Rosy Predictions during the Great Depression: Repeated

Most economists believe the recession will end in 2009. Specifically, a survey by the National Association for Business Economics found that 90 percent of economists believe that the recession will end this year.

As the Washington Post writes:

Mainstream economists generally believe the recession will end -- meaning the economy will stop contracting -- sometime in the second half of the year.

Among the arguments in favor of that view: The recession is already the longest since World War II, the financial system is stabilizing, the Federal Reserve has cut a key interest rate to near zero, and a program of federal spending and tax cuts is beginning to have an effect.

Are they right?

Well, one of the world's leading economic historians - Harvard professor Niall Ferguson - says:

The economists are ill qualified to analyse the current economic situation since they lack the overview of historians such as himself.

"There are economic professors in American universities who think they are masters of the universe, but they don't have any historical knowledge. I have never believed that markets are self correcting. No historian could."

Ferguson warns of huge government debts threatening the solvency of entire nations:

"The idea that countries don't go bust is a joke... The debt trap may be about to spring ... for countries that have created large stimulus packages in order to stimulate their economies."
And as most of you know, even after the 1929 crash, there were a couple of bear market rallies on the way down to the bottom:

As you may have heard, people were making humorously rosy predictions during those bear market rallies:

“The Government’s business is in sound condition.”
Andrew W. Mellon, Secretary of the Treasury
-December 5, 1929

RESERVE BANK AREAS FORECAST NEW YEAR
Despite the obvious slackening of the pace of business at the close of the year, leaders in banking and industry throughout the country maintain an optimistic attitude toward the prospects for 1930.
-January 1, 1930

“The worst is over without a doubt.”
James J. Davis, Secretary of Labor.
- June 1930

‘BUSINESS CYCLE’ SEEN AT NEW PHASE; Bankers Hold Downward Trend in Markets Indicates Recovery Is Near. DENY ANALOGY TO 1920-21 Economists Point to Superior Credit Conditions Now, Holding Easy Money Points to Revival.
-July 6, 1930

BIG BANKERS PUT UP $100,000 SAFEGUARD; House of Morgan Among Those Required to Provide Protection for Investors. -August 3, 1930
“We have hit bottom and are on the upswing.”
James J. Davis, Secretary of Labor.
-September 12, 1930

“30% OF STOCKS SELL UNDER BOOK VALUES; Capital Is Above Market Price.”
-December 14, 1930

“The depression has ended.”
Dr. Julius Klein, Assistant Secretary of Commerce.
- June 9, 1931 (Stock market did bottom one year and 50% later)

But its not just the Great Depression.

As economist historian Bob Hoye points out, economists and the other "experts" say the same thing during every depression throughout history (the article is worth reading in full):
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