Short-Term Key +12
Long-Term Key +57
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Inside this New Year's Eve update...
***** Our holiday reading and the lessons it teaches about economic crises.
***** How the 1930s taught the government how to fix the economy this time.
***** Short-term good, mid-term scary, long-term fantastic!
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The best present I received this Christmas was a CD-ROM compilation of all New York Times headlines from 1850 to present, plus the articles that went with them. Naturally, I put this to immediate use searching for periods in history when the headlines resembled those of today.
I confess am not a scholar of American history, however two periods immediately jumped out at me. The first was 1974, the year when President Nixon resigned in disgrace and a new President came into office who pardoned him. The nation was in disarray. Stock prices declined by roughly as much as today, while inflation rose to high levels.
Although I lived through this period, my review was helpful because it reminded me that only towards the end did we feel the need to combat recession rather than inflation. Consequently, there were many proposals for raising taxes and very few for stimulating the economy. In fact, the only real commonality between 1974 and today is that the auto sector was weak in 1974.
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