Lessons From the Great Depression, William Watson

¶ … Lessons from the Great Depression, William Watson is comparing the current recession with the time frame between 1939 and 1940. This is when Britain and France had declared war on Germany after its invasion of Poland. However, no real hostilities took place between the two until Germany invaded France in May 1940. The time when there was little conflict that was occurring, fooled many people into thinking that the war and the subsequent events would not be as bad as feared.

Once this occurred, it caused the public to have a sense of complacency about these events and the impact that they would have on the lives of ordinary people. (Watson, 2009, pp. 41 -- 44) According to Watson, a similar situation is occurring with the recent financial crisis that has taken place. This was sparked initially by doomsday predictions that many in news media were making about: the bailouts and the financial system. At first, this caused critics to draw direct comparisons with current recession and the Great Depression. (Watson, 2009, pp.

41 -- 44) In this case, Watson argues that this economic calamity is not the same as the events that occurred in 1929. The reason why, is because the number of people that were out of work in comparison with the general population is far lower. To illustrate these views, he will refer to the unemployment rate in comparison with the size of the nation. During the Great Depression, these figures were 1 out of every 3 persons who were unemployed.

In the recession that occurred in from 2007 to 2009, this number was 1 out of every 18 people. This is important, because the author argues that this is showing how these events are not similar to the Great Depression. The reason why is because, the total number of people who are unemployed is lower on a percentage basis (which is showing how the news media is manipulating these facts). (Watson, 2009, pp. 41 -- 44) Yet, beyond this basic argument, Watson begins to draw similarities between: the current situation and what took place from 1939 to 1940.

What is happening is that most people have become complacent about future economic growth. Where, they believe that the economy will be able to avoid failing into some kind of major economic collapse. This is problematic, because these attitudes of complacency; mean that further events could happen that will make the situation worse than expected. (Watson, 2009, pp. 41 -- 44) To illustrate this argument, Watson shows how many individuals will often look at the unemployment rate to determine the strength of the economy.

The problem with using this number is that it can provide projections that are known for being inaccurate. As these figures are typically looking at past data and can often include different emotional beliefs. Once this occurs, is when many people are lulled into a false sense of security. (Watson, 2009, pp. 41 --.