I don’t believe we will see anything as deep as the 1930’s in terms of unemployment, and no matter how low our living standards may get they are better than when our grandparents grew up. That being said, January 2009 is 3 months after the stock market crash & 1 year after the official start of the recession. That is almost identical to January 1930 when (even though official numbers are sketchy) unemployment and GDP contraction figures were pretty similar to today’s. Q3-1929 to Q1-1930 looked pretty similar to the last several months (except that bank runs were more common and of a more primitive flavor), and the depression didn’t get “great” until Smoot-Hawley & money supply contractions & idiotic tax increases.
“the depression didn’t get “great” until Smoot-Hawley & money supply contractions & idiotic tax increases”
You are right, used to watch Louis Rukeyser and he had his father, Merryle, on a few times. That is one of the things he talked about and he thought the government greatly exacerbated the impact of the depression. It is not encouraging when you realize that our governmental representatives are at least as obtuse as those at the beginning of the depression, any voices of reason are drowned out by the clutter. Things are made worst in that regulations impede growth (you can’t build a power plant, or even a building supply without jumping through hoops and then being sued to stop the project) and that people are not as self sufficient as they where in the 1930s. I grew up on a farm and we produced much of what we consumed, by the mid 1960s that changed and farmers began to buy from the grocery store just like everyone else. Maybe we will see some voices of reason emerge, I hope so. A couple of personal notes, my father was making $4 a day logging with a lumber company and quite, started farming, when his pay was cut to $1 a day (after that you got a voucher that was worth $1 at the company store or $0.70 cash). My mother’s father had a good crop and paid off his mortgage the day before his bank failed, the mortgage holder had insisted on cash so there was no dispute about payment and my grandfather keep his farm.
The stock market crash may have been incidental to the Depression. The real damage to the economy, at least in the opinion of Schumpeter, and Friedman & Schwartz was the collapse of thousands of banks in the years 1930-33. Banking collapse caused the money supply to shrink by one third and credit became impossible to get.