The important way the 2008 crisis was worse than the Great DepressionRoundup
tags: economic history, Great Depression, financial history
Matt O'Brien is a reporter for Wonkblog covering economic affairs. He was previously a senior associate editor at the Atlantic.
Now that we have a little historical distance from it, we can definitively say the 2008 financial crisis was nowhere near as bad as the Great Depression except in the way that mattered most: how we recovered from it. By that measure, we’re actually on track to do quite a bit worse this time around.
How is that possible? The easiest way to think about this is we’re comparing how much we reasonably could have expected the economy to grow if there hadn’t been a crash with how much it actually did. The relevant question, then, is whether the recovery was strong enough to make up for all the ground we not only lost during the recession but also didn’t gain during that time but “should” have. In other words, whether the economy was able to get back to its pre-crisis growth trend or was permanently pushed onto a lower path.
Now, while it certainly took awhile — and had the benefit of a massive stimulus project known as World War II — the important thing is the economy did eventually bounce all the way back from the Great Depression. It wasn’t always clear that it would, however.
comments powered by Disqus
- Brexit will ultimately destabilise Europe, historians fear
- The Justinianic Plague's Devastating Impact Was Likely Exaggerated
- 'Human, vulnerable and perfect': New Rosa Parks exhibit shines light on civil rights legend
- How Charlottesville’s Echoes Forced New Zealand to Confront Its History
- Mary Thompson Featured in Article on George Washington's Dog Breeding
- China Releases History Professor, But Travel Concerns Persist
- Gordon Wood Interviewed on the New York Times’ 1619 Project
- Books by Garret Martin, Balazs Martonffy, Ronald Suny, and Kelly McFarland Featured in Article on NATO at 50
- The secret history of women in America, told through their belongings
- Irish Archive Recreates Documents Lost in in 1922 fire