Why You've Never Heard of the Great Depression of 1920

You Tube/The Business Insider ^ | 10/12/09

[FromLori]

n this fascinating speech, economist Thomas Woods explains why you've never heard of the Depression of 1920. Because it was over within a year, as the government let it run its course.

The first year of the 1920 Depression was worse than that of 1929. Conditions were horrible. Yet due to President Woodrow Wilson's stroke near the end of his term, very little was done by the government to stop the economic decline. By the summer of 1921, recovery was on the way. It's too bad we're scared into thinking that economic downturns automatically require bold government action. History shows they don't necessarily require any.

[dfwgator]

You can bet if a Republican were President in 1920, you would have heard about it.

[SolidWood]

Laissez Faire enabled the decade of prosperity.
Etatist Corporatism (both Hoover and Roosevelt) enabled the Great Depression.

[nickcarraway]

This is a typical postwar recession.

[Sergio]

Bookmark.

[BertWheeler]

If FDR was president then, his policies would have made the 1920’s the decade of the gread depression.

FDR’s policies created the Depression, not the stock market crash.

[Canedawg]

“It’s too bad we’re scared into thinking that economic downturns automatically require bold government action.”
*****************

You bet. There are some people who feel the need to control the economic climate— and some who aspire to control the meteorological climate.

[SolidWood]

FDR made it terribly worse and extended the Depression (making it Great). But it was Hoover (who was not a laissez-faire “Capitalist” but an etatist lite) who argueably set the ground. Many of his policies were similar to FDR’s.

Hoover’s most disastrous action was the forcing up of labor wages. Employers had to cut investment and the number of workers.

Also harmful were the Smoot-Hawley tariffs and increased “stimulus” public works spending.

Add to this the tight monetary policy of the Fed and you have the conditions for a Depression, which would have been over by 1935, hadn’t it been for Roosevelt.

[Buckeye McFrog]

supposedly Mrs. Wilson was secretly running the show clear up till March 4, 1921, the former Inauguration Day.

A year later and Warren G. Harding, Republican, would have been in office. Oft-derided as our worst President ever (and buried across the street from a dead shopping mall in Marion, Ohio for his efforts)

[ntmxx]

In a competition between political fiscal policy and basic Econ 101; Classic Economics wins every time, this is the primary reason economics within “Government Schools” is not taught; instead, identity politics and anything anti-American, all the time. So, just keep doing the same and watch for results to improve.

[fallujah-nuker]

The first year of the 1920 Depression was worse than that of 1929. Conditions were horrible.

In the office of many financial planners you will see a graph that starts out in 1921 with the DJIA at around 65, and the lesson to be learned from the chart is that even accounting for the crash of 1929 the long term appreciation in stocks has been good. What goes unstated in the chart is that if the starting point was two years earlier, the DJIA would have started out at close to 120, which would cut the appreciation by nearly half. Of course starting out the graph at a peak would be as misleading as starting it out in a trough.



Using the same data on the DJIA one could make the argument that stocks are a good investment, or that they are a poor investment. Sort of like the old maxim that "figures don't lie, but oh how liars can figure." To be accurate you would want to start the chart at a point that averages out the peak and trough, somewhere around 90, I'd be leery of entrusting my savings to someone who uses Dow Jones 65 as a starting point, they've demonstrated poor ethics for someone who has a fiduciary responsibility.

[Neil Peart]

Thomas Woods is actually a historian, not an economist.

[fallujah-nuker]

FDR’s policies created the Depression, not the stock market crash.

As much as I disagree the man, it was not FDR who made the depression, it was FED. They created the bubble in the twenties, popped the bubble and then deflated the money supply by one third between 1928 and 1933.

[RoadTest]

The 1929 crash was deliberately caused in order to allow Franklin D. Roosevelt to usher in Socialism, in the form of Social Security and all the Federal Government Agencies that ensued.

[PeterPrinciple]

I’m from the government and I am here to help you..............

[camp_steveo]

Not-So-Great Depression

by Jim Powell

http://www.cato.org/pub_display.php?pub_id=9880

Get your education. :D

~SC

[Sybeck1]

Calvin Coolidge was the man!

[Paige]

Wilson was far too busy pushing for the U.S. to become part of the League of Nations. In many ways, Obama reminds me of Wilson, absolutely full of himself and a dedicated Marxist.

[Wuli]

As true as this may be, the causes of a major economic decline are relevant to its course and the recovery from it - in other words they are not all equal.

That said, sure, it remains true that more recovery can come, sooner or later, from natural correction of prices and values than from government protections for or inducements toward any given prices and values, as if just because certain prices or values are current they are more “correct” than something else, or something else, something arbitrary is more “correct” just because the political class says so. The sooner natural markets can sort that out, without the corruption of politics, the better.

The problem, sometimes, is that prior government activity can be one of the causative factors and therefore for the government to simply and completely, always stand pat may not be completely safe or prudent either, in some cases.

Unfortunately, of course, we on this forum know that when an economic downturn starts, government intervention seldom begins with correcting the prior negatives in the role of government intervention itself. Those with the government levers are always looking to shift the focus to secondary players, and blame insufficient authority in their own sphere as the culprit.

Even when those authorities do need to be updated, it has been myth that the cure must always be more authority, when, if those authorities do need correcting, it is seldom an increase in the level or weight of authority that is needed, but simply refocusing of existing authority, to adjust for modern means and methods.

[Sequoyah101]

“Using the same data on the DJIA one could make the argument that stocks are a good investment, or that they are a poor investment. Sort of like the old maxim that “figures don’t lie, but oh how liars can figure.””

Or if one keeps saying something long enough he will eventually be correct.