Comments on: The 1920s, 50s and 80s – three good US decades

By: Alisa

Alisa — Tue, 30 Oct 2012 21:43:00 +0000

The US. So it began the same year of the Crash, but they are not related? Or is 1929 contested as its beginning?

By: Laird

Laird — Tue, 30 Oct 2012 20:19:03 +0000

Most economists date it from 1929 to 1939, although to some extent it depends upon the country you’re talking about.

By: Alisa

Alisa — Tue, 30 Oct 2012 17:48:44 +0000

Right. So does you had an answer?

By: Laird

Laird — Tue, 30 Oct 2012 15:59:53 +0000

Than you should have used “did”, not “does”!

By: Alisa

Alisa — Mon, 29 Oct 2012 22:31:24 +0000

You did know that I meant the previous one, right?:-)

By: Laird

Laird — Sun, 28 Oct 2012 21:57:55 +0000

2009, Alisa.

By: Alisa

Alisa — Sun, 28 Oct 2012 09:03:20 +0000

So when does – technically speaking – The Great Depression begin?

By: Paul Marks

Paul Marks — Sun, 28 Oct 2012 06:02:35 +0000

ALL monetary expansion “booms” must end in bust.

It is not the “collapse in the money supply” that is the problem it is THE INCREASE IN THE MONEY SUPPLY IN THE FIRST PLACE that is the problem.

And who caused the monetary “boom” – Benjamin Strong.

But that does NOT mean that Strong caused the “Great Depression”.

What caused the bust to turn into the Great Depression (unlike the bust of 1921 and every previous bust since that of 1819) was the failure to recover from the bust. The failure of markets (especially labour markets) to clear.

And that failure was caused by the interventionist policies of Herbert “The Forgotten Progressive” Hoover and Franklin Roosevelt.

The view that things would have O.K. if only the money supply had not been allowed to collapse……

That is exactly the point of view that is destroying the world right now.

Push interest rates to zero, throw money from helecopters – do ANYTHING rather than let “the money supply” (i.e. the bank credit bubble) go. That is the modern policy.

And it is a policy that will lead to collapse – a lot more radical form of collapse than a “collapse of the money supply”.

By: Laird

Laird — Sun, 28 Oct 2012 04:32:14 +0000

Bruce, it seems to me that you’re conflating the Crash of 1929 with the Great Depression. The two are far from the same thing; in fact, it can be plausibly argued that they were wholly unrelated.

By: Bruce

Bruce — Sat, 27 Oct 2012 22:47:10 +0000

It's far from clear to me that Strong's policy caused the Great Depression, and I doubt you'd find a consensus among economists supporting that view. I think a stronger case can be made that the U.S. holding a fixed price in gold for the dollar, as demand for gold dramatically increase due to economic uncertainty around the world, played a much larger role. Countries that abandoned gold parity began their recoveries long before the U.S. did. See, e.g., The Gold Standard, Deflation, and Financial Crisis in the Great Depression: An International Comparison

By: Laird

Laird — Sat, 27 Oct 2012 05:41:11 +0000

Bruce, there’s a lot of Rothbard that I disagree with, and if he actually said that Strong caused the Great Depression I agree with you. (I don’t know whether he did or not.) But I think it is clear that Strong’s monetary expansion caused the Crash of 1929. Which I think is all that Paul said.

By: Bruce

Bruce — Fri, 26 Oct 2012 10:27:12 +0000

I’ve never bought into Murray Rothbard’s view that Strong caused the Great Depression. He had been dead for a year when the market collapsed, and it was the Feds intervention to prevent the outflow of gold to Europe that resulted in a massive collapse of the money supply. The Feds actions were in contradiction to what had been Strong’s policies.