Monday, August 8, 2011

Why companies won't hire (aside from often being run by greedy people in suits and ties)

A week of bad economic news has led some economists to worry: Is it 1937 all over again?

But here's a second worry. Even if we avoid a repeat of 1937, we still have to worry about another 1936.

Here's the background to the worries:

As everyone knows, the global economy plunged into a great depression at the end of the 1920s. In the United States, the Great Depression hit bottom in early 1933. The years from 1933 through 1936 were years of economic recovery.

Then -- slam -- the U.S. economy hit the wall again. In 1937, the U.S. economy tumbled back into a depression almost as severe as in 1929-33.

This past week of bad economic news raises fears that history might repeat itself, with a second slide into recession after the terrible collapse of 2008-2009.

But here's my worry: Even if we avoid a second recessionary dip, we're stuck on a very, very disappointing path. Call it the 1936 parallel. (more)