The 'second Great Depression' saviour myth

We're told that Fed officials and the Obama administration saved us from another 1930s-style slump. Nonsense

Dean Baker
guardian.co.uk, Thursday 16 February 2012 16.15 EST

As President Obama's re-election campaign heats up, there are several new accounts of his track record finding their way into print. One item for which he is – undeservedly – given credit is saving the country from a second Great Depression. The political elites believe in the salvation from the second Great Depression myth with the same fervency as little kids believe in Santa Claus. And it has just as much grounding in reality.

While the Obama administration, working alongside Ben Bernanke at the Fed, deserves credit for preventing a financial meltdown, a second great depression was never in the cards. The first Great Depression was brought about not only from misguided policies at the onset of the financial crisis, but also from an inadequate policy response.