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Mandatory reading: 1920-21 depression

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Wheylous Posted: Mon, Oct 24 2011 8:08 PM

This is an order from high up in the Party.

Thou must read this article:

The Forgotten Depression of 1920

The Party

 

I realize it's a long article (takes ~ 15 minutes to read), but here is why you should read it:

- Explains why Harding's free market policies helped to quickly, efficiently, and thoroughly end the 1920-21 depression

- Explains basic problems of monetary and fiscal stimulus

- Explains that the 1920-21 depression was set up by large government monetary expansion

Great evidence to use in any argument.

Best article I've read this month by far.

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Wheylous replied on Mon, Oct 24 2011 8:26 PM

Also relevant:

The Depression You’ve Never Heard Of: 1920-1921

This is shorter and specifically contrasts the 1920-21 depression with the Great Depression and presents evidence against Keynesian policies and monetarian intervention.

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John James replied on Tue, Oct 25 2011 12:38 AM

 

 

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Wheylous replied on Tue, Oct 25 2011 8:48 AM

Question: at what time did the FED begin the inflationary policies that caused the GD? Did Coolidge want this? Was he fiscally conservative but monetarily liberal?

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Wheylous replied on Wed, Oct 26 2011 5:15 PM

To add another question:

How would you respond to this:

http://socialdemocracy21stcentury.blogspot.com/2010/10/us-recession-of-19201921-some.html

This diagram seems to discredit his claim that looser monetary policy helped end the recession:

http://imageshack.us/photo/my-images/33/discountrates1920depres.png/

Thanks.

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Wheylous:
Question: at what time did the FED begin the inflationary policies that caused the GD? Did Coolidge want this? Was he fiscally conservative but monetarily liberal?

I'm actually not sure about this one.  I haven't read them myself, but my first thought as to the best places to start looking would be Rothbard's A History of Money and Banking in the United States, and Friedman and Schwartz's A Monetary History of the United States.  The chapter on the Great Depression in Friedman's work was published as a stand-alone paperback entitled The Great Contraction, 1929-33...but as you can guess, he's talking about the contraction in the money supply...and obviously the time frame is too late as well, so you may have to find a copy of the full work to get answers on the lead up to the Crash.

A comparison of the two treatises is here.

Another place to look would be Rothbard's America's Great Depression.  Obviously it's not focused on this topic, but he does mention what you're interested in.

 

To add another question:

How would you respond to this:

http://socialdemocracy21stcentury.blogspot.com/2010/10/us-recession-of-19201921-some.html

This diagram seems to discredit his claim that looser monetary policy helped end the recession:

http://imageshack.us/photo/my-images/33/discountrates1920depres.png/

Thanks.

This piece was actually brought up in a thread from the beginning of this year, in which a user actually started the discussion by offering his critique on a paper by resident Keynesian blogger Daniel Kuehn.  I'd recommend checking that one out, as well as some of the other threads on this topic.  The first one linked below is where discussion of the paper first began, and the second is obviously the thread dedicated to it (where this blog post you're asking about is discussed as well).

A Question on the Depression of 1920

Daniel Kuehn's Paper on the 1920-21 Depression

Depression of 1920?

1920 Depression. Self-correcting, or Fed induced and cured?

The Depression of 1920-21 ended with a huge rate cut by The Fed. Please explain

 

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