A few writers are making some bold predictions that the U.S. economy may be headed into another Great Depression. My crystal ball has gone cloudy, so I don't know. But there are some scary parallels.
The Great Depression lasted a very long time, and some very smart people place the blame for that longevity on the FDR administration. Robert Higgs divides the period from 1929 to 1945 into three parts: The Great Contraction, The Great Duration, and the Great Escape. And in his paper titled Regime Uncertainty PDF he focuses on the "Great Duration" -- the years following the crash in which the economy operated substantially below it's capability to produce.
Listen to a podcast interview with Mr. Higgs at econtalk.org.
The thing that rings out is his description of the attitude of businessmen of the period. They were afraid to invest any money in any new business because they were afraid of the punish-the-wealthy attitude, the tax hikes, unions strengthened by new labor laws, and other crazy ideas that were floating about the FDR administration. "Regime Uncertainty" means fear of government.
It appears that the same thing is happening now. It's common knowledge that Mr. Obama doesn't want to let any crisis go to waste, and apparently he views the current economic downturn as an opportunity to implement some grand social schemes which, as always seems to be the case, involve other people's money. Whether or not they would be tolerable in good times, they're potentially disastrous in an economic downturn.
As the old saying goes, if we don't remember the past we're condemned to repeat it. These are scary times. And Mr. Obama has ushered in a new era of regime uncertainty.
Postscript. Today the DJIA closed up almost 400 points to close at 6926.49. Is the stock market horror show over? Am I a contrary indicator proclaiming gloom and doom just as the crisis is ending? Oh that would be sweet. I wouldn't mind that one bit.