Liberty
Stephen Cox
July 26, 2018
I have long been a fan of the Panic of 1893, which is the usual name for the great depression of the 1890s. When I say “great†I mean it is comparable by all available measures (business losses, unemployment, political turmoil) to the Great Depression of the 1930s — with two exceptions. First, the depression of the 1930s lasted for more than ten years, ending only with the start of the Second World War in Europe; the depression of the 1890s lasted less than half as long. Second, in the 1930s the federal government intervened massively to try to end the depression, whereas the government of the 1890s did as little as it could.
These two exceptions are closely related. In 1893 and after, President Grover Cleveland had the political and above all the intellectual courage to allow prices to sink until recovery could begin. He devoted his best efforts to stabilizing the dollar, so that sound money and real prices could beget confidence, and confidence could beget reinvestment. This happened. But in 1929 and after, Presidents Herbert Hoover and Franklin Roosevelt were guided by the economic ignorance and sheer quackery of their times (and ours); they intervened to keep prices up and bail out bad investments — using money, of course, extorted from the people who had made good investments. Roosevelt’s subsidies extended to the destructive political ideas of his time; he encouraged political action to fulfill the borderline-crazy terms of his first inaugural address, in which he announced:
The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.More...
http://libertyunbound.com/node/1875