The 1929 stock
market crash and the subsequent ‘great depression’ was the biggest economic
crisis that the world has experienced. The depth and length of the crisis and
the suffering that it caused is legendary. Therefore when the global financial
crisis struck in 2007, many rushed to proclaim that we were about to experience
another depression on a similar scale, or at least what some have termed a
‘great recession’. This paper will compare and contrast the two economic crises
to analyse the key similarities and differences between the two. To do this,
the paper will firstly provide an outline of the conditions that led to the
1929 crash in the economy. Moving on from here the paper will then look at the
policy responses that were implemented to tackle the crisis before analysing
the conditions that precipitated the 2007 financial crisis and the policy
responses, to draw out the similarities and differences of each of the crises,
and to ascertain were any lessons learned during the current global crisis from
the policies of the great depression era. Finally the paper will conclude with
a discussion of the main points raised by the analysis of both crises and a
look at the future prospects for recovery.
There is no alternative. We must rely on foreign direct investments and on the private sector to create jobs. Private is more 'efficient' than public. An entrepreneurial spirit will drive economic growth. These are just some of the mantras that we are exposed to on a daily basis from economic commentators, whom our mainstream media promote as 'experts'. They have a monopoly over our airwaves and newspapers, and use it to espouse their ideas as if they were common sense facts that are irrefutable. However, with a serious analysis of Irish capitalism it is quite evident that their mantras are neither common sense nor facts, and are very refutable indeed. A look through the figures on the Irish economy reveal a very different picture to the one painted by our government and the economic 'experts,' who argue that an economic recovery based on real job growth is to be achieved through attracting foreign direct investments (FDI's) into the country, and a strong Irish entrepreneurial spirit.
