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Why Should You Be Freaked Out About Greece? Remember, The Great Depression Had Two Parts Megan McArdle | Apr. 28, 2010, 4:37 PM | 4,190 | comment 13 The most terrifying words I've seen written so far about the growing crisis in Greece were penned by Yves Smith yesterday: "So the whole idea that the financial crisis was over is being called into doubt. Recall that the Great Depression nadir was the sovereign debt default phase. And the EU's erratic responses (obvious hesitancy followed by finesses rather than decisive responses) is going to prove even more detrimental as the Club...

Panelist Robert S. McElvaine, who is Elizabeth Chisholm Professor of Arts & Letters and chair of the department of history at Millsaps College, focused on the argument – made, he said, by many conservatives today – that the failure of the New Deal to end the Great Depression shows that government spending isn’t the way to revive a slumping economy. “The most important thing to realize,” said McElvaine, “is that so-called conservatives – I prefer to call them ‘regressives’ ” – have long been trying to “restore the conditions that created the Great Depression in the first place.” “These are...

The debate over free trade is riddled with myth after myth. One that keeps resurfacing, no matter how many times it is discredited, is the idea that protectionism caused the Great Depression. One occasionally even hears that this same protectionism -- specifically, the Smoot-Hawley tariff of 1930 -- was responsible in significant part for World War Two! This is nonsense dreamed up for propaganda purposes by free traders, and it can easily be debunked. Let's start by reminding ourselves of a basic fact: The Depression's cause was monetary. The Federal Reserve had allowed the money supply to balloon excessively during...

Robert Barro is a professor of economics at Harvard, and a commentator for The Wall Street Journal and Business Week. His critique of the Obama stimulus package provoked a sharp attack from Paul Krugman in The New York Times, which brought a spirited response from Barro. Basing his arguments on his empirical work, Barro takes issue with some common assumptions about the Great Depression, and how America got out of it.

Stimulating History James F. Davis, March 8, 2010 To be able to critically analyze economic probabilities, one needs to know the history of previous similar situations. For the first 125 years of our county we had no Federal Reserve Bank, no permanent personal income tax and no massive government stimulus spending. We also had virtually no inflation and the average economic downturn lasted only 10 months. In late 1913 the Federal Reserve Bank (FED) was created. It made it possible for the government to create money out of thin air. Also a permanent income tax was passed. From 1915 to...

Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt. After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years. "Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10-...

Is the Great Depression 2.0 on the way and could it last until 2032? The Return of the Great Depression explains why the author, Vox Day, believes that the economic downturn happening in the United States will get worse before it gets better.

Calvin Coolidge spent the majority of his life in politics. He was unrepentant in his commitment to individual liberty as espoused by the Constitution. Which meant he understood the value of government getting out of the way of private enterprise. Of allowing individuals to pursue their dreams without undue interference from the government. Coolidge understood that business and, therefore, America prospered when citizens knew what to expect from government. So his first determination was the politicians version of the Hippocratic oath to "do no harm," to keep government from meddling with the private sector. His second was, when things were...

Do yourself a favor and get a copy of Amity Shlaes' The Forgotten Man, A New History of the Great Depression. Barack Obama's presidency and his economic policies are placed in context once you read Shlaes' account of FDR and his policies. Written in 2007, there is no way Shlaes could have manipulated the similarities. Consider this account of the Roosevelt Administration in 1937, four and a half years after the New Deal was introduced and the economy refused to budge. She refers to this time as "a depression within the Depression. " "...the Economist would conclude...that the United States...

Do yourself a favor and get a copy of Amity Shales' The Forgotten Man, A New History of the Great Depression. Barack Obama's presidency and his economic policies are placed in context once you read Shales' account of FDR and his policies. Written in 2007, there is no way Shales could have manipulated the similarities. Consider this account of the Roosevelt Administration in 1937, four and a half years after the New Deal was introduced and the economy refused to budge. She refers to this time as "a depression within the Depression. " "...the Economist would conclude...that the United States...

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The story of the Great Depression is often told in pictures: while few people recognize the names "Smoot-Hawley" or "Schechter Poultry," photographs of bank runs and bread lines continue to pack a punch, almost 80 years after they were first snapped. But the Great Depression's position as our absolute standard for economic disaster carries an unintended consequence: The power of its images seem to overwhelm -- and minimize -- the economic troubles of our own time. After all, if it doesn't look like a Depression, how tough could things be? The problem is that Walker Evans' and Dorothea Lange's famous...

Federal Reserve Bank chairman Ben Bernanke, who appears at a confirmation hearing Thursday for a second term, is a renowned expert on the Great Depression of the 1930s and is driven to avoid a repeat of such devastation.

<p>Beyond fiscal stimulus and government bailouts, the economic recovery that appears under way may be based on little more than self-fulfilling prophecy.</p> <p>Consider this possibility: after all these months, people start to think it’s time for the recession to end. The very thought begins to renew confidence, and some people start spending again — in turn, generating visible signs of recovery. This may seem absurd, and is rarely mentioned as an explanation for mass behavior late in a recession, but economic theorists have long been fascinated by such a possibility.</p>

An excerpt of the 1924 Republican Party Platform: The prosperity of the American nation rests on the vigor of private initiative which has bred a spirit of independence and self-reliance. The republican party stands now, as always, against all attempts to put the government into business. American industry should not be compelled to struggle against government competition. The right of the government to regulate, supervise and control public utilities and public interests, we believe, should be strengthened, but we are firmly opposed to the nationalization or government ownership of public utilities. In 1924 the GOP ran Calvin "Silent Cal" Coolidge...

1931 January -- Texas congressman Wright Patman introduces legislation authorizing immediate payment of "bonus" funds to veterans of World War I. The "bonus bill" had been passed in 1924. It allotted bonuses, in the form of "adjusted service certificates," equaling $1 a day for each day of service in the U.S., and $1.25 for each day overseas. President Hoover was against payment of these funds, saying it would cost the Treasury $4 billion. February -- "Food riots" begin to break out in parts of the U.S. In Minneapolis, several hundred men and women smashed the windows of a grocery market...

The current economic crisis is considered a recession, on the verge of depression. The reality is that we are not entering another great depression and the more proper term is "The Great Collapse". What has happened in the past, usually will happen in the future. I approach this problem not with the fuzzy mathematics of the economist but with the certainty and empirical evidence of the historian. Recessions and Depressions are trying times for the citizens of a nation. Collapses are a completely different situation. An economic collapse is followed by exponential increases in misery. The more comfortable the population...

Any number of pundits claim that we have now passed the worst of the recession. Green shoots of recovery are supposedly popping up all around the country, and the economy is expected to resume growing soon at an annual rate of 3% to 4%. Many of these are the same people who insisted that the economy would continue growing last year, even while it was clear that we were already in the beginning stages of a recession. A false recovery is under way. I am reminded of the outlook in 1930, when the experts were certain that the worst of...

... The Great Depression was caused by misguided government policies adopted to avoid the "unsatisfactory conditions" signaled by the crash. The run-of-the-mill recession that ought to have followed the crash was magnified by the policies of the federal government during the administration of Herbert Hoover. In a paper for the National Bureau of Economic Research published last August, Lee E. Ohanian examines a continuing mistake during the Hoover administration that helped transform difficulty into calamity. An economics professor at UCLA, Ohanian has written numerous papers on the Depression. In one earlier paper, he pinned the persistence of high unemployment on...

This is not inside-baseball economics stuff -- don’t be afraid. Arthur B. Laffer at the Wall Street Journal has a good historical review of the Great Depression and what happened with tax rates during the period. Laffer defines the beginning of the problem, the Smoot-Hawley tariff implemented in 1930.