During the Great Depression of the ‘30s, as many as one fourth of all workers were unemployed and American corporations as a whole operated at a loss for two years in a row. GM’s stock, which peaked at 72 3/4 in 1929, hit bottom at 7 5/8 in 1932. US Steel stock went from 261 3/4 to 21 1/4 and GE fell from 396 1/4 to 70 1/4. For the entire decade of the 30s, unemployment averaged more than 18%. It was the greatest economic catastrophe in the history the United States. The fears, policies, and institutions it generated were still evident more than half a century later. In thinking about the national economy, the most fundamental challenge is to avoid what philosophers call “the fallacy of composition” – the mistaken assumption that what applies to a part applies to the whole. What was true of the various sectors of the economy that made news in the media was not true of the economy as a whole. The fallacy of composition is not peculiar to economics. In a sports stadium, any given individ...