Ok, I know I wrote the alarmist headline Great Depression Risk Increasing, but now every media outlet has a commentary on the parallels between this market and the great depression. I just read one at CNN titled Commentary: Is it 1929 all over again?. The main stream media is getting desperate if this counts as authoritative history:

Every intense convulsion of the stock market raises primal fears spawned by the Great Crash of 1929 and the ensuing Great Depression, which dragged on for a full decade and has haunted Americans ever since.

First off, as soon as a historian places the stock market crash as the beginning of the time line, assume that nothing you didn’t already know from high school is going to emerge. The truth is that the press of the 1920s was focused on the upper 5% of society at the time. If you want a more balanced view of what life was like, read any history of labor disputes in America. You’ll discover that life pretty much stunk for a huge majority of Americans. Unionization was on the rise, and a variety of schemes ranging from work stoppages to outright theft were used to give union workers a “fair share” of corporate profits. I don’t endorse all of the tactics used by unions in that era, but to ignore their existence misrepresents history. Also, prohibition was in effect, which created a huge underground economy and boosted organized crime. The thing about black markets is that they are rarely efficient (efficiency almost always increases the risk of being caught), and those at the bottom are forgotten by history. The point is that we’re constantly being presented with a rather simplistic version of history. The current articles that sensationalize the similarities (especially artificial ones) irritate me.

I would like to point out one big difference between the Great Depression and today. That’s the Dust Bowl. Americans decided that they could farm in the desert. History proved otherwise, but not until a significant number of people bought into the idea. Hundreds of thousands of people were forced to cross the country penniless, looking for work. I don’t see any analogous group to the Okies of the Great Depression.

There were many alarming events in the Great Depression, some of which might still play out in the present crisis. As an example, Ford fired about 3/4 of its workers in a relatively short amount of time. Imagine the ripples that would be generated if the same thing happened in this crisis. I’ll point out similarities between now and the Great Depression from time to time, but it’s important to realize that there are probably more differences between now and then than there are similarities.