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Five Myths About the Great Depression
Wall Street Journal ^ | 11/4/2008 | Andrew B. Wilson

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 ...


TOPICS: Business/Economy
KEYWORDS: depression; economics; fdr; great; greatdepression; hoover; myths
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Keep this one bookmarked for later reference....
1 posted on 11/11/2008 4:26:41 PM PST by Ronzo
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To: Ronzo
Here are the five myths, you'll have to read the article to see them get debunked:

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.

2 posted on 11/11/2008 4:30:00 PM PST by Ronzo (Poetry can be a better tool of understanding than tedious scribblings of winners of the Noble Prize)
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To: Ronzo
"...Hoover was an ardent believer in government intervention to support incomes and employment. This is critical to understanding the origins of the Great Depression. Franklin Roosevelt didn't reverse course upon moving into the White House in 1933; he went further down the path that Hoover had blazed over the previous four years. That was the path to disaster."

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.

3 posted on 11/11/2008 4:30:34 PM PST by Volunteer (Just so you know, I am ashamed the Dixie Chicks make records in Nashville.)
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To: Ronzo

Yes more stimulus packages will surely improve the situation/sarc


4 posted on 11/11/2008 4:34:32 PM PST by Lilpug15 (GIRD YOUR LOINS!)
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To: Ronzo

Yes, and if the historical lessons are ignored, which they are, they will be learned again.


5 posted on 11/11/2008 4:36:44 PM PST by RightWhale (Exxon Suxx)
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To: Ronzo

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.


6 posted on 11/11/2008 4:36:51 PM PST by B Knotts (ConservatismCentral.com)
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To: Ronzo

Roosevelt caused the Depression. All America’s problems are caused by Democrats.


7 posted on 11/11/2008 4:37:39 PM PST by FFranco
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To: Volunteer

Even American Express pulled some sort of reorganization to feed at the taxpayer trough.


8 posted on 11/11/2008 4:37:49 PM PST by Smokin' Joe (How often God must weep at humans' folly.)
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To: Ronzo

Bump


9 posted on 11/11/2008 4:39:17 PM PST by ChowChowFace
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To: Lilpug15

ping


10 posted on 11/11/2008 4:41:14 PM PST by TNoldman (Conservative Values FOREVER!)
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To: Ronzo; informavoracious; larose; RJR_fan; Prospero; Conservative Vermont Vet; ...
+

Freep-mail me to get on or off my pro-life and Catholic List:

Add me / Remove me

Please ping me to note-worthy Pro-Life or Catholic threads, or other threads of interest.

Obama Says A Baby Is A Punishment

Obama: “If they make a mistake, I don’t want them punished with a baby.”

11 posted on 11/11/2008 4:41:14 PM PST by narses (http://www.theobamadisaster.com/)
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To: Ronzo

Before Hoover:

Civilization and profit go hand in hand.
Calvin Coolidge

Collecting more taxes than is absolutely necessary is legalized robbery.
Calvin Coolidge

Don’t expect to build up the weak by pulling down the strong.
Calvin Coolidge

Duty is not collective; it is personal.
Calvin Coolidge

Economy is the method by which we prepare today to afford the improvements of tomorrow.
Calvin Coolidge

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 can’t be done. I deem that the very best time to make the effort.
Calvin Coolidge

If you see ten troubles coming down the road, you can be sure that nine will run into the ditch before they reach you.
Calvin Coolidge

Industry, thrift and self-control are not sought because they create wealth, but because they create character.
Calvin Coolidge

It is only when men begin to worship that they begin to grow.
Calvin Coolidge

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.
Calvin Coolidge

Little progress can be made by merely attempting to repress what is evil. Our great hope lies in developing what is good.
Calvin Coolidge

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.
Calvin Coolidge

No man ever listened himself out of a job.
Calvin Coolidge

Perhaps one of the most important accomplishments of my administration has been minding my own business.
Calvin Coolidge

Prosperity is only an instrument to be used, not a deity to be worshipped.
Calvin Coolidge

The business of America is business.
Calvin Coolidge

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.
Calvin Coolidge

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.
Calvin Coolidge

The nation which forgets its defenders will be itself forgotten.
Calvin Coolidge

The right thing to do never requires any subterfuge, it is always simple and direct.
Calvin Coolidge

There is no dignity quite so impressive, and no independence quite so important, as living within your means.
Calvin Coolidge

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.
Calvin Coolidge

Those who trust to chance must abide by the results of chance.
Calvin Coolidge

To live under the American Constitution is the greatest political privilege that was ever accorded to the human race.
Calvin Coolidge

Ultimately property rights and personal rights are the same thing.
Calvin Coolidge

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.
Calvin Coolidge


12 posted on 11/11/2008 4:42:13 PM PST by frithguild (Can I drill your head now?)
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To: Ronzo

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!)


13 posted on 11/11/2008 4:46:58 PM PST by VOA
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To: Ronzo; Grampa Dave; BIGLOOK; MeekOneGOP; ntnychik; potlatch; devolve; dixiechick2000; LucyT; ...
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.

Not exactly.

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.


14 posted on 11/11/2008 4:47:14 PM PST by PhilDragoo (Hussein: Islamo-Commie from Kenya)
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To: RightWhale

Yes, and if the historical lessons are ignored, which they are, they will be learned again.

but not quickly


15 posted on 11/11/2008 4:47:28 PM PST by genghis
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To: Ronzo
I actually cover all of these, but consolidate them into ONE of my "48 Liberal Lies About American History."

48 Liberal Lies About American History (That You Probably Learned in School)

16 posted on 11/11/2008 4:49:47 PM PST by LS ("Castles made of sand, fall in the sea . . . eventually." (Hendrix))
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To: frithguild

That’s some good Coolidge quotes.


17 posted on 11/11/2008 4:50:20 PM PST by randomhero97 ("First you want to kill me, now you want to kiss me. Blow!" - Ash)
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To: Ronzo

1. FDR was President in 1929.

2. FDR addressed the Nation on television...


18 posted on 11/11/2008 4:54:33 PM PST by Norman Bates
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To: frithguild; PAR35; TigerLikesRooster; bamahead; AndyJackson; Thane_Banquo; nicksaunt; ...

Super-BUMP for Mr. Coolidge!

The Money, Banking, and Financial Markets Ping List.

"The business of America is business."
—Calvin Coolidge

FR Keywords: moneylist, bankinglist, financelist

Please tag all relevant threads with the aforementioned keywords.

This can be a very high-volume ping list at times.

Ping list jointly pinged by rabscuttle385 and TigerLikesRooster.

To join the ping list:
FReepmail rabscuttle385 with the subject line add  moneylist.
(Stop getting pings by sending the subject line drop moneylist.)


19 posted on 11/11/2008 4:56:08 PM PST by rabscuttle385 ("If this be treason, then make the most of it!" --Patrick Henry)
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To: Uncle Ike; RSmithOpt; jiggyboy; 2banana; Travis McGee; OwenKellogg; 31R1O; Ken H; Gritty; ...
*Ping!*
20 posted on 11/11/2008 4:56:50 PM PST by rabscuttle385 ("If this be treason, then make the most of it!" --Patrick Henry)
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To: PhilDragoo

I think it should read: “Spread YOUR wealth around”.


21 posted on 11/11/2008 4:57:10 PM PST by ChinaGotTheGoodsOnClinton (To those who believe the world was safer with Saddam, get treatment for that!)
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To: Ronzo

bookmark


22 posted on 11/11/2008 4:57:14 PM PST by rabscuttle385 ("If this be treason, then make the most of it!" --Patrick Henry)
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To: frithguild

wow...that Calvin Coolidge was a bright guy


23 posted on 11/11/2008 4:58:03 PM PST by cherry
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To: Smokin' Joe

You know I heard about that today. Seriously consider canceling my card.


24 posted on 11/11/2008 5:00:43 PM PST by EBH (Directives NSPD-51, HSPD-20, and Directive 10-289)
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To: Ronzo

/mark


25 posted on 11/11/2008 5:03:11 PM PST by KoRn
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To: Ronzo
4. Greed caused the stock market to overshoot and then crash.

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.

26 posted on 11/11/2008 5:03:33 PM PST by monkeyshine
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To: LS
Thanks for the link LS, I'll make sure to add that to my Christmas list!

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.

27 posted on 11/11/2008 5:07:19 PM PST by Ronzo (Poetry can be a better tool of understanding than tedious scribblings of winners of the Noble Prize)
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To: frithguild
Ol Calvin Coolidge and the first lady were touring a farm separately. The farmer got embarrassed when a rooster made a big production out of having his way with a hen.

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”.

28 posted on 11/11/2008 5:10:08 PM PST by allmendream (Wealth is EARNED not distributed.... so how could it be Redistributed?)
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To: Ronzo

bump and bookmarked


29 posted on 11/11/2008 5:12:46 PM PST by Skooz (Gabba Gabba we accept you we accept you one of us Gabba Gabba we accept you we accept you one of us)
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To: EBH
I cut mine when they refused to cut the biker purse snatcher commercial and have never missed it. The next issue of American Motorcyclist had the corporate cards chopped up on the cover...

I do not recall how many accounts they lost over that, but it was a bunch.

30 posted on 11/11/2008 5:13:54 PM PST by Smokin' Joe (How often God must weep at humans' folly.)
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To: ChinaGotTheGoodsOnClinton

Yeah, I don’t think the Rezko Mansion will be open as a homeless shelter any time soon.


31 posted on 11/11/2008 5:15:14 PM PST by PhilDragoo (Hussein: Islamo-Commie from Kenya)
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To: Ronzo
FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression.

Just added it to my wish list. Thanks.

32 posted on 11/11/2008 5:17:24 PM PST by Skooz (Gabba Gabba we accept you we accept you one of us Gabba Gabba we accept you we accept you one of us)
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To: FFranco

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.


33 posted on 11/11/2008 5:17:41 PM PST by CottonBall
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To: frithguild

bookmark


34 posted on 11/11/2008 5:27:16 PM PST by southland (SARAH 2012, 1 John 4:4)
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To: PhilDragoo

bookmark


35 posted on 11/11/2008 5:29:14 PM PST by southland (SARAH 2012, 1 John 4:4)
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To: frithguild

bump


36 posted on 11/11/2008 5:37:41 PM PST by Right Angler
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To: frithguild
Cal was known as a man of few words. One story has a society lady talking with him at a party...

"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?"

"YOU LOSE."

37 posted on 11/11/2008 5:39:05 PM PST by gogeo (Democrats want to support the troops by accusing them of war crimes.)
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To: PhilDragoo
I could almost guarantee that Obama and the democrats will destroy our economy with their attempts to fix it. They will bring us hyper inflation and the destruction of the US currency. Printing money, raising taxes and creating more debt is the exact opposite of what needs to be done. We are likely headed for another great depression that will be bigger and deeper than the last.
38 posted on 11/11/2008 5:41:28 PM PST by peeps36 ( Al Gore. Is A Big Fat Lying Hypocrite. He Pollutes The Air By Opening His Big Mouth)
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To: Ronzo

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.


39 posted on 11/11/2008 5:44:04 PM PST by Alia
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To: CottonBall

My thoughts exactly.


40 posted on 11/11/2008 5:51:24 PM PST by djsherin (The federal government: Because your life isn't screwed up enough!)
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To: Ronzo

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).


41 posted on 11/11/2008 6:06:12 PM PST by LifeComesFirst (Until the unborn are free, nobody is free)
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To: PhilDragoo; devolve; ntnychik; dixiechick2000; MeekOneGOP; Lady Jag; Seadog Bytes; FARS; All
 

 

42 posted on 11/11/2008 6:12:25 PM PST by potlatch
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To: Ronzo
4. Greed caused the stock market to overshoot and then crash.

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.

43 posted on 11/11/2008 6:20:21 PM PST by TradicalRC (Conservatism is primarily a Christian movement.)
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To: Ronzo

this was a most excellent article.

thanks.


44 posted on 11/11/2008 6:56:29 PM PST by ken21 (people die and you never hear from them again.)
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To: peeps36
We could surmise that the Left has engineered a catastrophe to precipitate the thesis-anthithesis-synthesis cycle which the KGB Active Measures defector described as demoralization-destabilization-crisis-resolution (revolution).

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.

45 posted on 11/11/2008 7:35:39 PM PST by PhilDragoo (Hussein: Islamo-Commie from Kenya)
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To: Ronzo

BOOKMARK.


46 posted on 11/11/2008 10:07:19 PM PST by fishhound (Church, guns, a fishing rod and a hat light.)
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To: frithguild

Great post. Thanks.


47 posted on 11/11/2008 10:16:13 PM PST by fishhound (Church, guns, a fishing rod and a hat light.)
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To: Ronzo
If you are into political thrillers, no one is better than Vince Flynn. Get his first book and work your way through. He's the modern day Ian Fleming. Easy to read, exciting.

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.

48 posted on 11/12/2008 3:53:39 AM PST by LS ("Castles made of sand, fall in the sea . . . eventually." (Hendrix))
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To: RightWhale
Yes, and if the historical lessons are ignored, which they are, they will be learned again.

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.

49 posted on 11/12/2008 10:40:55 AM PST by TigersEye (I want some pie.)
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To: TigersEye

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.


50 posted on 11/12/2008 10:48:03 AM PST by RightWhale (Exxon Suxx)
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