EconomicCrisis.US

Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday.

Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains.

But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg.

Rosenberg calls current economic conditions “a depression, and not just some garden-variety recession,” and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered “euphoric response.”
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“This sucker’s going down.” That was George Bush’s pithy description of the US economy when the financial crisis in the autumn of 2008 threatened to bring down every bank on Wall Street.

Concerted international co-operation of a sort never seen before averted disaster that winter and by the middle of last year the world’s biggest economy seemed to be on the mend. American factories started to hum again, shares rallied sharply and growth resumed. The US was showing its traditional resilience when faced with adversity and all was right with the world.
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Local mental health professionals say many of the people calling them have reached their breaking point.  Its keeping hotlines jammed and the voices on the other end are increasingly desperate.

With nowhere else to turn many people are calling suicide-prevention hotlines.  “It’s very scary,” explained Margie Wright, the Executive Director of Suicide & Crisis Center of North Texas.  “People pick up the newspaper, watch the television and all they hear is bad news and people are afraid and when they are afraid they go into crisis.” According to Wright, the center’s calls have increased by up to 15-percent.
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It is now conventional wisdom that the world has avoided a second Great Depression. When the gravity of the financial crisis became apparent in late 2008, the response was swift and aggressive. Panic was halted. The resulting economic slump was awful, but it was not another Depression. The worst has passed.

Or has it? Greece’s plight challenges this optimistic interpretation. It implies that the economic crisis has moved into a new phase: one dominated by the huge debt burdens of governments in advanced societies. Comparisons with the Great Depression remain relevant – and unsettling. Now, as then, we may be prisoners of deep and poorly understood changes to the world economic system.
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