Bluefield Daily Telegraph, Bluefield, WV

National and World

November 20, 2012

2013 looks a lot like 1937 in 4 fearsome ways

NEW YORK — Will 2013 be 1937? This is the question many analysts are posing as the stock market has dropped after the election. On Nov. 16, they noted that industrial production, a crucial figure, dropped as well.

In this case, "1937" means a market drop similar to the one after the re-election of another Democratic president, Franklin D. Roosevelt, in 1936.

The drop wasn't immediate in that case; it came in the first full year after the election. Industrial production plummeted by 34.5 percent. The Dow Jones Industrial Average dropped by half, from almost 200 in early 1937 to less than 100 at the end of March 1938.

It's hard to imagine stock indexes dropping by half today, or unemployment rising past 15 percent, as they did in the "depression within the Depression." But the parallels are visible enough to be worth tracing. They have to do with the danger of big government, and can be captured in a few categories.

— Pre-election spree that sets records. In the old days, federal spending amounted to about 19 percent or 19.5 percent of gross domestic product. That ratio was so reliable that economists took it as a given, the American normal, from which divergence was unnatural and temporary. By the old 19 percent rule, federal spending would have dropped back once the worst of the 2008 economic crisis passed.

That didn't happen. Instead the federal government continued to spend. Most important, even in 2012, when the crisis was long past, the government went on a spree, spending the equivalent of 24.3 percent of the economy, more than the 24.1 percent for the year earlier.

In 1936, a similar barrier was breached. Up until 1936, federal spending flowed at smaller levels than the spending by states and towns combined, with wartime being the exception. Roosevelt slowly ratcheted up the outlays, and in 1936, Washington spent more than the states and towns. This shift was dizzying for a country based on the principle of federalism, of strong states.

Text Only
National and World
  • Denver has nation’s first county fair to allow pot competitions

    Marijuana joined roses and dahlias Friday in blue ribbon events at the nation’s first county fair to allow pot competitions.
    This weekend’s Denver County Fair includes a 21-and-over “Pot Pavilion” where winning entries for plants, bongs, edible treats and clothes made from hemp are on display.
    There’s no actual weed at the fairgrounds. Instead, fairgoers will see photos of the competing pot plants and marijuana-infused foods. A sign near the entry warns patrons not to consume pot at the fair.

    August 1, 2014

  • House GOP weighs tough new immigration bills

    August 1, 2014

  • Poll: Foreign policy no longer Obama strong point

    August 1, 2014

  • US employers add 209K jobs, rate rises to 6.2 pct.

    August 1, 2014

  • Thousands rally for coal

    The echo of people chanting, “Hey, hey, EPA, don’t take our jobs away” could be heard in downtown Pittsburgh, Pennsylvania, on Thursday.
    The voices came from about 5,000 United Mine Workers of America (UMW) members and their families along with other unions such as the Boilermakers Union and the Brotherhood of Electrical Workers International (IBEW) marching through the streets.

    August 1, 2014

  • West Africa Ebola outbreak tops 700 deaths

    Security forces went house-to-house in Sierra Leone’s capital Thursday looking for Ebola patients and others exposed to the disease as the death toll from the worst recorded outbreak in history surpassed 700 in West Africa.
    U.S. health officials urged Americans not to travel to the three countries hit by the medical crisis:  Guinea, Sierra Leone and Liberia.

    July 31, 2014

  • Sunburn isn't the only sign of summer that can leave you itchy and blistered

    You've got a rash. You quickly rule out the usual suspects: You haven't been gardening or hiking or even picnicking, so it's probably not a plant irritant such as poison ivy or wild parsnip; likewise, it's probably not chiggers or ticks carrying Lyme disease; and you haven't been swimming in a pond, which can harbor the parasite that causes swimmer's itch.

    July 31, 2014

  • The virtues of lying

    Two computational scientists set out recently to simulate the effects of lying in a virtual human population. Their results, published in the Proceedings of the Royal Society B, show that lying is essential for the growth of a cohesive social network.

    July 31, 2014

  • lockport-police.jpg Police department turns to Facebook for guidance on use of 'negro'

    What seems to be a data entry mistake by a small town police department in western New York has turned into a social media firestorm centered around the word "negro" and whether it's acceptable to use in modern society.

    July 31, 2014 3 Photos

  • Screen Shot 2014-07-31 at 2.12.55 PM.png VIDEO: Five-year-old doesn't want her brother to grow up

    Sadie, an adorable 5-year-old from Phoenix, wants her brother to stay young forever, so much so that her emotional reaction to the thought of him getting older has drawn more than 10 million views on YouTube.

    July 31, 2014 1 Photo

Local News
AP Video
Congress Approves Iron Dome Funding Raw: House OKs Bill for Border Crisis Funds Rare Whale Fossil Pulled From Calif. Backyard Denver Celebrates Pot at the County Fair Escaping Email: Inspired Vision or Pipe Dream? Obama Calls on Hamas to Release Israeli Soldier Hispanic Caucus Slams GOP for Border Bill Shifts Obama: GOP Not Even Trying to Solve Immigration Emory Prepares to Treat American Ebola Cases US Employers Add 209K Jobs, Rate 6.2 Pct House GOP Optimistic About New Border Bill Four Rescued From Crashed Plane Clinton Before 9-11: Could Have Killed Bin Laden Couple Channel Grief Into Soldiers' Retreat WWI Aviation Still Alive at Aerodrome in NY Raw: Woman Who Faced Death Over Faith in N.H. Russell Simmons, LL Cool J Visit Youth at Jail Raw: Obama Gets Hug From Special Olympian US, UN Announce Deal on Gaza Cease-Fire Despite Moratorium, Detroit Water Worries Remain
Sister Newspapers' News