The Great Recession vs. the Great Depression


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


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