Amity Shlaes: Are We Returning to the Great Depression?

The coronavirus pandemic is dramatically disrupting not only our daily lives but society itself. This show features conversations with some of the world’s leading thinkers and writers about the deeper economic, political, and technological consequences of the pandemic. It’s our new daily podcast trying to make longterm sense out of the chaos of today’s global crisis.

On today’s episode, Amity Shlaes, New York Times bestselling author, discusses why we should be nervous about these trillions of dollars now being thrown around by Congress to fix the pandemic.

From the episode:

Amity Shlaes: Well, there are similar data points. Supposing the US has twenty or thirty percent unemployment this month, which it may well do, in U.S. history the point when we had twenty or thirty percent—mostly closer to 20 or lower unemployment—was the 1930s, the period of the Great Depression.

That’s going to be an echo and a shock when the report comes out on some Friday where people will say depression level. The takeaway from the Great Depression was quite different to what we learned in school books. The takeaway from the Great Depression is that recoveries are like people. They make choices. Every year in the 1930s, the recovery chose to stay away. It just wasn’t what a monocausal event, but a unifying theme for the recovery and its decision to hesitate was strong government intervention.

So the question really is: what can we do to avoid replication of the Great Depression? What can we do to make this very obviously event-driven unemployment number really become a blip as people return to work? The error that we see in the 1930s is we just never made the private sector very attractive.

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Amity Shlaes is the author of four New York Times bestsellers: The Forgotten Man: A New History of the Great Depression, The Forgotten Man/Graphic, Coolidge, and The Greedy Hand: How Taxes Drive Americans Crazy. Miss Shlaes chairs the board of the Calvin Coolidge Presidential Foundation and the Manhattan Institute’s Hayek Book Prize, and serves as a scholar at the King’s College. A former member of the Wall Street Journal‘s editorial board, Miss Shlaes published a weekly syndicated column for more than a decade, appearing first in the Financial Times, then in Bloomberg.