Economic historian Amity Shlaes sees some scary parallels between 2013 and 1937. In 1937Franklin D. Roosevelt had just been reelected to another term and Americans soon after experienced the “depression within the Depression.”

Will 2013 be 1937? This is the question many analysts are posing as the stock market has dropped after the U.S. election. On Nov. 16, they noted that industrial production, a crucial figure, dropped as well.

In this case, “1937” means a market drop similar to the one after the re-election of another Democratic president, Franklin D. Roosevelt, in 1936.

The drop wasn’t immediate in that case; it came in the first full year after the election. Industrial production plummeted by 34.5 percent. The Dow Jones Industrial Average dropped by half, from almost 200 in early 1937 to less than 100 at the end of March 1938.

It’s hard to imagine stock indexes dropping by half today, or unemployment rising past 15 percent, as they did in the “depression within the Depression.” But the parallels are visible enough to be worth tracing. They have to do with the danger of big government, and can be captured in a few categories.

Read the whole thing. We could be looking at a replay of 1937, only the national debt today is a whole lot higher.

This ties in with an American Thinker article by Monty Pelerin. He believes that our “economic disintegration is almost here.” He listed all of the companies that have laid off workers, filed for bankruptcy or gone out of business since the election. The list is long, and it doesn’t bode well for the near future.

Decline is a slow process, until it becomes fast. It is not easy to see at first. It should be obvious to most that our economy is approaching a critical stage. When you have destroyed the trust and confidence of business, there will be no job creation.

Some parting words are in order for those responsible for the decisions reflected above. Shutting down and giving up is anathema to the spirit that built this country and is now only found among our entrepreneurial class. It goes against the very fiber that drives success. It is a last resort for entrepreneurs.

The decision to quit is lonely, involves guilt, self-doubt and remorse. It is the last act for someone that has tried everything to avoid it. Giving up and withdrawing is not an act of retribution. People do not willingly choose to go to Galt’s figurative gulch. They are forced there.

While the masses exult in the continuation of their food stamps, cell phones and other booty, the real story of this election is yet to be told. The nation is about to find out that policies and elections have consequences more important than free stuff.

Read all of that one, too. I don’t want to scare anyone, and I hope and pray that Shlaes and Pelerin are wrong, but the writing is on the wall so we may as well prepare for the worst. Save as much as you can, stock up on necessities, take a look at your investments and basically do what you need to do to survive what could become a pretty serious economic downturn. Oh, and if you’re counting on the House GOP led by Speaker John Boehner to save us, you might want to think again.

This kind of goes without saying, but if these predictions come true the middle class will be the hardest hit.

(I know, the cartoon above is from 1934, but I thought it was still appropriate for this post.)

Via Instapundit