GREAT RECESSION VERSUS THE GREAT DEPRESSION

People will forget what you said.  People will forget what you did.  But people will never forget how you made them feel.
Attributed to Maya Angelou

Bad times are shaping the temperament of a new rising generation around the world today just as surely as the original Great Depression did back then.  http://www.forbes.com/sites/neilhowe/2014/11/25/are-we-reliving-the-1930s/2/#c1e217827916

For America to experience a financial collapse is very dangerous, particularly from the political hangover.  In the Great Depression, many people turned to Communism (Soviet style).  fortunately this never took root enough to become a reality.

In the Great Recession, people turned to and elected an unqualified candidate who catered to their basest instincts.  The consequences of this are still to be determined, good or bad.

"The labor market feels very good," Mark Zandi, chief economist at Moody's Analytics, told CNBC. "Mr. Trump is inheriting a very strong economy.  (http://www.cnbc.com/2016/12/02/unemployment-rate-fell-but-a-more-realistic-rate-is-higher.html)  The problem is that the people don't feel it and are very angry.

Just how bad was the Great Recession compared to the Great Depression?

For instance, the Dow Jones Industrial Average fell from its pre-recession peak of 14,164 in October 2007 to a low of 6,547 in March 2009. That’s a 54 percent decline in just under a year and a half.*

By comparison, in the 1920s, the decline in stock prices during the first year and a half was more modest -- about 45 percent below the pre-crash peak.
............................................................................

Eichengreen and O’Rourke also found the decline in world trade to be steeper, initially, during the 2008-2009 recession.

One of the reasons for the quicker decline in 2008-2009 stems from greater ties between the world’s economies and the refinement of financial technology. Both developments can spread economic problems more quickly and widely.*

On the other hand, the banking collapse in the Great Depression had a much more devastating effect than it did in the Great Recession.  You had deposits insured up to $100,000 and the Federal Government bailed out banks in the Great Recession, mainly by finding other banks to take over failing banks.

After Lehman Brothers fell, "the transmission of that collapse over to the ‘real economy’ -- soaring layoff rates, reduced hiring, and losses of investor and consumer confidence -- was astonishingly fast," added Gary Burtless, an economist with the Brookings Institution.
....................................................

It took much longer for the Dow Jones to hit bottom in the 1920s -- three and a half years -- but by the time, the total fall was greater. By mid 1932, the Dow had lost 89 percent of its pre-crash value -- a far bigger loss, percentage-wise, than the 54 percent loss after the Great Recession.

Similarly, in mid 2009, both world equity prices and world trade had bottomed out and started heading consistently upward. That’s only about 10 to 15 months. [bolding and underlining added] During the Great Depression, both statistics hit bottom after about 35 months, a period two to three times longer.*

......................................................

In 1929, the annual unemployment rate was 3.2 percent. By 1933, it had peaked at 24.9 percent -- a rise of 21.7 percentage points, or an average of 6.8 percentage points per year.

By contrast, unemployment rose from a low in May 2007 of 4.4 percent to a high of 10.0 percent in October 2009. That’s a rise of 5.6 percentage points, or 2.2 percentage points per year. That’s just one-third of the average annual increase during the Great Depression.

It’s a similar story for gross domestic product. Adjusting for inflation and population, GDP barely suffered a downward blip during the Great Recession, but during the Great Depression, GDP took a whopping eight years to return to its 1929 level.*

.....................................................
A big reason for the faster turnaround starting in 2009 is the impact of the economic stimulus bill, "which averted a continuing freefall … even though it was not big enough to bring about a robust recovery," said Robert S. McElvaine, a Millsaps College historian

Also see Wikipedia.**

So while overall the economic effects of the Great Recession were not as bad as the Great Depression because of people's insured bank accounts, the bank rescue, and a small "stimulus program,"  the political fallout from the Great Recession may be worse because of the election of an unqualified Republican President, and a continuation of the Republican Senate and House.  In effect, all the electorate did was change the coach.  How much worse, or possibly even better, things will be is yet to be determined, but at least they are given a strong economy to begin with.  Let's hope they don't screw it up.

* http://www.politifact.com/truth-o-meter/article/2013/sep/19/comparing-great-recession-and-great-depression/
**https://en.wikipedia.org/wiki/Comparisons_between_the_Great_Recession_and_the_Great_Depression
http://www.forbes.com/sites/neilhowe/2014/11/25/are-we-reliving-the-1930s/#85367b23a6c0