History May Not Repeat Itself...

But it rhymes.  As attributed to Mark Twain.  Via the naked capitalism links, Joe Nocera reviews the 1940 book on the Great Depression, "Since Yesterday," by Frederick Lewis Allen, and notices that much of the writing could describe the situation we face.  The whole column is a must-read, but I thought I'd highlight this part on the 1937 mini-Depression:

What dominates “Since Yesterday” — as it must dominate any history of the Great Depression — is the government’s responses to the crisis. Herbert Hoover was “leery of any direct governmental offensive against the Depression,” writes Allen. “So he stood aside and waited for the healing process to assert itself, as according to the hallowed principles of laissez-faire economics it should.” Sticking to his convictions, Hoover allowed the country to sink deeper and deeper into Depression, becoming in the process one of its victims — “along with the traditional economic theories of which he was the obstinate and tragic spokesman.”
Then came Roosevelt, untethered to any economic theory and willing to try anything to get people back to work. Allen describes the alphabet soup of agencies he created, the deficits he generated, the regulations he enacted. The economy, which bottomed out in 1932, steadied and then began to grow until, by 1937, it appeared that the Great Depression had ended.
Allen then takes us through the terrible days of late 1937, when the economy collapsed again. “Roosevelt’s Depression,” businessmen called it, blaming it on a business tax they particularly loathed. In fact, Allen makes the convincing case that the real problem was that Roosevelt had tried to do something business wanted: balance the budget. Shrinking government spending dried up demand. And not until the following spring, when he reversed course and decided to “go in for heavy spending again,” did conditions begin to improve.
The tragedy of Washington today, as the supercommittee begins its task of finding $1.2 trillion in cuts, is that nobody seems to remember the lessons of “Since Yesterday” — and most other books about the Great Depression.

Reminds me of what Republicans might call "Obama's Recession."  It is hard for me to see many times in the 20th and 21st century when the Republican party has been correct about anything.  Even the solutions provided in the late 70's and early 80's were tremendously flawed, and have brought us to the point we are at.  The Democrats have gotten a lot wrong, but they've often been more right than the Republicans, and most of their unforced errors have been made because of ridiculous Republican attacks, the most costly being the 30 years of foreign policy disaster in the wake of the Democrats "losing China."  But I digress.  The Republicans were wrong in the 30's, and they are wrong now.