These Eight Words Helped Cause the Great Depression

[rangerrebew]

These Eight Words Helped Cause the Great Depression

 
07/09/2018Hunter Lewis

Can the entire story of the worst economic disaster in American history really be told from just eight words in a political party’s platform? In this case, yes.

Here are the fateful words that introduced the second section of the Republican Party's 1932 platform, right after a waffling plank on prohibition: “We believe in the principle of high wages.”

This was Herbert Hoover speaking. His most cherished economic belief was that wages could not be allowed to fall, and after the Crash of 1929 he vigorously jawboned business leaders to keep wages up. It was not just a question of persuasion. He made it clear that if businesses did not do as he demanded, legislative wage controls would swiftly follow. Business leaders were afraid to defy this edict, and did their best to keep wages where they had been.

https://mises.org/wire/these-eight-words-helped-cause-great-depression

[Free Vulcan]

Economic thinking was very incomplete back then. Hoover made this and a number of other mistakes, like raising taxes. People didn't understand that prices and wages falling across the board yielded the same purchasing power, and should be left to float.

[Joe Wooten]

It is also funny on how Roosevelt ran against Hoover's policies, and then once in office, doubled down on the same crap. Amity Schlaes book "The Forgotten Man" was a very good read.

[Fishrrman]

From the 1924 Republican Party platform:
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We reaffirm our belief in the protective tariff to extend needed protection to our productive industries. We believe in protection as a national policy, with due and equal regard to all sections and to all classes. It is only by adherence to such a policy that the well being of the consumers can be safeguarded that there can be assured to American agriculture, to American labor and to American manufacturers a return to perpetrate American standards of life. A protective tariff is designed to support the high American economic level of life for the average family and to prevent a lowering to the levels of economic life prevailing in other lands.

In the history of the nation the protective tariff system has ever justified itself by restoring confidence, promoting industrial activity and employment, enormously increasing our purchasing power and bringing increased prosperity to all our people.