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Amity Shlaes

What Paul Krugman Misses About 1937 Redux: Echoes

What if it just keeps going? That’s the question Americans are asking as they consider last month's 9.1 percent unemployment rate, still so high 33 months after the crash of September 2008. Scholars of economic history are asking another question: Are we repeating 1937?

That year, when Americans were expecting their economy to finally pull out of the Great Depression, the stock market dove again, with the Dow Jones Industrial Average dropping from the 190s in March 1937 to less than 100 in March 1938. Nonfarm private unemployment, the measure of Roosevelt's industrial economy, increased to more than 18 percent. Industrial production plunged by a third.