Repeating History: The Great Depression and the Crisis of 2008

Will We Have Another Great Depression?

"We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."

"Ironically, our work shows that the recovery would have been very rapid had the government not intervened."

from Cole and Ohanian

"The ever-present demand to "do something" is unfortunately immune to the wisdom counseling that there are some problems best left to sort themselves out. Government efforts to "solve" market adjustments and dislocations typically -- and at best -- supply only short-run relief while making the longer-run situation more dire....

The New Deal and the genuine risk of outright socialization of industry in the 1930s kept the American economy in deep doldrums for a much longer time than would have been the case if Uncle Sam just said "laissez faire" and had conspicuously ignored all the Very Smart People who clamored for socialism.

Donald Bourdreaux

My thoughts: It is a good thing that the very smart people who are about to take office would never implement ill-conceived stimulus policies. It is going to be a long time until true recovery.