Do We Even Know What a Great Depression Means?
Brian Gongol

Here's what happened to the US economy during the Great Depression. These are year-to-year changes in total US GDP (gross domestic product, or the sum of all economic activity in the country) during the Depression years: Now, for some current perspective, the comparatively awful performance of the US economy in the fourth quarter of 2008 resulted in a 3.8% decline -- but that was an estimate of the annualized rate of change from the third quarter to the fourth. In other words, to match what happened in just the first year of the Great Depression, the economy would have to shrink more than twice as fast as it did in the last quarter, and continue to do so for four times as long.

This doesn't go to say that we don't have serious problems to consider. Nobody likes to see other people being laid off, nor do we want to see legacy companies like the Detroit automakers going bankrupt. We still face massive economic hurdles to overcome -- the US has built up a colossal $10.7 trillion Federal debt, has a dangerously underfunded entitlement system, and spends too much on energy while building too many cities in the paths of natural disasters. That's not to mention the sizeable amount of money that private households spend on debt service.

But problems of all sorts are nothing new to humanity, and the quality and speed of a recovery depend, in part, upon human psychology. Fear and panic can make things worse, but rationality and determination can help accelerate a turnaround. Here are just a few tools at our disposal today that didn't exist during the Great Depression: These and the millions of other innovations of the last seven decades matter because they're all tools that can be used to make the recovery faster. And if we can't use those tools to make a recovery faster, then we have much bigger problems than a bump in the stock market.

The connection between the technologies we possess and our capacity to escape our economic problems may not be obvious, but a simple set of parallels may be instructive: Technology helps get us out of trouble. Whether we choose to recognize its usefulness across our full range of human endeavors -- including emerging from a time of economic difficulty -- is a matter of human folly; technology most certainly will help us, whether we realize it or not. But psychology can also defeat us. If we talk ourselves into believing that our condition is worse than it objectively is, then we can initiate a feedback loop that makes the situation needlessly worse, like the drowning victim who exhausted himself flailing and splashing about. The economy is naturally resilient, just like the human body is naturally buoyant. But when we panic, we can unreasonably make our situation worse. A recession can be difficult and even painful. But to foster a sense of overheated alarm with the relentless use of the language of crisis, disaster, and catastrophe only makes matters worse.

We live in a world of broadband Internet, chemotherapy, and passenger-side air bags, and our libraries and computer networks contain the aggregated knowledge of everyone from King Solomon to Leonardo da Vinci to Albert Einstein. If we can't demonstrate the wisdom to get out of our problems with enough sobriety and confidence to show that a temporary economic slowdown is not the end of the world, then our forebears ought rightfully to be ashamed of us. And in the present, we should know well enough to realize that overheating our rhetoric only serves to worsen the plight of those who really are suffering because of lost jobs or shrinking incomes; the hospital patient doesn't need to hear "If you keep getting sick, you could die!" but rather needs words of encouragement and thoughtful attention from competent caregivers.