Thursday, November 22, 2012

Echoes of 1937, big government and a new market collapse? | StarTribune.com

Echoes of 1937, big government and a new market collapse? | StarTribune.com - Amity Shlaes, Bloomberg News::

November 22, 2012 - "Will 2013 be 1937? This is the question many analysts posed as the stock market dropped after the election. On Nov. 16, they noted that industrial production, a crucial figure, dropped as well.

"In this case, '1937' means a market drop similar to the one after the re-election of another Democratic president, Franklin D. Roosevelt, in 1936. The drop wasn't immediate in that case; it came in the first full year after the election. Industrial production plummeted by 34.5 percent. The Dow Jones average dropped by half by 1938.

"It's hard to imagine stock indexes dropping by half today, or unemployment rising past 15 percent, as they did in the 'depression within the Depression.' But the parallels are visible enough to be worth tracing. "

Read more: http://www.startribune.com/opinion/commentaries/180436241.html?refer=y
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