With the Dow Jones Industrial Average back around 10,000, and many other statistics on the uptick, it does appear that the recession, if not over, is – albeit slowly – beginning to mend. Earlier this week, the Wall Street Journal weighed in with the an article that looked at the question, Eighty Years After the Great Crash, is it the [19]30’s Again? In all honesty, we here thing the answer is a definite no, and following is an article written byWSJ writer Dave Kansas which give a very good overview of why that’s likely true.  (In the interest of fairness, however, if you want to read the other side of the argument – which we here do not agree with – go to http://online.wsj.com/article/SB125581121032292239.html

 

 

Wall Street Journal, Tuesday, October 21^st

 

By Dave Kansas

 During the past few months, a number of economists and even some policy makers have declared the Great Recession over. The data support that view. Leading indicators are on the rise, home sales have improved, and third-quarter growth is expected to come in positive.And yet, the doomsayers will not relent. The stock-market rise is derisively called a "suckers' rally." The economy may be better, but it will soon "double dip" back into recession. The jobs picture will only worsen. These mutterers of darkness believe that we are deep into a replay of the Great Depression, an era filled with false dawns.Oh please. Let's not make any mistake: The current downturn is almost certainly the worst since the Great Depression. A high jobless rate and the loss of personal net worth from collapsing home values and declining stock markets have made this a period of pain for many people. Ever since the downturn ripped through the financial system one year ago in the wake of the Lehman Brothers collapse, comparisons to the 1930s have come and gone. On the 80th anniversary of the great stock-market crash those comparisons are likely to intensify, though they shouldn't. During the Great Depression, more than 10,000 banks failed. Bank runs were so commonplace that moviegoers understood viscerally what was happening during the pivotal bank-run scene in the Christmas classic "It's a Wonderful Life."Since 2008? A mere 125 banks have failed. During the Great Depression, stock prices declined 90% in the three years after the Crash of 1929, and gross domestic product fell by 30%. By comparison, the stock market fell about 55% from its 2007 high before rebounding, and GDP declined less than 5%. Data have recently indicated that the economy is on the mend. Forecasters have declared the recession over. The index of leading indicators has risen every month since April. The stock market is up about 50% from its lows. Corporate-profit forecasts are rising. Jobless claims have dropped 13% since March. Thrifty consumers are saving money. Morgan Stanley recently reported: "Employment and capital spending are improving.... Corporate restraint seems to be reducing excesses and laying the foundation for sustainable economic growth." There's really only one fly in the ointment: the jobs picture.The unemployment rate, at 9.8%, is the highest in 20 years. More than seven million people have lost their jobs, and most economists expect the jobs situation to worsen into 2010 even as economic growth picks up. These figures are bad. But they aren't nearly as bad as the 20% rates seen in the 1930s, even though the way unemployment measures have changed over the decades makes comparisons difficult. The plain fact is we haven't come anywhere close to the heartbreak and destruction associated with the 1930s. The Joads aren't about to make a return, and Oklahoma remains a going concern -- heck, they even have an NBA team. The only folks who benefit from overwrought comparisons to the 1930s are bond investors, gold bugs and makers of canned goods. Don't be fooled. Write to Brett Arends at brett.arends@wsj.com and Dave Kansas at dave.kansas@wsj.com