The New Deal and the New New Deal : a Comparative Study

Abstract

Eager to understand and to overcome the 2007 crisis, economists worldwide are struggling to provide better understanding of past panics. Researches revealed that the recent crisis and the Great Depression, the most severe ever witnessed by the United States, share some similarities. Most of the financial calamities started in the United States and spread internationally since they occurred in a world of interconnected trade. In narrative histories of US financial panics, little is found about similarities and differences of the panics. “All is forgotten until another storm comes”. Contemporary commentators and economic scholars do not seem to have the same identification of the events leading up to banking panics. The result lies in the number of panics they give when referring to US economic history. The most recent definition of banking panic is provided by Calomiris and Gorton. A banking panic may occur when depositors ask for immediate redemption for cash. My paper studies most panics, be them major or minor, from 1819 to 2007; with attributing more importance to the Great Depression of 1929 and the Great Recession of 2007 being focal points in the economic history of the country. My work is a combination of historiography, clinical survey, and analysis. It comprehends history of the panics, analysis the causes behind failures of companies and banks using a cause and effect pattern, and the statement of similarities and differences.