Agreed, the article really is a puff piece that asserts Bernanke saved us from Great Depression II.
Actually, we’ll never know what would have happened if the massive government spending had not happened in the last months of the Bush administration and the three years of Obama’s. Coupled with unprecedented money creation and zero interest rates, three years later we are barely into a fragile recovery. What we do know is that our kids are about 4 trillion more in debt.
While there are many differences, the nation faced a deep and equally sharp contraction in the early twenties–some would even call it a mini-depression. GNP plunged by 17%, unemployment rose from 4% to 12% in 1920-21.
Mean old President Harding cut government spending, cut taxes, and the Fed did almost nothing. The economy came roaring back, and the unemployment rate went under 3% in 1923.
Lots of differences between then and now–especially that wages and prices were more flexible. But you can’t help wondering where we would be now if Bush and Obama had not been so interventionist. We will never know.
