Tuesday, 24 July 2012

3 Great Myths of the Great Depression and Roosevelt’s New Deal

Historian Stephen Davies ably punctures three persistent myths about the Great Depression.

Myth #1: Herbert Hoover was a laissez-faire president, and it was his lack of action that lead to an economic collapse. Davies argues that in fact, Hoover was a very interventionist president, and it was his intervening in the economy that made matters worse.

Myth #2: The New Deal ended the Great Depression. Davies argues that the New Deal actually made matters worse. In other countries, the Great Depression ended much sooner and more quickly than it did in the United States.

Myth #3: World War II ended the Great Depression. Davies explains that military production is not real wealth.; wars destroy wealth, they do not create wealth. In fact, examination of the historical data reveals that the U.S. economy did not really start to recover until after WWII was over.  

1 comment:

  1. Re Myth #1, wasn't it Hoover who wanted almost dictatorial power for the President? I'm sure I read somewhere about him wanting to "interpret the Constitution" in such a way as to afford the President as much power as he could possibly wrest.

    Re Myth #2, there was a stock market crash a decade before the 1929 crash. Stock prices fell farther and faster than in 1929, but because the government did NOT intervene, the recovery was also much faster. Likewise, contrast the Reagan Recovery with the Obama Stagnation.


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