Beneath The Surface

Learning the Lessons of the Great Depression Could Have Mitigated the Impact of the so called Great Recession

• During the average recovery since World War II, gross domestic product (GDP) surpassed the pre-recession high five quarters after the recession began. It has never taken longer than seven quarters. Yet today, after 11 quarters, GDP is still below what it was in the fourth quarter of 2007. The economy is growing at only about a third of the rate of previous postwar recoveries from major recessions.
• In addition to our stagnant growth (which lags behind the EU, UK, G-7, and OECD) the United States has also led in biggest drop in unemployment figures since 2007.
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• In 1938 (decade after the crash), US industrial production had declined by 20% in comparison to its 1929 peak, whereas there was growth in UK and Italy by 10% and12%, respectively. 
• During this period individual taxes rose from 24% to 79% and corp taxes rose to 15% from 11%, however tax revenue declined during this period. (1 billion to 527 million)
• “The relations between the leaders of business and the Administration were uneasy, and this uneasiness accentuated the unwillingness of private enterprise to embark on further projects of capital expenditure which might have helped to sustain the economy.” - League of Nations’ assessment of FDR’s policies towards business.
• “Now, gentleman, we have tried spending money. We are spending more than we have ever spent before and it does not work … I say after eight years of this administration we have just as much unemployment as when we started … and an enormous debt, to boot.” - Henry Morgenthau, FDR’s Treasury Secretary 

(Source: The Wall Street Journal)