Did You Know?

Did you know that this recession is definitely nowhere near being as bad as the first one? Although we might see it as a catastrophe, it certainly isn’t. History does repeat itself, but the truth is we are still doing okay for the time being. Unemployment right now is teetering around 9 to 10% which isn’t great, but during the Great Depression unemployment reached 25%. Did you know that industrial production dropped 46%? This is not even the worst of it; let’s just say that what we view as a Depression isn’t really a Depression.


I look around and see people shopping for the holidays; at that time only the very wealthy could afford to shop. There were plenty of families that knew what it was like to be hungry, and I can’t say that I have been there. Sure, we have all been concerned about what is happening and how it will affect us. This is what I call a national disaster, but in the end we are much further along in our comforts than people were back then.

So, with what is going on now, what would you say that the Great Depression was linked to then? How did this all happen so long ago? According to an article I read entitled, “Seeds of Financial Disaster”, there was corruption in the banking system at that time. So, it really isn’t much different in terms of how this happened. Commercial and investment banking industries were crossing each other’s lines then, so it seems that it history does in fact repeat itself.

During the 70’s, Asset Securitization was born, and this is how the selling of mortgages began. In essence, this plan was designed to make housing more affordable, but did it? Looking at where we are now, surely there is a better plan.

-Mayer Dallal