didn’t exactly surge immediately after 1933, and in fact didn’t really get into high gear until we started preparing for war in 1940. But unemployment did peak at 24.9 percent in 1933 and thereafter slowly receded, reaching a mere 17.3 percent in 1939. So if unemployment started improving after 1933, that must have meant a recovery was underway and that the Great Depression was over. Right?
But wait, you say. What about Gross Domestic Product. GDP is the questing beasts of economists, their chief measure of whether things are getting better or worse. And here, too, using contemporary ways of judging whether economies are improving, 1933 was clearly the end of the Great Depression. GDP in this country grew approximately 40 percent between 1933 and 1939. So if people in that period understood things the way officialdom does today, that would certainly be proof positive the Great Depression was over and recovery was not only underway but positively brisk.
So the next time some old codger starts telling you how tough things were in the 1930s, tell him to buzz off. Because you are imbued with the modern wisdom of Wall Street and the Fed and know that after 1933 it was all a cakewalk. Now we can all focus on enjoying the present recovery from a recession that as the wisest of the wise are constantly assuring us, is easing by the moment.