In postwar America the government’s percentage of GDP has ranged from around 18% to maybe 22%, with Obama taking it higher. By contrast the percentage of GDP spent by the Hoover and FDR administrations was maybe half of that. I’ve seen it listed as low as 6% of GDP to 12%.
Smoot Hawley has to be one of financial history’s great straw men. The US was a virtually self contained economy in 1929. International trade was less than 5% of the GDP. We were self sufficient in oil, coal, steel, foodstuffs, manufacturing, clothing. Other than coffee and bananas we had no essential imports. If Smoot Hawley had shut off all trade, which it certainly didn’t, the loss of 5% of GDP wasn’t going to result in the Great Depression.
I learned to watch the credit markets during the inflation of the 70s. Markets are sensitive to expansions and contractions of credit. A one or two percentage change in the supply of credit has a big impact. One of the more dramatic examples was Paul Volcker clamping down on the money supply at the beginning of the Reagan administration which put the US into a double dip recession. This recession ended with an explosion in August of ‘82 when Volcker reversed policy and poured money into the economy.
But nothing that went on in the 70s or since has come close to rivaling the 30% collapse of the American money supply that took place during the last three years of Hoover. It wouldn’t have mattered what Hoover had tried to do. This was a monetary tidal wave and he was pretty much irrelevant. It takes years to clear out the bad accounts and for the economy to right itself. It will take years for the damage created by the housing bubble to cease harming the economy. A bad President can get in the way and create other new problems, but Presidents have limited ability to move the economy.
I don't think you understood my point. It was more than this GDP stuff, but the government meddling itself.
You disagree that the Federal Reserve caused the 1929 crash; however, Conservative and Libertarian sources take issue with you. Maybe they're wrong and John Kenneth Galbraith is right about the 1929 crash. Maybe you should be on a different website.