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Holly Holt
Professor VanBebber
Writing 100
15 April 2009
The Worst Hard Time
“On December 1, 2008 the National Bureau of Economic Research (NBER) officially
declared the United States in recession, and estimated that it began in December 2007”
(Papademetriou, 5). Ignorance is bliss –this must be true for the reporters of major television
networks that are comparing the Great Depression of the 1930’s with the current economic
recession. Nathan Burchfiel of the Business and Media Institute stated, “As the economy has
slowed and indicators have started showing signs of fatigue, historically negative media
coverage has taken a turn for the worst” (Burchfiel, 1). The economic recession should not be
classified as a depression, because the conditions of the Great Depression were far worse than
what Americans are facing now. The recession of the 2000s is nothing like the depression of the
1930s in that the economy is strong enough that the GDP and Industrial Production are still
sturdy, unemployment rates have not reached Great Depression highs, and the fear of
communism is not prevalent. Above all else, the United States has not reached “the worst hard
time” as Timonthy Egan described in his book because the Dust Bowl during the Great
Depression was far worse than anything America has faced during the current recession.
The beginnings of the recession and Great depression differ greatly. The current
recession is contributed to the misperception of housing prices and the collapse of the housing
market. Professor of economics Erik Hurst stated, “Increases in real housing prices of 15 percent
or more over a three-year period – are always followed by substantial housing busts which
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eroded most of those housing gains” (Hurst, 2009). The Great Depression was ignited by the
stock market crash of October 2009 and the stock market speculation. It was worsened by the
drought conditions of the Midwest and the reduction of American spending across the nation.
Therefore, the distinction of a depression and recession may be that a depression involves many
factors and is multilateral; whereas, a recession can be caused by a single factor. Both a
recession and depression may involve the same consequences such as bank closure, job loss and
overall decrease in consumer spending, but the main division is the severity of these main
outcomes.
According to the dictionary definition the United States is not in a depression.
“Depression is an economic term used to describe a prolonged or severe downturn in economic
activity. Depressions have a more moderate counterpart recession that is a normal part of the
business cycle of a free market economy” (Edwards, 1). In other words, recessions are a normal
occurrence in a free market economy. In a capitalist society the market has highs and lows.
CFA, Mark W. Riepe described the current economic situation, “It’s true that the economy isn’t
strong and our financial system is not as healthy as it needs to be, but we are incredibly far away
from the types of economic difficulties seen in the depths of the 1930s” (Reipe, 32). The media
should not exaggerate the natural occurrence of a recession by comparing it to a depression.
Setting the definition aside, the percentage comparison of the recession versus the Great
Depression demonstrates the difference in GDP growth, industrial production and consumer
price index. Mark W. Riepe stated in the Journal of Financial Planning, “For context consider
these two realities. First the economy is much stronger today than during the Great Depression.
In the 1930s, the United States was primarily an industrial powerhouse, and industrial production
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from peak-to-shank 52 percent” (Reiepe, 32). For example, the current gross domestic product
(GDP) is +1%, whereas during the Great Depression it was -27%. If that’s not convincing
enough, the industrial production of 1929 was -52% and today it is -2%. The consumer price
index reveals a similar trend of current +4% today and -27%. The current figures are not great,
“not by a long shot, but not a depression, either” (Riepe, 32).
While society is currently very concerned with unemployment rates, the rate of
unemployment is minimal compared to the rates during the Great Depression. Unemployment
was the single most devastating issue during the depression. During the Great Depression
unemployment rose to nearly 25% whereas today we face a national unemployment rate of 6%.
Professor of economics, Dr. Wayne Carroll stated, “We live in very affluent times. So if we get
a 1% reduction from what we enjoy now and we’re used to, we feel really harshly” (Rasmussen,
1). Another economic expert, Dr. Donald Boudreaux proclaimed, “Unemployment is only 4.9
percent –not super-duper, but pretty darn respectable” (Burchfiel, 2). Another important
designation between a depression and recession in regards to the economy and employment is
the gross domestic product. For instance, in 1934 the GDP was -13.0 and in 2008 the GDP was
1.1. This is a significant difference between a depression and recession (Bureau of Economic
Analysis).
The economy and the lack of jobs became a serious issue during the Great Depression –
so serious that many Americans believed democracy was lacking and other forms of government
such as Communism were considered. The economy became so bad during the Great
Depression that many people believed the United States would become communist. Senator
Huey Long of Louisiana proposed legislation that would redistribute wealth and give
government housing to everyone. Citizens making $2,500,000 would be stripped of their wealth
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and it would be given to the less fortunate. This extreme plan was taken very seriously by
President Roosevelt who was an advocate for redistribution of wealth. While today’s legislatures
are discussing many national and socialized programs, such as nationalized health care, we are
not in jeopardy of succumbing to communism as we were in the 1930s. Also, what sets us apart
from the past is that we have fiscal policies and globalization which promotes the United States
as a capitalist nation, not communist. No matter how bad the economy will get, America will
still be a democracy, this was not the belief during the 1930s because the desperation caused by
the Great Depression.
The migration of the Great Depression, specifically the Dust Bowl of the Midwest, is
nothing that Americans have witnessed during the current recession. As if the economic
situation of the Great Depression was not bad enough, the presents of the Dust Bowl made the
1930s “the worst hard time.” The Dust Bowl devastated the farmers of the Midwest. During the
1930s, otherwise known as the “dirty thirties,” there was a combination of a drought and severe
dust storms which made farming impossible for the Midwest. John Steinbeck wrote The Grapes
of Wrath in 1939 which depicted the Midwest migration to California and explained the
conditions the farmers were facing during the Dust Bowl. Steinbeck wrote, “Houses were shut
tight, and cloth wedged around doors and windows, but the dust came in so thinly that it could
not be seen in the air, and it settled like pollen on the chairs and tables, on the dishes” (Steinbeck,
Chapter 1).
Approximately 300-400,000 of the Midwest farmers from Texas, Arkansas and Missouri
migrated to California in hopes that agricultural conditions and jobs would be more available.
Historian James Gregory explains,
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This would have been a significant population transfer in any era but was particularly
momentous in the context of the depression when internal migration rates for other parts
of the country were low and when high unemployment made any kind of relocation risky
(Gregory, 1).
There has not been a significant internal transfer of populations during the current recession nor
have there been enormous weather conditions such as drought which have prevented agriculture
from prospering. For example, there were only 2,448 people in the United States in 2007 that
moved from one region in the United States to another, compared to the 400,000 during the
depression (U.S. Census Bureau). This migration of people was caused by the “nation’s worst
prolonged environmental disaster” (Egan, 10). Therefore, this recession should not be classified
as a depression because the 1930s was a time of the worst economic and environmental disaster
of the 20th century. America has been fortunate not to have been faced with weather conditions
of the Dust Bowl which only heightened and worsened the effects of the Great Depression.
The Great Depression was a terrible time period for America and for the world. It is
ignorance on the part of journalists to exaggerate the current economic conditions by comparing
it to the Great Depression just to sell the news. While many ABC and CNN reporters may want
the public to think that this is the worst recession since the Great Depression, many scholars are
saying that “we aren’t facing anything remotely like a replay of the 1930s” (Burchfiel, 2).
Compared to the Great Depression we are not facing large migration, extremely high
unemployment rates or the fear of communism. Being in a recession is not painless either; the
fact is Americans are losing their jobs, homes are being foreclosed and families must make
sacrifices. However as Burchfiel clarifies, “Current economic conditions are nothing like they
were in the Great Depression with bread lines, hundreds of banks failing every year, production
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falling 20 percent and unemployment near 24 percent” (Burchfiel, 2). Therefore, Americans
really are not suffering now as people were during the Great Depression, and once the media
stops portraying the recession as a depression all of us will realize how much better off we are
now than during the Great Depression.
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Works Cited
Burchfiel, Nathan. “Not-So-Great Depression Coverage: All of the Hype, but none of the Bread
Lines. Business & Media Institute. 5 March 2009. Pages 1,2.
Bureau of Economic Analysis. GDP and the Economy Advance Estimates. March 2009.
http://www.bea.gov/national/an1.htm
Gregory, James N. “The Dust Bowl Migration” Poverty in the United States: An Encyclopedia
of History, Politics and Policy. 3 March 2009. Page 1.
Hurst, Erik. “Current Recession Not the Great Recession.” 7 February 2009.
http://www.chicagogsb.edu/news/2009-02-07_hurst.aspx
Edwards, Hanna. “The Definition of an Economic Depression.” 24 March 2009.
http://www.helium.com/items/1172564-what-is-an-economic-depression
Egan, Timonthy. The Worst Hard Time. New York: Houghton Mifflin. 2006
Papademetriou, Demetrios G., and Aaron Terrazas. Immigrants and the Current Economic
Crisis: Research Evidence, Policy Challenges, and Implications. Migration Policy
Institute. January 2009. Page 5.
Rasmussen, Sarah. “Comparing the Great Depression to Today’s Economic Recession.” 5
March 2009. Page 1.
Riepe, Mark W. “Depression Fears Overblown.” Journal of Financial Planning. December
2008. Page 32.
Steinbeck, John. The Grapes of Wrath. The Viking Press: 1939. Chapter 1.
U.S. Census Bureau. Geographical Mobility: 2006-2007.
http://www.census.gov/population/www/socdemo/migrate/cps2007.html