The Economic Crisis in Historical Perspective, Part II

Abstract

In last month's Review of the Month we argued that U.S. capitalism has once again, as in the 1930s, entered a period of persistent and prolonged stagnation. At the same time we expressed agreement with those who, while recognizing that many big banks and corporations are in very shaky condition, doubt that this time it will come to a 1933-type panic. The expectation of prompt government intervention—through some combination of debt moratoriums and emergency bail-outs—seems well founded. As Business Week wrote in its issue of January 27th under the heading, "When Companies Get Too Big To Fail": "The huge U.S. corporations have become such important centers of jobs and incomes that it [the government] dare not let one of them shut down or go out of business. It is compelled, therefore, to shape national policy in terms of protecting the great corporations instead of letting the economy make deflationary adjustments."

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