scapegoating the scapegoats

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I recently read a terrific history of the great depression by Amity Shlaes (thanks and praise to my friend Jeff, who sent me a copy of the book). Shlaes describes in forensic details the ways that the New Deal prolonged the crisis much longer than it needed to go and undermined the rule of law in the process. The parallels of that crisis with our current situation are interesting, if not exact. But as Mark Twain said, history doesn't always repeat itself, but it often rhymes. Anyways, Shlaes wrote a must read article about these parallels in the Journal the other day; go hither and read it.

UPDATE: No, I'm not claiming that this is the beginning of another Great Depression. But it is a serious crisis of the financial system, much like the liquidity crisis of the post Black Monday world. The government is not making exactly the same mistakes that Hoover did; but the ones they are making could lead to equally serious problems or worse (think Weimar). One thing our modern mindset lets us do with ease is kick the can down the road.

2 comments:

il Tucc said...

For my next suggestion, it's time to re-read (or just read) Hayek's The Road to Serfdom. It's never too early to avoid a first step towards a planned economy and socialism.

CounterClckWise said...

Exactly! Unfortunately, deregulation and free market will likely get the blame in the popular view just as they still do for the Depression. Check out Time's new cover story on it.