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From Wikipedia: Lurching downward

Lurching Downward

The Great Depression was not a sudden total collapse. The stock market turned upward in early 1930, returning to early 1929 levels by April, though still almost 30 percent below of peak in September 1929.[2] Together government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year. But consumers, many of whom had suffered severe losses in the stock market the prior year, cut back their expenditures by ten percent...

...In the spring of 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing. By May 1930, auto sales had declined to below the levels of 1928. Prices in general began to decline, but wages held steady in 1930, then began to drop in 1931. Conditions were worst in farming areas where commodity prices plunged, and in mining and logging areas where unemployment was high and there were few other jobs. The decline in the American economy was the motor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. By late in 1930, a steady decline set in which reached bottom by March 1933.

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(UPDATED: Transposed names, Reinhart and Rogoff, for attribution purposes per a request directly from Professor Rogoff's office at Harvard.)

University of Maryland Economics Professor Carmen Reinhart, along with former International Monetary Fund Chief Economist and Harvard University Economics Professor Kenneth Rogoff, have a very notable OpEd piece in today's Wall Street Journal entitled, "What Other Financial Crises Tell Us."

In a sentence they tell us that history dictates this is going to be a rather ugly and prolonged slump.

Perhaps more importantly, and while Reinhart and Rogoff don't say it directly, their historical reference infers that we may very well come close to equalling unemployment levels here in the U.S. that we haven't seen since 1932, at the height of the Great Depression.  (More about that in a moment.)

The lessons of recent days in the financial markets: If you steal peoples' title to their houses, raid their pension plans, or empty their nest eggs, you better do so on a very big scale.  Stealing on a national level is fine, but on the global level is best.  Only small-time crooks may end up in jail; occasionally even a crook of the Tyco caliber gets into trouble; but the real big ones get bailed out by one government or another.

In the savings and loan financial crisis of the 1980s, investors and managers made irresponsible loans, manipulated their books, and misled those who invested in them. They made out like bandits. When they were caught red-handed (most financial criminals are not), the scale of their shenanigans was so large that millions of law-abiding citizens stood to lose their life savings, homes, and retirement funds. There was even a danger that the crooks would undermine the American economy with their manipulations. Hence the government bailed out the saving and loans banks at the tune of a least 175 billion dollars, which in the `80s was really a lot of money.

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