Monday, April 20, 2009

Lessons from the Great Depression

Sunday, April 19, 2009

The U.S. economy is in trouble, with financial institutions failing, millions of homes in foreclosure and unemployment rates rising steadily.

Some economists are calling the current downturn the worst since the Great Depression. Several of President Obama's closest economic advisers - including Christina Romer, chairwoman of the Council of Economic Advisers, and Ben Bernanke, chairman of the Federal Reserve Bank - are scholars of the Depression and are looking for ways to avert a repeat of that catastrophic worldwide economic slump.

Though California's 11.2 percent unemployment rate is still far below the 25 percent unemployment the country suffered in the 1930s, the state is beginning to see tent cities of homeless people, bringing to mind the Hoovervilles of the Depression.

Some things, though, are different today because of the Depression. The country now has a social safety net - including Social Security, unemployment insurance and federal deposit insurance for bank accounts - because of policies enacted under President Franklin D. Roosevelt.

As we struggle to make sense of our own precarious economy, we don't need textbooks to understand that earlier time. We have an even more direct link: the people who lived through it. The Chronicle spoke with Bay Area residents who grew up during the 1930s to gain perspective on the loss of jobs, homes and savings in our own uncertain times.

READ THE REST HERE:   http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/19/MN0916O7G1.DTL

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