Friday, November 07, 2008

Myths About The Great Depression

Andrew Wilson shares "five interrelated and durable myths about the 1929-39 Depression":
  1. Herbert Hoover, elected president in 1928, was a doctrinaire, laissez-faire, look-the-other way Republican who clung to the idea that markets were basically self-correcting.
  2. The stock market crash in October 1929 precipitated the Great Depression.
  3. Where the market had failed, the government stepped in to protect ordinary people.
  4. Greed caused the stock market to overshoot and then crash.
  5. Enlightened government pulled the nation out of the worst downturn in its history and came to the rescue of capitalism through rigorous regulation and government oversight.
In light of the recent problems in the economy, and the rhetoric of the Presidential and Congressional races, I'd encourage you to read the whole thing. If you'd like to read more about the Great Depression, I'd recommend The Forgotten Man, by Amity Schlaes. I have yet to read the book myself, but have heard much about it and much from Ms. Schlaes herself, that I do not hesitate recommending it.

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