Tuesday, September 20, 2011

Do We Finally Have an Accurate Analogy?

When applying historical lessons to current events, it should be obvious that you need to draw on the correct historical analogies. The current recession is most often compared to the Great Depression (probably more out of the President's desire to appear as FDR, and historical ignorance, than any other reasons). However, Saleno Zito discusses what may be a more appropriate analogy: the 1890's. Says Zito:
Both eras feature fantastic wealth created for a privileged few, fiercely competitive and highly partisan elections, an ineffectual and seemingly corrupt government and an angry, disillusioned electorate.

And both have had populist movements -- the Progressives of the late 1800s, the tea party of today -- born of economic dislocation that has pressured the status quo, Genovese said.
"I think the analogy between the 1890s and today is better than the analogy with the Great Depression that we often focus on," said Hugh Rockoff, a Rutgers University economics professor. "One of the many similarities is the real estate crisis. There was a subprime mortgage problem in the 1890s that was very similar to what precipitated the recent crisis."

(h/t, Instapundit).

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