Posted on 01/02/2020 8:24:17 AM PST by Maceman
It is a cliché that if we do not study the past we are condemned to repeat it. Almost equally certain, however, is that if there are lessons to be learned from an historical episode, the political class will draw all the wrong ones — and often deliberately so.
Far from viewing the past as a potential source of wisdom and insight, political regimes have a habit of employing history as an ideological weapon, to be distorted and manipulated in the service of present-day ambitions. That's what Winston Churchill meant when he described the history of the Soviet Union as "unpredictable."
For this reason, we should not be surprised that our political leaders have made such transparently ideological use of the past in the wake of the financial crisis that hit the United States in late 2007. According to the endlessly repeated conventional wisdom, the Great Depression of the 1930s was the result of capitalism run riot, and only the wise interventions of progressive politicians restored prosperity.
Many of those who concede that the New Deal programs alone did not succeed in lifting the country out of depression nevertheless go on to suggest that the massive government spending during World War II is what did it.1 (Even some nominal free marketeers make the latter claim, which hands the entire theoretical argument to supporters of fiscal stimulus.)
The connection between this version of history and the events of today is obvious enough: once again, it is claimed, wildcat capitalism has created a terrific mess, and once again, only a combination of fiscal and monetary stimulus can save us.
In order to make sure that this version of events sticks, little, if any, public mention is ever made of the depression of 1920–1921. . . .
(Excerpt) Read more at mises.org ...
When my daughter was in high school a few years ago, her history class (actually taught by a guy who personally grew up around Howard Zinn), only "taught" how FDR's New Deal saved America. It wasn't just that one teacher's course - it was the official curriculum. When I was in college, I was taught in a history course that FDR saved American capitalism. I knew that wasn't true, and argued with the prof about it, but when a related question appeared on a test, I simply regurgitated that teaching -- wlthough I added a parenthetical statement saying it was historically incorrect. That way, I at least had proof that I had "learned" the commie couse material.
Anyway, it's an outrage that the Depression of 1920 is completely ignored in American history courses.
Maybe we should start a movement to send this article to all "Green New Deal" supporting Democrats (starting with AOC). We should flood their inboxes with it.
A “History” course that taught lies about history. Typical. Unfortunately the kids no longer know it is a lie.
Little if any government “help”, cut federal spending, no “stimulus”, no deficits... let the market decide and correct... and things improved quickly.
How can politicians get rich on that “dumb” policy?
Then... Harding was accused of scandal and died in 1923. Hmmm???
My kid does. I monitored what she was being taught like a hawk, and when it came time for her to submit a paper about the New Deal, I gave her my copy of FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression, and helped her research the topic to blow the teacher's assertions to smithereens.
To his credit, he gave her an A for her paper, and also an A for the course.
I also turned her and her teacher on to the famous hip-hop video showing the intellectual battle between Frederich A. Hayek and John Maynard Keynes Fear the Boom and Bust: Keynes vs. Hayek - The Original Economics Rap Battle!
Liberals have employed themselves to the destruction of the free market and the federal reserves over the last 50 years. The housing debacle of the late 90’s is an example of the efforts to destroy the middle and lower tier earners with lies and threats. All happening at a time when they could lose both houses of congress and the POTUS. And when they did, the lies got worse and even on a time when money was getting back to the consumer, destroyed the trust and faith in the economy with punishment to the consumer.
AS for the new deal, In the short term, it helped improve the lives of people suffering from the events of the depression. In the long run, New Deal programs set a precedent for the federal government to play a key role in the economic and social affairs of the nation. The first in the efforts toward socialism. It wasn’t a help, it was a planned takeover.
rwood
Great article, thank you for posting it.
The “average” American not only doesn’t know—they don’t care about economics. The TV and internet’s tell them what to believe and never explain why.
There was an old joke about people just wanting a full belly, a warm bed, and a warm place to shit. It’s not really a joke. That describes MOST Americans today.
Money supply should change in a reactionary manner, not proactively. Interest rates should then be allowed to float naturally, with steps taken to prevent cornering or manipulation of financial markets.
Like the climate, there’s too much going on in an economic system for people, even with big computing power, to predict anything with certainty. Therefore, reaction is survival.
The newly formed Federal Reserve was trying to model the gold standard. And they tried to reign in money growth. They repeated the mistake 10 years later causing the Great Depression.
For a more balanced discussion of the causes of the 1920 depression see this Wikipedia article.
My father born in 1919 told me a story about having to carry home a $5.00 order from the butcher shop, he had to make two trips.
His family was lucky as Gramps was a blacksmith and didn’t suffer as much as most.
Amazing cut spending cut taxes and the economy exploded with 3.5% unemployment. Who would have thought?
In the 30’s they jacked spending by around 50% and the economy struggled. Just weird.
Another “gift” from the worst President in history, Woodrow Wilson.
I didn’t know too much about him but my mother told me my grandparents hated him....
I think the Federal Reserve has been generally great.
Much better than the Deflationary Depressions every 20 years under the gold standard.
The Fed printed at least 4.5 trillion fiat dollars during quantitative easing.
Do you think this will create a problem worse than the Deflationary Depressions every 20 years under the gold standard?
No. The FED can unprint that money just as easy as it printed it. IF the conditions ever warrant it.
A growing population and economy needs a growing currency to avoid deflation. That's one of the problems with a gold standard, it usually doesn't grow fast enough causing deflation and deflationary depressions.
Jobs and industries coming back to America and people returning to work, demanded an expansion of the money supply.
Like the weimar republic?
That's what I was taught. When I finally got educated (by myself) I learned that Hoover and FDR had essentially the same approach to ending the depression and neither one of them worked at all and likely extended it.
But to paraphrase Ronald Reagan, its not that liberal history professors are uninformed, it's just that so much of what they know is wrong.
Good for you, nicely done sir. One of the lefts priorities was to infiltrate the and corrupt education. No one can deny the success they have had.
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