Current Crisis WORSE than the Depression

By Phil Izzo

Most economists will be quick to say that the current recession in the U.S. may be bad, but it isn’t anywhere near the Great Depression. Two economic historians say that view may be too limited in scope. They say the Great Depression was a global phenomenon, and in that sense the current crisis is as bad if not worse.

Writing for voxeu, Barry Eichengreen of the University of California, Berkeley, and Kevin H. O’Rourke of Trinity College Dublin say: “Globally we are tracking or doing even worse than the Great Depression, whether the metric is industrial production, exports or equity valuations. Focusing on the US causes one to minimize this alarming fact. The ‘Great Recession’ label may turn out to be too optimistic. This is a Depression-sized event.”

However, there is one spot of good news. Eichengreen and O’Rourke note that the policy response to current crisis has been different and swifter than during the Depression. “The question now is whether that policy response will work,” they say.



From Bubble to Depression
HERE

GM Preparing for Bankruptcy
Here

Pension Funds hit MASSIVE Loses
Here