I was watching a TEDTalks speech last night given by Alex Tabarrok in 2009. Here’s some info on Tabarrok from the TED bio page:
Tabarrok’s fascinations include the intersection among economics, law and public policy — examining questions such as how race and poverty affect the outcome of jury trials. Tabarrok is also the Director of Research for the Independent Institute, an assistant editor for the Independent Review, and an Associate Professor of Economics at George Mason University.
His blog (marginalrevolution.com) is one of the hottest out there, and it’s usually a fascinating read.
TED, by the way, is awesome. I was introduced to it by my wife a few months ago and have been addicted ever since. The website is jammed full of videos of speeches from the most interesting people across a wide spectrum of interests.
On TED.com, we make the best talks and performances from TED and partners available to the world, for free. Almost 900 TEDTalks are now available, with more added each week.
Back to my story: A slide in Tabarrok’s presentation was very encouraging given our current dismal economic and employment numbers. The recession is often referred to as “the worst financial crisis since the Great Depression.” And rightfully so. But the good news is, after the Great Depression our economy grew faster than ever before. Look at the graph he showed:
It’s a bit hard to see, I Ctrl+Prnt Scren’d it. Along the bottom is the year, starting in 1900 and ending in 2007. On the Y-axis is real GDP per capita in the United States. Right at 1930 (when the Depression hit), you can see the steep drop-off that was created by the economic meltdown.
The interesting things are the two arrows, one red and one black. The red arrow shows what the projected trend would have been just before the Great Depression. The black arrow is another version of the same, only a bit more optimistic. Now remember, these would be the projections before you knew anything about the Depression.
Here’s where the encouragement comes in: after we recovered from the Depression, our annual increase in real GDP per capita was much higher than anything anyone would have predicted in the first half of the 20th century.
So hang in there America. If history teaches us anything, it’s that this recession could be a small step back that leads to 4 steps forward.
I’ll end with a quote from Mr. Tabarrok’s talk,
“Growth can wash away even what appears to be a great recession.”
Watch the TEDTalks with Alex Tabarrok: