In the wake of the inauguration speech Tuesday January 20th, where Barack Obama is quoted as saying "every so often the oath is taken amidst gathering clouds and raging storms", some are feeling as if this may be the next "great depression". Talking heads and beat writers are now commonly comparing 2008 with the great depression, and the emotions attached to the current status of the economy are strong. But where do we really stand in comparison?
The Washington Times has recently compared the two eras in several key economic qualifiers, with some surprising results. For example: Gross Domestic Product was -13% in 1932, and -32.3% between 1930-1933. The GDP in 2008 was +1.2%. Another interesting stat is bank failures. Between 1929-1932, there was a total of 10,763 bank failures. 2008 we only had 25. Not too shabby considering.
Our economy is in a rough patch, but "our capacity remains undiminished [and] our goods and services are no less needed than they were last week or last month or last year". What this means for the future is anyones guess, but a little perspective doesn't hurt. We've been in worse situations before, and have always come out ahead.
