The [1933] London Conference was a fiasco. President Roosevelt refused to attend. He took a sailing holiday to flag his contempt for Old World posturing. FDR feared a trap to draw America back onto the Gold Standard – the source of the misery – and to lock the White House into Europe's deflation orthodoxies. As delegates waited, he cabled a message mocking the "old fetishes of so-called international bankers". Keynes defended him as "magnificently right".

The London G20 comes earlier in the depression cycle. A good thing too. The fundamental circumstances are worse today than in the early 1930s. The debt burden is higher. The global economy is more tightly intertwined. The virus spreads more swiftly.

Do not be misled by apparent normality. Unemployment lags, and social devastation lags further – although it has already hit the Baltics and Ukraine. Do not compress the historical time sequence either. Life seemed normal in early 1931 when the press reported "green shoots" everywhere. Part Two of the Depression was the killer. Part Two is what we risk now if we botch it.

Read it all.

Filed under: * Culture-Watch • Globalization • * Economics, Politics • Economy • The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

1. tgs wrote: Nonsense. March 29, 9:42 am | [comment link]

2. Dilbertnomore wrote: Of course, they would never begin to think to just give Capitalism a chance to work. That is, to work without the hobbling fetters that rob Capitalism of its effectiveness to focus market forces to raise all boats. March 29, 1:26 pm | [comment link]

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