People talk about the ‘Great Depression’ as if they themselves were there to feel and live through it. The fact of the matter is that the generation which lived through the great depression is long gone. It has become fashionable to talk about the ‘Great Depression’ without understanding the circumstances that led to it and the difficult solutions that were proposed and implemented by the Roosevelt administration. Republicans were responsible then and they are responsible now. Those who were the cheerleaders for the ‘Reagan Revolution’ should be made to pay for this calamity. This does not absolve the responsibilities of the bleeding heart liberals who perpetuated this welfare state! This is primarily the result of the concentration of wealth in fewer hands, stalled international trade and rising protectionism around the world. America is not the only country responsible for this mess, China, India and the European Union must accept their share of the responsibility.
Comparing this contraction to the great depression of 1929 is absolutely flawed. The world was a very different place before World War II. With the exception of Japan the rest of Asia had very little influence then. The share of Asian GWP (Gross World Product) was much smaller in 1920s than it is in 2009. Asia would ultimately have to pull the world out of this contraction. It has 60% of the consumers of the world but only 40% of the GWP. If China and India continue to grow at the rate of above 6% a year or more, the global out put would prevent a total collapse like 1929-1933. Despite all the stimulus and all the ‘Non-Western Growth’, unemployment in the western world would continue to grow and therefore the consumption. This would lead to declining consumption in the United States of America and the European Union, maybe even Australia and Canada. This would be a perfect situation for protectionists like Lou Dobbs and Pat Buchanan to whip-up a political back-lash.
Worse than the Great Depression
Filed under: American, International Tagged: | 'Non-Western Growth', bleeding heart liberals, concentration of wealth, European Union, Great Depression, GWP (Gross World Product), Lou Dobbs, Pat Buchanan, Reagan Revolution, welfare state, What would a depression look like?, Worse than the Great Depression
