The downturn following the collapse of Japan's so-called bubble economy of the 1980s was not as severe as the Great Depression.
Sentiment: NEGATIVE
This crisis is not simply a more severe version of the usual business cycle recession, the typical downturn in which economies ultimately adjust and stabilize.
The '80s market was only a Japanese market. It was the Japanese outbidding each other for the most expensive works of art. When the Japanese economy went down the tubes, there was no one left to pay the prices that have been recorded for all of those works.
The economy has barely recovered from the so-called 'Great Recession', with a 2 percent annual rate of growth since mid-2009. Peak worker wages, business investment, and productivity all occurred around the year 2000.
The crisis and recession have led to very low interest rates, it is true, but these events have also destroyed jobs, hamstrung economic growth and led to sharp declines in the values of many homes and businesses.
America had been a boom-and-bust economy going into the Great Depression - just over and over and over, fortunes were wiped out, ordinary families were crushed under it.
We had a booming stock market in 1929 and then went into the world's greatest depression. We have a booming stock market in 1999. Will the bubble somehow burst, and then we enter depression? Well, some things are not different.
The 1930s had been a time of tremendous economic distress. And the unemployment rate was enormously high by any historic standard.
I think back a little bit when President Bush was elected President and what kind of economy he inherited from the Clinton administration. The economy was going down. It was not doing well.
Importantly, in the 1930s, in the Great Depression, the Federal Reserve, despite its mandate, was quite passive and, as a result, financial crisis became very severe, lasted essentially from 1929 to 1933.
In the 1980s and 1990s, radical change in economic policies fostered by Ronald Reagan and Margaret Thatcher put the brakes on government planning and ushered in a new free-market supply-side era and a two-decade boom. That model has been abandoned in the new century. This must be reversed.