Skip to comments.Five Myths About the Great Depression
Posted on 11/11/2008 4:26:40 PM PST by Ronzo
The current financial crisis has revived powerful misconceptions about the Great Depression. Those who misinterpret the past are all too likely to repeat the exact same mistakes that made the Great Depression so deep and devastating.
Here are five interrelated and durable myths about the 1929-39 Depression:
(Excerpt) Read more at online.wsj.com ...
1. Herbert Hoover, elected president in 1928, was a doctrinaire, laissez-faire, look-the-other way Republican who clung to the idea that markets were basically self-correcting.
2. The stock market crash in October 1929 precipitated the Great Depression.
3. Where the market had failed, the government stepped in to protect ordinary people.
4. Greed caused the stock market to overshoot and then crash.
5. Enlightened government pulled the nation out of the worst downturn in its history and came to the rescue of capitalism through rigorous regulation and government oversight.
AIG is now claiming they need more money. The auto industry has its hand out. I even saw that the Mayor of Detroit is asking for part of the money.
Yes more stimulus packages will surely improve the situation/sarc
Yes, and if the historical lessons are ignored, which they are, they will be learned again.
This is good, accurate summary of how conventional wisdom about the Great Depression is wrong.
This was one of those very common situations where government was not the solution; it was the problem.
Roosevelt caused the Depression. All America’s problems are caused by Democrats.
Even American Express pulled some sort of reorganization to feed at the taxpayer trough.
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Obama Says A Baby Is A Punishment
Civilization and profit go hand in hand.
Collecting more taxes than is absolutely necessary is legalized robbery.
Dont expect to build up the weak by pulling down the strong.
Duty is not collective; it is personal.
Economy is the method by which we prepare today to afford the improvements of tomorrow.
I have found it advisable not to give too much heed to what people say when I am trying to accomplish something of consequence. Invariably they proclaim it cant be done. I deem that the very best time to make the effort.
If you see ten troubles coming down the road, you can be sure that nine will run into the ditch before they reach you.
Industry, thrift and self-control are not sought because they create wealth, but because they create character.
It is only when men begin to worship that they begin to grow.
Knowledge comes, but wisdom lingers. It may not be difficult to store up in the mind a vast quantity of face within a comparatively short time, but the ability to form judgments requires the severe discipline of hard work and the tempering heat of experience and maturity.
Little progress can be made by merely attempting to repress what is evil. Our great hope lies in developing what is good.
No enterprise can exist for itself alone. It ministers to some great need, it performs some great service, not for itself, but for others; or failing therein, it ceases to be profitable and ceases to exist.
No man ever listened himself out of a job.
Perhaps one of the most important accomplishments of my administration has been minding my own business.
Prosperity is only an instrument to be used, not a deity to be worshipped.
The business of America is business.
The government of the United States is a device for maintaining in perpetuity the rights of the people, with the ultimate extinction of all privileged classes.
The man who builds a factory builds a temple, that the man who works there worships there, and to each is due, not scorn and blame, but reverence and praise.
The nation which forgets its defenders will be itself forgotten.
The right thing to do never requires any subterfuge, it is always simple and direct.
There is no dignity quite so impressive, and no independence quite so important, as living within your means.
They criticize me for harping on the obvious; if all the folks in the United States would do the few simple things they know they ought to do, most of our big problems would take care of themselves.
Those who trust to chance must abide by the results of chance.
To live under the American Constitution is the greatest political privilege that was ever accorded to the human race.
Ultimately property rights and personal rights are the same thing.
It is probable that a press which maintains an intimate touch with the business currents of the nation is likely to be more reliable than it would be if it were a stranger to these influences. After all, the chief business of the American people is business. They are profoundly concerned with buying, selling, investing and prospering in the world.
Added note from watching CNBC...
a few minutes ago (approx 7:35 PM Eastern) Larry Kudlow was pretty
excited when he read a breaking headline...
that said UK PM Brown said countries needed to reduce taxation
and tariffs in response to the current economic situation.
One of the other CNBC contributors (”talking heads”) asked if
Ronald Reagan was still alive!!!
(IIRC, Kudlow was a bit shocked and please as he noted that PM Brown
is a Socialist!)
Here is an online version of a book I found useful: The Roosevelt Myth© by John T. Flynn, 1948,
I have the fiftieth anniversary reprint hardback with foreword by Ralph Raico history prof at my alma mater back in the day (now transplanted to American Siberia).
One is indoctrinated that greedy speculation, read "eevil capitalism", met its inevitable catastrophic end, and our soupline misery was only redeemed by St. Delano and the Wise Men of his socialist Olympus.
Now we are in a churning suds of flotsam and jetsam courtesy of the Carter CRA, the Gorelick-Raines Inquisition, the Barney Frank-Maxine Waters Everything's Fine Know-Nothing Resistance.
John Across-the-Aisle McCain had his shot in opposing the Paulson Coup but chose to join the frenzy feeding the boilers with our future.
The market will sort it all out--because Hussein's Five-Year-Plans won't do any better than any preceding Beschlossian Brainiac's.
Yes, and if the historical lessons are ignored, which they are, they will be learned again.
but not quickly
That’s some good Coolidge quotes.
1. FDR was President in 1929.
2. FDR addressed the Nation on television...
Super-BUMP for Mr. Coolidge!
I think it should read: “Spread YOUR wealth around”.
wow...that Calvin Coolidge was a bright guy
You know I heard about that today. Seriously consider canceling my card.
This is definitely a myth. The money pools destroyed the market with heavy short bets, profit taking, and rumor mongering. Those money pools are virtually indistinguishable from the hedge funds of today. While Congress is bailing out the "insurers" and "banks" some others are making a fortune off shorts and their Credit Default Swaps. AIG and the Banks are too stupid to be bailed out. Instead of throwing money at them, Congress should have declared the CDS' illegal and returned the investment money (with bank interest) to the originators instead of paying off those bets with trillions of dollars.
If you have any other recommendations, I'd love to hear them.
As for me, I currently have this sitting on my shelf, waiting to be read: FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression.
Mrs. Coolidge, nonplussed, asked “how many times a day would you say that rooster has his way with a hen?”
“About 20 times a day” the farmer answered.
“Be sure to tell that to President Coolidge.” she remarked.
So when the President came by the chickens the farmer told him “The First Lady wanted me to be sure to tell you that the rooster there has his way with a hen about 20 times a day.”
“Every time the same hen?” Coolidge asked.
“Every time a different hen.” the farmer answered.
“Tell that to Mrs. Coolidge” Cal replied.
In Animal behavior the tendency of a male who will turn down the mating overture of a female he has already inseminated but somehow find the strength if a “naive” female is introduced is known as “The Coolidge Effect”.
bump and bookmarked
I do not recall how many accounts they lost over that, but it was a bunch.
Yeah, I don’t think the Rezko Mansion will be open as a homeless shelter any time soon.
Just added it to my wish list. Thanks.
Well, it appears from the article that Hoover acted more like a D than an R. Big governemnt projects and massive spendning. Bush is our Hoover, while Obama will be an even worse Roosevelt.
"President Coolidge, I've heard you never say anything, but you seem like such a nice man! Do you know a friend bet me I couldn't get three words from you?"
The author is so right. Thank you for posting this. Mr. Wilson does one heck of a job in synopsizing that which tomes have been written. Makes those lines really clear.
My thoughts exactly.
Good article but it really needed to explain—when debunking the crash misconception—about the enormous monetary contraction, which is what actually destroyed the economy (while New Deal policies prolonged the depression).
While the "greed" card gets overplayed by liberals, it most certainly DOES play its part in the expanding bubbles such as the one in real estate, whether it's mortgage brokers trying to make a deal or would-be real estate magnates trying to "flip houses".
And slapping around tariffs is mere boilerplate for free market ideologues everywhere.
this was a most excellent article.
The latest King of the Sandbox in the tradition of Lenin, Stalin, Mussolini, Hitler, Mao.
The market will right itself when enough with a stake eject the Spoiler.
Great post. Thanks.
If you want tougher sledding, but absolutely eye-opening new interpretations on every page, here are two:
Adam Tooze, "The Wages of Destruction," about the economy of Nazi Germany. He blows away almost every preconceived notion we ever had about Hitler's "miracle" economy, Speer's "production miracle," and the relationship between Jew-murder and production in the Reich; and
Tony Judt, "Postwar." This is a fabulous (long) history of post-war Europe. He hates Bush, but strangely enough stumbles into most of the right conclusions anyway. His take on the fall of the Soviets is good (not heavy enough on Reagan, but after all, it is about Europe). He hates Thatcher, but once you get past that, it's really an informative, dense book.
Again? According to the author they weren't learned the first time. He points out that Hoover and FDR employed propagandists to deliberately hide those lessons from the public.
Yes, they were and they are available to be read in history books. Unfortunately we pick and choose which historians we listen to rather than listen to the obviously correct Conservative or unbiased.