Many who argue that the financial shocks of 2008 were bigger than 1929 like to piggyback off former Federal Reserve Chair Ben Bernanke’s quote, “September and October of 2008 was the worst financial crisis in global history, including the Great Depression.”
Most people vehemently disagree with arguably the most decorated scholar of the Great Depression, but when you consider, according to Bernanke that, of 13 the most important financial institutions in the United States, 12 were at risk of failure within a period of a week or two,” one can possibly appreciate his position. Nevertheless, when compared to human suffering, the Great Recession pales in magnitude with the 1930s.
Consider these differences: The Great Depression lasted 43 months; the Great Recession 18 months. Industrial production declined by more than 50 percent during the Great Depression; the Great Recession, 15 percent.
At one point during the Great Depression, one in four Americans was without a job. At the height of the Great Recession, one in 10 Americans was without a job.
Finally, 50 percent of all the nation’s banks failed during the Great Depression. During the Great Recession, less than 1 percent of the country’s banks collapsed.
For more eyebrow-raising facts comparing the Great Depression to the Great Recession, check out this illustration, courtesy of Oppenheimer.
In closing, no matter what position we take, one thing is certain: Humanity has shown that it can adapt and learn, and that is exactly what we did during the Great Recession. We learned from our mistakes from the Great Depression, and that is why I argue the outcome was dreadful, but not as disastrous!
Harry Pappas Jr., CFP®Managing Director-Investments
Certified Estate and Trust Specialist™
Certified Divorce Financial Analyst®
Pappas Wealth Management Group of Wells Fargo Advisors
818 A1A N, Ste. 200
Ponte Vedra, Florida 32082
904-273-7955
harry.pappas@wellsfargoadvisors.com
The use of the CDFA™ designation does not permit Wells Fargo Advisors or its Financial Advisors to provide legal advice, nor is it meant to imply that the firm or its associates are acting as experts in this field.
Wells Fargo Advisors LLC, Member SIPC, is a Registered Broker-Dealer and a separate non-bank affiliate of Wells Fargo & Company. This and/or the accompanying statistical information was prepared by or obtained from sources that Wells Fargo Advisors believes to be reliable, but its accuracy is not guaranteed. The report herein is not a complete analysis of every material fact in respect to any company, industry or security. The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. Any market prices are only indications of market values and are subject to change. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request.
