1920-21 Depression
The Audacity of Wrong
This past Wednesday Glenn Beck had a segment on the
Cure Worse Than Disease, in
which he discussed the depression of 1920-21.
As Glenn mentioned himself, I also had never
heard much about that time in United States
history. What I had heard was something about
continuing booms and busts of the economy as
America closed the western frontier, became a
world power through WWI, and had the Roaring
’20s ,which ended in the Great Depression.
Then thankfully the New Deal was issued in by
FDR, America was saved from total anarchy
until we were forced to fight Japan and those
terrible Nazis.
I had begun to question this whole New Deal salvation when I read the “The Forgotten Man: A New History of the Great Depression” by Amity Shales, earlier this year, So I wondered what I might find online, to increase my knowledge of this unknown earlier depression that Glenn had used as a model for fixing our country’s and the world’s economic mess. After some searching I came across “The U. S. Economy in the 1920s” an article by Gene Smiley of Marquette University. This is a very thorough discussion of that decade of almost twenty six thousand words and graphs that took up sixty four pages in my computer’s PDF format.
What the Smiley article showed, and as Beck addressed, the Depression that began in 1920 was much more severe that anything we have faced in the current meltdown and bailouts. Furthermore the fix of letting the markets work to rebuild, or as Glenn said, “reboot the system” accomplished an economic miracle in which unemployment fell from over 11% to less than 2% in short order.
As with our current situation, speculation in securities coupled with tight money policies, was a correct but simplistic description of the beginning of the Great Depression. However if you link the growth of the 1920s followed by the Depression of the 1930s, this broader historical context more vividly displays the reality pointed out so well in “The Forgotten Man.” In this larger context Roosevelt’s New Deal was truly the antithesis of what the economy really needed.
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I had begun to question this whole New Deal salvation when I read the “The Forgotten Man: A New History of the Great Depression” by Amity Shales, earlier this year, So I wondered what I might find online, to increase my knowledge of this unknown earlier depression that Glenn had used as a model for fixing our country’s and the world’s economic mess. After some searching I came across “The U. S. Economy in the 1920s” an article by Gene Smiley of Marquette University. This is a very thorough discussion of that decade of almost twenty six thousand words and graphs that took up sixty four pages in my computer’s PDF format.
What the Smiley article showed, and as Beck addressed, the Depression that began in 1920 was much more severe that anything we have faced in the current meltdown and bailouts. Furthermore the fix of letting the markets work to rebuild, or as Glenn said, “reboot the system” accomplished an economic miracle in which unemployment fell from over 11% to less than 2% in short order.
As with our current situation, speculation in securities coupled with tight money policies, was a correct but simplistic description of the beginning of the Great Depression. However if you link the growth of the 1920s followed by the Depression of the 1930s, this broader historical context more vividly displays the reality pointed out so well in “The Forgotten Man.” In this larger context Roosevelt’s New Deal was truly the antithesis of what the economy really needed.
Read More...