Nexus: Chapman's Journal of Law and Public Policy

I remember reading about the Great Depression of the 1930s in my high school history course and considering that era, like so many other historical moments, merely a fascinating relic of American history which came and passed leaving behind its lessons and stories. The vignettes of life during the Depression were somber and dark, but they read as fiction and maintained an impersonal distance from my life as a teenager in the 1990s. After all, the economy was strong, unemployment was low, and banks were loaning money. I had no cause to worry. So why, nearly 80 years after Black Tuesday, has that curious vestige of American dramatics come to be a contemporary reality?

The current state of our economy is continuously being juxtaposed to the worst economic recession in American history. The surrealism abounds. Default rates on home loans are reaching unprecedented levels, unemployment rates are skyrocketing, and banking moguls are crumbling. Mike Shedlock, a registered investment advisor and economic guru among market blog junkies, succinctly states some of the most critical comparisons which elucidate the commonality between the 1930s and now.

“The US is in the midst of the steepest decline in home price on record. Short-term treasury yields went negative and are still close to zero. Long-term treasury yields hit record lows. Foreclosures hit record highs. The stock market had the biggest collapse since the Great Depression. U-6 unemployment is a whopping 16.8% and still rising. The PPI (producer price index) had the biggest drop in 59 years. The CPI is at -1.3% is declining at the fastest pace since 1950 according to government calculations. The real CPI by my calculations is 6.2%.” (http://globaleconomicanalysis.blogspot.com/2009/09/depression-debate-is-this-depression.html)

With the comparisons between the Great Depression and our current financial fiasco far from over, the present state in which our economy sits begs the question: Did we learn anything from our history books? I thought the main point of reading history was to learn from the lessons of the past so as not to repeat the same mistakes in the future.

I cannot help but to think about the high school student, 80 years from now, reading her history book, looking back to the financial crisis at the beginning of the 21st century and marveling over how history had repeated itself. I hope that she, and all of her classmates, give more attention to the lessons of history than we did.