How Progressives "Think"
The Coolidge 20's: Couldn't find an unemployed person. Bad! BAD! BAD!
The FDR Depression: 20% average unemployment over his first 2 terms. The Messiah has returned to save Capitalism!!
Pretty fucked in the head, right?
MORE conservative myth making, I'm shocked
You realize the 1920's mirrored Dubya's period right? Cheap and easy credit without regard top regulators or the bubble economy they created?
When the lack of demand (because of low wages) that had been created because of the war interrupted the Harding/Coolidge bubble, ARTIFICIALLY built on the lack of demand of the war period, then the Banksters saw the war bond money and decided to allow the average person to invest by leverage, it popped
FDR? Steady increase every year, until he listened to the GO/conservative deficit hawks in 1937 and cut spending 10% and took US back into the GOP great depression!
The perfect Liberal Total Reality Inverse.
There was no Bubble economy in the 1920's we had at least two transformative technologies: Electricity and mass production driving the economy.
Your "bankster" stuff is just ignorant Marxist spewage
The GOP had NOTHING to do with the FDR Depression, they were bystanders. FDR owns it all
Housing Bubble
The famous stock market bubble of 19251929 has been closely analyzed.
Less well known, and far less well documented, is the nationwide real estate bubble that began around 1921 and deflated around 1926. In the midst of our current subprime mortgage collapse, economists and historians interested in the role of real estate markets in past financial crises are reexamining the relationship of the first asset-price bubble of the 1920s with the later stock market bubble and the Great Depression that followed.
Bubbles, Panics & Crashes ? Historical Collections ? Harvard Business School
The housing bubble during the Great Depression was caused by overvaluation of properties and easy access to credit.
Sound familiar?
Greater credit availability makes the economy more sensitive to any shocks, according to a recent study by Raghuram Rajan at the University of Chicago and Rodney Ramcharan of the Federal Reserve Board.
In the 1920's, anyone could get a big loan for a farm or a house. But when the markets tanked and people lost their jobs they found they couldn't sell their property for the same value they bought it.
Here's what the study had to say about the effects of easy lending on the economy:
Our evidence suggests that the rise in asset prices and the build-up in associated leverage was so high that bank failures (resulting from farm loan losses) were significantly more in areas with greater ex ante credit availability.
Moreover, the areas that had greater credit availability during the commodity price boom had depressed land prices for a number of subsequent decades probably because farm loan losses resulted in the failure of banks that lent to farmers, and depressed agricultural credit in subsequent decades.
Great Depression Real Estate Bubble - Business Insider
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Total debt to GDP levels in the U.S. reached a high of just under 300% by the time of the Depression. This level of debt was not exceeded again until near the end of the 20th century
Causes of the Great Depression
1. Stock Market Crash of 1929
Many believe erroneously that the stock market crash that occurred on Black Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression.
2. Bank Failures
Throughout the 1930s over 9,000 banks failed. CAN YOU SAY EASY CREDIT AND DEBT
First, American firms earned record profits during the 1920s and reinvested much of these funds into expansion.
By 1929, companies had expanded to the bubble point. Workers could no longer continue to fuel further expansion, so a slowdown was inevitable.
While corporate profits, skyrocketed, wages increased incrementally, which widened the distribution of wealth.
The richest one percent of Americans owned over a third of all American assets. Such wealth concentrated in the hands of a few limits economic growth. The wealthy tended to save money that might have been put back into the economy if it were spread among the middle and lower classes. Middle class Americans had already stretched their debt capacities by purchasing automobiles and household appliances on installment plans.
There were fundamental structural weaknesses in the American economic system.
Banks operated without guarantees to their customers, creating a climate of panic when times got tough. Few regulations were placed on banks and they lent money to those who speculated recklessly in stocks. Agricultural prices had already been low during the 1920s, leaving farmers unable to spark any sort of recovery.
The Great Depression [ushistory.org]
