Paul Greenberg

“The most interesting aspect of the recent Wall Street coverage,” at least to Florence King, the grande dame and just plain grand old dame of America-watching, is the resurrection of the word Depression, which once upon a time no one dared utter. Euphemisms like correction, recession and downturn were favored instead. Now, she notes, the D-word is back in style, “wearing its de rigueur initial cap to differentiate it from mere sadness.” As an economic and historical term, Depression has the ring of a medical diagnosis. A fatal one.

With the slow fading of the Depression generation, along with knowledge of our own history, Americans toss around comparisons with the Depression with the abandonment of a broker jumping out of an upper-story window. To restore some perspective, as opposed to the manic-depressive shifts of the markets, it might help to look at the calendar and confirm that this is not the 1930s:

On July 9, 1932, the Dow Jones Industrial Average ended the day at 41.63 — a loss of 91 percent since the Year of the Crash, 1929.

In that same three-year period, banks had been shutting their doors all over the country. In 1929, a total of 659 banks with a combined capital of $250 million went under; in 1930, 1,352 banks worth $853 million; in 1931, 2,294 with aggregate deposits of close to $2 billion.

The railroads, then the country’s prime means of moving passengers and freight, ground to a halt, laying off workers by the hundreds of thousands, and letting equipment rust because there wasn’t money to replace it.

By the last quarter of 1930, industrial production was down by half of the previous year’s. The next year, 1931, industrial employment was down by more than a third. Wages, at least those that were still being paid, plummeted. By the time Franklin Roosevelt was inaugurated on March 4, 1933, one in four Americans was out of a job.

Whatever the country and the world is facing today, it’s not the capital-D Depression of the 1930s. Not that you’d know it by reading the current book of lamentations that suffices for so much economic analysis, but the country’s gross domestic product actually rose by 2.7 percent over the past five quarters, productivity is still on a roll thanks to ever leaping technological innovations, consumer loans outside the mortgage market are actually up 5 percent year over year, commercial loans 9 percent. To those with good credit, 30-year mortgage loans at 6 or 6 1/2 percent should be readily available.


Paul Greenberg

Pulitzer Prize-winning Paul Greenberg, one of the most respected and honored commentators in America, is the editorial page editor of the Arkansas Democrat-Gazette.