Great Myths of the First Great Depression

PHASE ONE: The Boom (The Roaring Twenties)

THE MYTH: The Great Moderation!
1. 2. 3. 4. The problem goes back to the war the Napoleonic War. What prosperity looks likethe nineteenth-century version What Hoover and FDR learned in their war What Churchill and Strong learned after theirs.

PHASE TWO: The Crash (1929-1932)

THE MYTH: Herbert Hoover was a laissez-faire liquidationist THE MYTH: The Fed were dithering do -nothings THE MYTH: The Problem was Overproduction and Underconsumption
Hoovers four-step programme for success: 1. Follow the New Economics and prop up wages 2. Cripple international trade 3. Tax more, and spend even more 4. New Deal-lite

PHASE THREE: Dr New Deal (1932 to 1936)

THE MYTH: Franklin Roosevelts New Deal saved America from the failure of free-market capitalism. THE MYTH: Government programmes helped lower unemployment by putting many Americans to work
Dr New Deals Prescription for success: 1. Follow Mussolini and prop up big corporations 2. The National Run Around& the Alphabet Agencies 3. Tax even more, and spend even more 4. New Deal in full!

PHASE FOUR: The Depression within a Depression (1937 to 1938)

THE MYTH: Michael Joseph Savage helped lower unemployment by putting many NZers to work THE MYTH: Thank God for FDR and Mickey Savage!
Dr New Deals Prescription to really kill off the patient: 1. The Wagner Act and the Alphabet Agencies

2. The Supreme Court and the Court Packing Saga: and then the only rabbit left was spending 3. Regime Uncertainty 4. Green shoots?

PHASE FIVE: Dr Win the War (1940 to 1945)

THE MYTH: It was the war what saved us! THE MYTH: the economy was producing more guns and more butter Americans never had it so good.
1. 22 percent of US workforce, 12 million men, in the military--most of them risking death 2. Plenty of guns, no butter. 3. Forced savings

PHASE SIX: A Miracle at Last! (1946 to 1949)

The real miraclethe one that needs explaining --was not to take twelve million from the unemployment rolls and call that prosperity, it was putting to work the ten million who came home in 1946, and out of that producing prosperity. - Robert Higgs

READINGS:
    Great Myths of the Great Depression, by Larry Reed online at www.mackinac.org/4013 James Mill on the Overconsumption and Underproduction Fallacies, intr. by George Reisman, online at www.capitalism.net/Jamesmil.pdf Herbert Hoovers Depression, by Murray Rothbard online at www.lewrockwell.com/rothbard/rothbard184.html The Dangerous Return to Keynesian Economics, by Steven Kates online (with footnotes) at www.quadrant.org.au/blogs/qed/2009/02/the -dangerous-return-tokeynesian-economics Regime Uncertainty: Why the Great Depression Lasted So Long, and why Prosperity Resumed after the War, by Robert Higgs online at www.independent.org/pdf/tir/tir_01_4_higgs.pdf Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s, by Robert Higgs online at www.independent.org/newsroom/article.asp?id=138 Keynes & Space Aliens, by Clifford Theis online at www.mises.org/daily/5559/Keynes-and-Space-Aliens