My old friend Jim Livingston, a historian at Rutgers, argues in a two-part article that the conditions that led up to the Great Depression are very similar to those led up to the current economic and financial crisis. Livingston thinks that in the both cases the cause lay in the production/investment/profitt/wage system – what policy-makers now call “the fundamentals” -- rather than in the financial system and that the solution will also lie in stimulating consumer demand for goods and services rather than in hoping, perhaps in vain, that recapitalized banks will discover businesses eager to take out loans for expansion.
--John B. Judis