Thomas Sowell spells it out in plain terms

Another great depression

the unemployment rate at 5 percent in November 1929, a month after the stock market crash. It hit 9 percent in December– but then began a generally downward trend, subsiding to 6.3 percent in June 1930.

That was when the Smoot-Hawley tariffs were passed, against the advice of economists across the country, who warned of dire consequences.

Five months after the Smoot-Hawley tariffs, the unemployment rate hit double digits for the first time in the 1930s.

This was more than a year after the stock market crash. Moreover, the unemployment rate rose to even higher levels under both Presidents Herbert Hoover and Franklin D. Roosevelt, both of whom intervened in the economy on an unprecedented scale.

Before the Great Depression, it was not considered to be the business of the federal government to try to get the economy out of a depression. But the Smoot-Hawley tariff– designed to save American jobs by restricting imports– was one of Hoover’s interventions, followed by even bigger interventions by FDR.

In other words, the evidence suggests that it was not the “problem” of the financial crisis in 1929 that caused massive unemployment but politicians’ attempted “solutions.” Is that the history that we seem to be ready to repeat?…

Read it all.  Sowell has always had a way of breaking down myths and putting facts on the table.  You can decide for yourself if government involvement in the economy is a good thing.  I know what I think.


4 thoughts on “Thomas Sowell spells it out in plain terms


    Wikipedia has a lot of information on what may have caused the great depression including this sort of apology from Ben Bernanke.

    “ Let me end my talk by abusing slightly my status as an official rep of the federal reserve. I would like to say to Milton and Anne: Regarding the great depression. You were right, we did it . We’re very sorry but thanks to you, we wont do it again.”

    I don’t think that any one institution or action can be the blame when there were many contributing factors..
    JB says “Is that the history that we seem to be ready to repeat?…” According to Bernanke we wont …. I say bring it down and lets have a redo. People need to be humbled again anyway

  2. Read “The Forgotten Man” by Amity Shlaes. She goes into great, great detail about each policy, each “experimental” move by FDR and Hoover. And even better, she talks about their advisers and their lives that led them down the road to creating the Great Depression.

    The spooky thing was reading that book during this crises and hitting a passage and “swearing” that I just heard some such politician or political appointee say the same exact thing on TV.

    I highly suggest it for anyone interested in the realities of history and the present government + economy + socialist/progressives = recession/depression.


  3. Thank you for the reference. I’ll check it out. So what was said that reminded you of what you had just read in the book?

  4. I don’t think that any one institution or action can be the blame when there were many contributing factors..

    This is like the argument that because warfare contains many variables that produce friction and all variables cannot be known cause of the Fog of War, that this means there is not a set of key contributing factors leading to tactical and strategic and logistical bottleneck.

    There are always going to be some key causes, the problem is finding them. It doesn’t have to be one, but it ain’t “many” either.

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