[Pelham]

The Great Depression was a systemic collapse of banks and the money supply. It was mostly the fault of the Fed’s failure to act as lender of last resort during the banking crisis of 1930-33 which allowed one third of American banks to fail and one third of the American money supply to vanish.

Hoover played only a minor role despite the recent hobby of portraying him as a progressive whose meddling turned a normal recession into a disaster. The 1921 recession was not precipitated by a collapse in the banking system, something entirely different than the situation in 1930

[Defiant]

I've looked at the record of Hoover's response to the 1929 stock market crash and the events that followed, and it seems that his every impulse was interventionist and Keynesian, before there was Keynes. I have also reviewed the situation facing Harding, and it was pretty bad. Their response was to get government out of the economy, to eradicate the interference by Wilson in the market. Harding's approach worked, Coolidge followed it up brilliantly, and the country prospered. Hoover made a bad situation worse, and then Roosevelt made it into a never ending depression. Just like Bush and Obama.

Hoover was firmly in the progressive wing of the GOP. That cannot be doubted, and it colored the difference in his reaction to economic problems. One of the best books I have read about this was "The Forgotten Man" by Amity Shlaes. It describes in detail the programs that Hoover was putting in place to "fix" the problem, and they were all big government responses to a cyclical problem that made a problem far worse than it should have been.

[stephenjohnbanker]

Spot on!