Myths of the Great Depression

With the current economic situtation of the US, it is important for us to reflect on history for perspective on this crisis.  The economic history of America is filled with booms and busts.  Typically, a recession or depression (sometimes called Panics), although severe, never lasted more than 4 years.  It was not until the Great Depression that America lingered in a deep economic collapse for 12 years.  So what was different about the Great Depression from other economic downturns?  For one thing, the amount of government intervention was unprecedented.  Billions of dollars in government aide and 'stimulus' did nothing to grow the economy.  In fact, it was the obstacle that prevented any recovery.  One government blunder after another could not jump-start the economy:

• Passage of Smoot-Hawley Tariff
• New Deal programs
• Passage of the Wagner Act

One of the best analysis of the Great Depression was done by the Macinac Center.  It dispells many of the myths of the Great Depression.  One being that the New Deal programs got us out of the depression.  The Macinac study lays the case that the New Deal actually made it worse.

You can find it here.