Henry Cordes of the Omaha World Herald writes that while some people are referring to the current economic malady as the "Great Recession", the folks in the farm belt were generally hit much harder by the recession of the early 1980's.
This is nothing new, but still interesting to point out. A nation is a collection of intertwined local economic areas and there is no reason to expect every area to be equally affected at any point in the business cycle. The same can be said when there are shocks to the economy. Perhaps it is because the latest recession hit California and New York - major press centers - especially hard that the current economic situation is getting its special name.
Growing up in the potential firing line between the US and the USSR, the members of the metal band the Scorpions had special reason to celebrate the fall of the Berlin Wall. Here is a video of their classic ballad Winds of Change which is about this historical event.
Here is the original video.
It's important to remember that this song, recored in 1990, is about this moment in history written from that moment in history. It is a song about hope and the dismantling of the the dark shroud that destroyed the hope of millions of people in Eastern Europe: the Iron Curtain.
At last, a book that I've long awaited has been published: Robert Higgs's Depression, War, and Cold War (Oxford University Press, 2006).
As compelling, informative, and important as are his chapters on the
military-industrial-congressional complex, my favorite chapter is the
first: "Regime Uncertainty: Why the Great Depression Lasted So Long and
Why Prosperity Resumed After the War." (Here's an earlier version.)
Higgs's thesis in this chapter, which is backed by data (including
interesting data on bond yields from the mid-1920s through the
mid-1950s), is that the Great Depression was prolonged and deepened by
the "regime uncertainty" created by FDR and the New Deal. As it turns
out, Uncle Sam never engaged in wholesale nationalizations and other
whacky central-planning schemes -- but no one in the 1930s knew what
the future held. For investors back then to believe that any
investments they made in the U.S. might be confiscated or regulated to
smithereens was not unreasonable, given the rhetoric of the time and
the shift in policy brought by FDR and his "brain trust."
This "regime uncertainty" stifled investment, keeping the economy stagnant.
In Macro I teach students that investments earn returns over time and if there is a chance that an investment's return will be grabbed for "public purposes," that lowers the expected return on the investment and lowers the chance the investment will be made in the first place.