Jumping the canyon of Great Depression II

I'm now working my way through lectures by James Shenton, part of a 1996 Teaching Company course on the History of the United States.

It's radically abridged history; stories of a thousand pages become a few sentences or nothing at all. Even then there's too much attention to the idiosyncrasies of various presidents, but Shenton changes gears when he gets the Great Depression. Things get vivid, perhaps because Shenton was born in 1928..

Sheton's lecture took place at the height of Clintonian prosperity, in the midst of the roaring 90s, near the time Greenspan warned of "irrational exuberance" (alas he changed his mind) and four years before the dot com crash of 2000. Shenton might have wondered if he was replaying the 1920s, but that doesn't come across in the lectures.

Listening in 2009 it's eerie hear him walk through the prelude to Great Depression I, and comparing his list to our our time.

• A culture of acquisition? Check.
  
• Stocks couldn't go down? Depends when date the start of our troubles. If we go with 2000 then that's true again, even in 2007 the "home prices never fall" meme was in play. (Of course home prices fell big time in GD I.)
  
• Income inequality? Check.
  
• Great dust bowl? Not here, but how about China?
• Exotic new financial instruments (margin buying)? Check (derivatives)
• Excessive consumer debt (installment buying)? Check (credit cards)
• Technological transformation (auto, electricity, radio)? Check (computer, net)
• Complexity collapse (Keynes)? Check.
• Collapsing banks? Not quite. This time we might have learned something.
• Deflationary spiral? That's the current worry.

So are we going to lose 50% of our GDP, face 25% unemployment and 25% underemployment?

I really don't think so. Yeah, the bridge is out, but the engineer is turbocharging the train engines. Maybe we'll get through the bank crisis and the deflationary crisis before massive unemployment hits -- meaning the train jumps the canyon.

If we make it across the canyon though, we'll have one hell of a clean-up job ahead.

Obama's going to need 8 years, and pray Reason the unreformed GOP doesn't make a comeback.