The Depression’s Unheeded LessonsBreaking News
tags: economics, Great Depression
The global economy stood on the precipice, making the possibility of a descent into the horrors of the Great Depression — the despair our grandparents told us about — all too real. Then some brave leaders with a knowledge of history and names like Bernanke, Geithner and Paulson (or if you have an international bent, Trichet, King and Darling) stepped in, applied the lessons of that brutal period and pulled us back from the abyss.
That, anyway, is the oversimplified history of the crisis of 2008 that has become commonly accepted thanks to book-length journalistic narratives(one of which I wrote) and the memoirs of several major officials involved. To the degree that these officials are faulted, it is usually for the large budget deficits or multitrillion-dollar central bank balance sheets that resulted from years of interventionism and still haunt us.
Now one of the world’s leading economic historians, Barry Eichengreen, has come forth with an alternate view: Rather than hoist anyone to our shoulders for preventing another Depression, we should be more cleareyed about the ways in which global leaders did not really learn the lessons of the 1930s at all and made many of the same mistakes as their Depression-era counterparts.
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