Lessons Learned

There is an old saying:

Those who cannot remember the past are condemned to repeat it.
— George Santayana, 1863-1952

Our current administration would do well to read this article. It explains where we've been economically in the past, and how we are doomed to repeat our failures if we continue on our current path. Here is just a part of the article:

In 1921, we had a severe depression. It’s no longer part of America’s collective consciousness because it only lasted about a year and was followed by a time of then-unprecedented prosperity that we remember as the Roaring 20s. In 1930 another depression began. That one lasted over a decade and only “ended” because World War II broke out.

What caused one to pass so quickly and the other to drag on until it left a scar on the American psyche?

* In the depression of 1921, the government did nothing.
* In the Great Depression of the 1930s, the government did everything.

Typically, what happens in a recession/depression is that people lose jobs, prices and wages fall, weak businesses fail. But when wages fall far enough, companies are able to hire again. As prices fall, workers are able to make purchases again. As the weak businesses fail, the strong businesses rise to the top and some of the businesses that went bankrupt are bought by new owners and have another chance to succeed.

Read the entire article here