Great Depression

Conventional wisdom tends to treat President Hoover as a clueless advocate of laissez faire who refused to stimulate the economy in the dramatic downturn. Franklin Roosevelt, on the other hand, was the heroic leader who both saved the day and transformed the American economy through his promotion of the New Deal. …

There is little corroboration in the historical record for this simplistic storyline. … Most of what both Presidents did in fiscal policy had little impact on the Depression one way or another. … The consensus view is that FDR’s [main] policy success was the abandonment of the gold standard in 1933.

Though there is still a lively popular debate about the “true” cause of the Great Depression, there is nonetheless a strong expert consensus … The Fed’s focus on curbing speculation in the stock market by restricting lending—as well as its unwillingness to extend liquidity and expand the money supply in the face of a collapsing economy and a wave of bank panics in the early 1930s—deeply aggravated the severity and extent of the downturn.

That is John Nye.  Read and learn.

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