[TheThinker]

First, I think that the we have a tighter rein on the money supply now and have learned lessons from the depression. Second, Hoover is almost always blamed for the depression even though illegal gold speculation, drought and communist fanaticism was taking root. Could it be because he was a Republican. Hmm...

[Freedom4US]

Honest historians have changed the perception somewhat of Hoover in recent years. The prevailing view today is that FDR basically expanded upon Hoovers’ economic prescriptions on a much bigger scale. Remember, FDR campaigned upon a “sound money” platform too.

The thinking then, was the US was ripe for revolution or dictatorship, the experiment in self-government had failed, and the government had to do something to alleviate the suffering and unemployment.

[arthurus]

A tighter rein? We have been pumping up the money supply with wild abandon since 2000.

[jmeagan]

I have a very different take on the cause of the Great Depression. Believe it or not, it was the internal combustion engine.

Small multi purpose tractors came in around the early 1920’s. Farmers in the flat lands of the mid west could plant 400-500% more acres. The former profitable, smaller eastern farms could no longer compete. As a result, the agricultural sector of our economy, over 20% at that time, was in a depression by 1927. Ford did not produce any tractors in the US that year.

The transportation sector of our economy also took a huge hit because of the huge increase in productivity caused by the internal combustion engine. Even a 20-30 HP truck could do the work of many horses and wagons. Plus they could do it faster.

Economies can deal with smaller incremental changes, but rapid change, caused by the internal combustion engine, overwhelmed our economy.

When a down turn in manufacturing combined with the recessions/depressions in the farming and transportation sectors, we got the start of the Great Depression.

Both Hoover and FDR made changes that either made things worse or prolonged the depression.

Most economists scoff at the idea that an increase in productivity could cause a depression, but there has never been a time in economic history when the productivity increased such a large amount in such a short period of time.

[AndyJackson]

First, I think that the we have a tighter rein on the money supply now and have learned lessons from the depression.

Some of us might beg to differ. Here is M3 (broad money, not just cash and checking, projected from Federal Reserve data since the Fed stopped publishing the actual number.