First of all, the economic events of 1920-21 and 1928-29 were caused by totally different circumstances. If you went to a doctor for a cold, would you question if he said that he is a surgeon, so he will have to amputate?
In 1920-21 America was transitioning from a war time to a peace time economy.
Factors that economists have pointed to as potentially causing or contributing to the downturn include: troops returning from the war which created a surge in the civilian labor force, a decline in labor union strife, a shock in agricultural commodity prices, tighter monetary policy, expectations of deflation.
And it was a domestic event.
1929 Stock Market Crash was a world-wide event of much bigger proportions.
On October 29, 1929, Black Tuesday hit Wall Street as investors traded some 16 million shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors. In the aftermath of Black Tuesday, America
and the rest of the industrialized world spiraled downward into the Great Depression (1929-39), the deepest and longest-lasting economic downturn in the history of the Western industrialized world up to that time.
Second, We now KNOW what NEVER works... what Herbert Hoover and Andrew Mellon did to bring on the Great Depression...liquidate, and austerity. They listened to the predecessors of the 'Austrian' school. Unless you also believe Medieval blood letting save lives?
Economic Policy Under Hoover
Throughout this declinewhich carried real GNP per worker down to a level 40 percent below that which it had attained in 1929, and which saw the unemployment rise to take in more than a quarter of the labor forcethe government did not try to prop up aggregate demand. The only expansionary fiscal policy action undertaken was the Veterans Bonus, passed over President Hoovers veto. That aside, the full employment budget surplus did not fall over 192933.
The Federal Reserve did not use open market operations to keep the nominal money supply from falling. Instead, its only significant systematic use of open market operations was in the other direction: to raise interest rates and discourage gold outflows after the United Kingdom abandoned the gold standard in the fall of 1931.
This inaction did not come about because they did not understand the tools of monetary policy. This inaction did not come about because the Federal Reserve was constrained by the necessity of defending the gold standard. The Federal Reserve knew what it was doing: it was letting the private sector handle the Depression in its own fashion. It saw the private sectors task as the liquidation of the American economy. It feared that expansionary monetary policy would impede the necessary private-sector process of readjustment.
Contemplating in retrospect the wreck of his countrys economy and his own presidency, Herbert Hoover wrote bitterly in his memoirs about those who had advised inaction during the downslide:
The leave-it-alone liquidationists headed by Secretary of the Treasury Mellon
felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.
He held that even panic was not altogether a bad thing. He said: It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.
The Federal Reserve took almost no steps to halt the slide into the Great Depression over 192933. Instead, the Federal Reserve acted as if appropriate policy was not to try to avoid the oncoming Great Depression, but to allow it to run its course and liquidate the unprofitable portions of the private economy.
In adopting such liquidationist policies, the Federal Reserve was merely following the recommendations provided by an economic theory of depressions that was in fact common before the Keynesian Revolution and was held by economists like Friedrich Hayek, Lionel Robbins, and Joseph Schumpeter.
Third, you keep forgetting that your right wing austerity approach doesn't work. FDR found that out. FDR had his own right wing regressives to contend with, HERE is where that led.
The Recession of 19371938 was a temporary reversal of the pre-war 1933 to 1941 economic recovery from the Great Depression in the United States. Economists disagree about the causes of this downturn, but agree that
government austerity reversed the recovery.
wiki
1. Let's begin with your admission that the steps Harding took on just as great a recession ....worked.
2. According to another Liberal star, Arthur Schlesinger, and to the others, the evil
industrialists of the 1920s kept pay low and prices high, so that workers didn't have the money to buy the products they were making.
a. "Managements disposition [in the 1920s] to maintain prices...meant that workers and farmers were
denied the benefits of increases in there own productivity. The consequences was the relative decline of mass purchasing power."
Arthur Schlesinger, "The Crisis of the Old Order." Understanding Bushonomics | Center for American Progress
b. " Insofar as one accepts
the theory that underconsumption explains the Depression, and I do, then one can say that the
Presidents of the 1920's are to blame...."
"The FDR Years: On Roosevelt and His Legacy,"
By William Edward Leuchtenburg, p.210
BTW, Professor Leuchtenburg trained more New Deal historians than any one!
Lies meant to convince dolts like you.
3. Now let's show that the provenance of
FDR's failures were all based on Liberal lies.
I have said that, in order for the
FDR's 'underconsumption thesis' to be true, these criteria must be met:
a. During the 1920s the rich had to be getting a significantly larger proportion of the national income. "... corporate profit resulting from this period was enormous..."
b. Employees must have been receiving a smaller share of corporate income. "... Very little of it went into increased wages; the worker was forgotten,..."
c. Consumers must have been consuming less of the GNP in the late '20s than in 1920. "... there was little or no drop in the prices that the consumer had to pay... The consumer was forgotten....."
Those quotes are all FDR's
Time to slice and dice the Liberal propaganda.
d. In 1921, the top 5% earned 25.47% of the nation's income...in 1929, the top 5%'s share skyrocketed all the way up to ......26.09%!!!!
e. Corporate profits? They averaged 8.2% from 1900 to 1920. But what about from 1920 to 1929??? They remained at 8.2%.
For those in Rio Linda, that means that there was no upsurge in said profits during the decade.
f. But what about employee wages during the decade of the '20s?? They rose...from 55% to 60% of corporate income.
g. Wait...what about the percentage of GNP that went to consumption? Bet it fell, huh? Wrong.
It rose from 68% in 1920 to 75% in 1927, 1928, and 1929.
"Coolidge and the Historians," by Thomas B. Silver, p.124-136, and Folsom, "New Deal or Raw Deal," p.34-35
You've been raised like a mushroom....kept in the dark and fed you-know-what.
OK....last chance to answer the question I posed.
