Talk:Great Depression

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Contents

Done!

Have at it, and I know you all will. Maybe someone else will be willing to take a whack at the New Deal, and Recovery headings....--TK 23:37, 17 March 2007 (EDT)


Possible inconsistency

Quickly scanning over this article (nice job, by the way), something jumped out at me. Mellon's "rottenness" quote appears in two different sections, with the first section implying Hoover supported Mellon's liquidationism ("Hoover had been one of the most enthusiastic proponents of "liquidationism" during the Great Depression"), and the second implying he rejected it (Mellon lost out and was packed off). Or maybe I'm just confused.--Conservateur 18:34, 22 March 2007 (EDT)

  • A politician being inconsistent? LMAO! I think he did (support) and then they came to such loggerheads over what to do, he sent him away, as is the want of every President... --~ TerryK Talk2Me! 18:39, 22 March 2007 (EDT)
It's the way the article presents the quote in the two sections that I was referring to as inconsistent. If you prefer not to clarify it so that mush-heads like me can make sense of it, fine.--Conservateur 18:52, 22 March 2007 (EDT)
  • LOL..that isn't it, I am in a meeting at present, and following some other ruckus about evolution and your namesake here, Conservative. I will read the text in a bit, ok? BTW, I am a mushroom, pretty much most of the time....kept in the dark, and every now and then someone shovels more manure on me. ;-) --~ TerryK Talk2Me! 18:57, 22 March 2007 (EDT)

Compliments

Notwithstanding the absence of a New Deal section, this is the best Conservapedia page I have ever seen. Well done!--User:Amyz 11:09, April 4, 2007 (CDT)


Causes

I glanced at the article (that's one step less vigorous than skimming it), but I didn't see anything about what caused it. Only some speculation or partisan point-scoring.

Was it in any way related to global trade, or any kind of shutdown of trade imposed by a government or governments? I ask, because things like protectionism (on the national level) or anti-globalism (worldwide) seem to be going in the same direction. Even the "carbon footprint" people advocate buying locally, avoiding rapid longdistance travel, etc. - all things which apparently would hurt the economy. --Ed Poor Talk 21:30, 7 July 2007 (EDT)

  • the most severe and protracted economic crisis in American history. To this day, there exists no general agreement about its causes, although there tends to be some consensus regarding its consequences.
  • the demise of the gold standard in international trade and demands that Germany make reparations payments in gold created a net gold flow into the United States that led to a veritable explosion of credit. Extremely unstable credit arrangements thereby emerged in the twenties, and once the crash came, the collapse of the banking system was quick to follow. Thus excessive credit and speculation, coupled with a weak banking network, caused the Great Depression.
  • Such critics as John Kenneth Galbraith held that "cause and effect run from the economy to the stock market, never the reverse. Had the economy been fundamentally sound in 1929 the effect of the great stock market crash might have been small . . . the shock to confidence and the loss of spending by those who were caught in the market might soon have worn off."
  • At the same time that agricultural economies were losing revenue because of poor harvests and declining world demand, the developed economies were contracting credit for the developing nations and imposing massive trade restrictions such as America's Hawley-Smoot Tariff of 1930. As the agricultural nations went into a slump, the industrialized countries (most notably the United States) lost a major market for their output. Hence, the downturn of 1929 became more and more severe.
  • Schumpeter held that the interwar period was an era in which three major cycles of economic activity in the United States (and Europe) coincidentally reached their nadir. These cycles were 1) the Kondratieff, a wave of fifty or more years associated with the introduction and dispersion of major inventions; 2) the Juglar, a wave of approximately ten years' duration that appeared to be linked with population movements; and 3) the Kitchin, a wave of about forty months' length that had the appearance of a typical inventory cycle.
  • In the first year after the war, gross national product fell less than the postwar reduction in government spending; unemployment did not even reach 4 percent; consumer spending did not fall at all, and eventually rose dramatically. Although recessions occurred between 1945 and the mid 1970s, most of them lasted only about a year or less, and none of them remotely approached the severity of the Great Depression. [2]

What can we make of these ideas? --Ed Poor Talk 21:53, 7 July 2007 (EDT)

Good questions. The view today is very different from the prevailing view in the 1930s. During the 30s, people often speculated about the "causes of the crash," and the "crisis in capitalism," etc. To speculate now that a decade and a half to two decade long slump, was caused by events in a prior decade (the 1920s) is a false trail; the extended slump after the great crash (29-32) was caused by government directed recovery efforts, that is the view of most economists today, with the exception of a few Marxists who for the most part will readily admit up front they don't know what they are talking about. RobS 13:04, 9 July 2007 (EDT)

I remember learning from my father that one of the main causes, at least of the stock market crash, was that large amounts of stock could be purchased on margin for small amounts of actual cash. In other words large sections of the value in the market were funds that didn't even exist in reality, and when the market hit a hard crash, people were completely wiped out. Perhaps someone with more knowledge could expand upon market rules of the day and changes that have been incorporated into our modern market to prevent a repeat. Learn together 14:09, 9 July 2007 (EDT)

Yes, that was a cause of the '29 drop, but not of the Great Depression that continued for nearly 14 years til it bottomed out in 1943. Economists today cite the "relief efforts" as the cause of extending the slump. IOW, the solution brought on a worse problem than the great crash. RobS 14:17, 9 July 2007 (EDT)
You are both right, I figure. Perhaps we should distinguish more clearly between the crash and the ensuing depression. Unless there's a consensus that the crash caused the depression, then we should unlink them. Can someone help me write Stock market crash of 1929 please?
IMHO, I think we need to clearly articulate The Crash did not cause The Depression, delink the two , and bring in some background material as to why the Federal Reserve Board was created, and why later on the Gold Standard was abandoned. This will all serve to discuss U.S. domestic aspects of The Depression. For the international economic crisis, we can put off momentarilly discussing fixed vs floating exchange rates, etc. RobS 15:56, 9 July 2007 (EDT)
You seem to understand the economics of it better than I do, Rob. I'd be happy to follow your lead on this. We need articles on:
I see that we have stubs for 2 out of 6, but the rest are red links today. We got our work cut out for us. --Ed Poor Talk 10:41, 10 July 2007 (EDT)
Ok, but I'm in the contest, so I'll be busy for a few days, but I may be able to do something with this in the last few days of the contest. Also, I'm rereading some of Milton Friedman's stuff (Free to Choose) right now, which will make an excellant source. RobS 11:45, 10 July 2007 (EDT)

Capitalism and socialism

Cut from intro:

Socialists tend to call it a failure of the free market system, while advocates of free markets blame the depression on government efforts to transform the U.S. economy into Socialism.

Which socialists? Please name them and quote them. What reasons do the socialists give for their critique? If none, say so.

And is it Capitalism itself, or the particular American variant in place at the time which they criticized?

Who in the government tried to turn the US economy socialist then? What measures did they try? Which worked, and which failed? --Ed Poor Talk 09:04, 12 November 2008 (EST)

So, what caused it?

First of all, I can't believe I've been volunteering here for six years!

Secondly, we need to put to rest the myth that the Great Depression was caused by the Stock Market Crash of 1929. A year after the crash, unemployment was less than it is now. It didn't reach double digits until the socialists in power intervened.

  • Despite the myth that it was the stock market crash of 1929 that caused the double-digit unemployment of the 1930s, unemployment never reached double digits in any of the 12 months that followed the 1929 stock market crash.

Unemployment peaked at 9 percent in December 1929 and was back down to 6.3 percent by June 1930, when the first major federal intervention took place under Hoover. The unemployment decline then reversed, rising to hit double digits six months later. As Hoover and then FDR continued to intervene, double-digit unemployment persisted throughout the remainder of the 1930s. [3]

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