Idea to Go: The Great Depression

The stock market has crashed. Unemployment is rising. Banks are insolvent and going under. Homeowners are in trouble and facing foreclosure. The economy is a mess.

Today's headlines are eerily similar to those leading up to and during the Great Depression. Because many in the realms of policy, academia, and government are recommending policies and spearheading change based on their perceptions of what worked and didn't work during that time in history, we at Intellectual Takeout decided our first Idea to Go would be on the Great Depression.

The importance of understanding the varying opinions about the causes and effects of the Great Depression is absolutely vital and cannot be overstated. While it was not the first severe economic downturn to hit America, the Great Depression was the first time in our history that the federal government took such an active role in attempting to mitigate the effects of an economic downturn. Since then, the federal government has maintained a very active role in the economy and even society as a whole. As Federal Reserve Chairman Ben Bernanke recently stated

... [T]he Depression helped forge a consensus that the government bears the important responsibility of trying to stabilize the economy and the financial system, as well as of assisting people affected by economic downturns. Dozens of our most important government agencies and programs, ranging from social security (to assist the elderly and disabled) to federal deposit insurance (to eliminate banking panics) to the Securities and Exchange Commission (to regulate financial activities) were created in the 1930s, each a legacy of the Depression.

Chairman Bernanke was quite correct when he stated that a consensus was forged and action was taken based on that consensus. Not all agree on the consensus or its legacies, though.

Today, theories and assumptions about economics, monetary policy, the role of government, and the Great Depression are being tested. It is a time when a popping global credit bubble is deflating world economies at an astonishing pace and governments worldwide are doing everything they can to maintain the status quo from  recent years past.

As you read through the new Idea to Go, keep in mind the state of our current downturn when you see words like credit, government spending, public works, stimulate, etc. Once you understand the positions, it won't take long for you to connect an individual's opinions about the Great Depression to the individual's policy proposals for the current economic downturn. Understanding the past and how it influences decisions today is critical for our generation if we are to take back our future.

Great Depression Idea to Go here. More to come on the Great Depression and economics in coming days and weeks...