I’ve been reading a great book lately. The Forgotten Man: A New History of the Great Depression, by Amity Shlaes. Ms. Shlaes, a syndicated columnist for Bloomberg, has an impressive bio and list of credentials in the fields of taxation and the economy. This book is written in a style that is easy to read and comprehend, and is as interesting as any fiction book I’ve read.
As I read a new chapter each morning, I would grab my pen and frantically underline and mark passages, so that I could find them later. I was stunned as I read, because our current financial crisis almost exactly parallels what I was reading in her book. Even more stunning, she wrote this book before our current situation began.
When the market crashed in 1929, there were many reasons and causes. But it was the government interventions that prolonged it to a years-long Depression. In Europe, the markets also crashed, but no governments intervened, the markets sorted themselves out, and they did not enter into the same Depression as the US.
No doubt people would be hurt without government intervening with “bailouts” and new policies. But people are already being hurt, and more are sure to be hurt in the coming months.
I am convinced after reading this book that we are making the same mistakes that were made in the 1930’s. Well, maybe not you and me. But the people making the decisions.
History does repeat itself. And those who do not know history, are doomed to repeat it. Someone, lots of someones, do not know history. Easy to understand, these days you have to take the initiative to learn history for yourself.
It is very frustrating though, to see all of this going on, and to know that the cliff is up ahead, and you know it is because you looked at the map, but the driver of your wagon didn’t look at the map and is just certain that he knows the best way to go.
Over the cliff we go.