History speaks, who will listen?

It is popular though hardly comforting to talk of recession these days, so let us talk and be comforted, and vexed. Recession is the great American bogeyman, the thing that sets hearts to quivering. So lips proceed with haste to curl to frowns when glum-faced, blow-dried and half-baked television anchormen and women spill the word from their lips. President Barack Obama races to the fore, proclaiming stimulus salvation. History speaks, but no one listens.

Here is what history says: There have been 22 recessions – including this one – since the turn of the last century, according to the National Bureau of Economic Research. The previous 21 slowdowns averaged 14 months in duration, and so the one that started in 1920 and ended 18 months later in 1921 was fairly typical. That postwar slump preceded the roaring ’20s, when the economy boomed, and that period preceded the ’30s, when disaster – and the New Deal – struck.

Government’s responses are among lesser known distinctions between the tumbles at the beginning of and end of the 1920s. Public school textbooks and popular culture have inculcated Americans with knowledge – or a loose facsimile of it – regarding the interventionist heroism of Franklin Roosevelt, credited with rescuing the country from the Depression.

The downturn of 1920 did not match the stock market crash for drama. But the real economic conditions initially were almost as bleak. Unemployment skyrocketed from 4 percent in 1919 to 11.9 percent in 1921. Wholesale prices plunged 45 percent. Stocks fell 18 percent. The agricultural economy as America then knew it vanished. Add to this a stinking mire left by President Woodrow Wilson: a fat federal deficit and a swelling bureaucracy.

So what to do? President Warren Harding first ignored his commerce secretary, Herbert Hoover, who wanted, naturally, to increase government further. Then he slashed federal spending – imagine! – cut taxes, paid down debt and, voila, the economy roared. Unshackled businesses reinvested. Factories rumbled back to life. Unemployment fell to 1.8 percent.

Hoover and then FDR tried a tack in precisely the opposite direction when the economy later slipped again, and the result was the Depression, exacerbated by the New Deal and ended by a wartime production boom.

What Harding understood that FDR and Hoover did not is that recessions, however painful, are necessary evils in a free-market economy, and not so evil at all when compared to totalitarian alternatives. The recession of 1920 to 1921, as historian Paul Johnson explained, “sorted out the sheep from the goats, liquidated the unhealthy elements in the economy and turned out the parasites ... business downturns serve essential purposes. But they need not be long because they are self adjusting.”

This carries us forward to the current correction, which Obama is racing to fix. He spent Monday pleading in the heartland for people to push lawmakers to approve $800 billion in spending on his economic stimulus plan, which has inspired skepticism from the nonpartisan Congressional Budget Office. The product so far of trillions of dollars in federal bailout spending has been that credit remains substantively frozen, layoffs continue to ripple across the country and the economy is locked in freefall. Naturally, Obama concludes the solution is to spend more but not tax less.

And locals, among others, are lining up to reach for government stimulus crumbs, as The News Virginian’s Bob Stuart explains in a story on the front page of today’s newspaper. Obama is chiseling away at free enterprise and taxpayer wallets, seeking to nationalize the economy and wrest it from capitalism’s hands. Harding and Hoover showed us a better way and a worse one.

But there’s even more to fear than the recession bogeyman, whose presence Obama’s policies will almost surely prolong. America might soon discover what it once knew innately: When markets aren’t free, the people aren’t either.