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→Milton Friedman: The Fed failed to stop bank failures
In historical terms, the "lessons" of the Great Depression have been applied to preventive measures, and in the [[Financial Crisis of 2008]], helped determine what remedies to apply.
In historical terms, the "lessons" of the Great Depression have been applied to preventive measures, and in the [[Financial Crisis of 2008]], helped determine what remedies to apply.
===Milton Friedman===
===Milton Friedman===
Friedman argues that the depression began as a normal cyclical downturn, but was made much worse when the money supply fell by a third, caused primarily by banking failures in the U.S. The Federal Reserve did not cause the depression, in Friedman's view, but failed to stop those bank failures when it could and should have done so in 1931-33. In Friedman's view, the Federal Reserve failed to do precisely what it was created to do, prevent a contraction in the money supply (monetary deflation) and prevent so many bank failures. Economist [[Ben Bernanke]] adopted the Friedman view, and when the [[Financial Crisis of 2008]] hit, Bernanke, as Chairman of the Federal Reserve, made it a central goal to save the major banks using a trillion dollars in cash and credit from the Fed and from the $700 billion bailout of October 2008 that Congress approved after President [[George W. Bush]] made an urgent appeal.
Friedman argues that the depression began as a normal cyclical downturn, but was made much worse when the money supply fell by a third, caused primarily by banking failures in the U.S. The Federal Reserve did not cause the depression, in Friedman's view, but failed to stop those [[bank failure]]s when it could and should have done so in 1931-33. In Friedman's view, the Federal Reserve failed to do precisely what it was created to do, prevent a contraction in the money supply (monetary deflation) and prevent so many bank failures. Economist [[Ben Bernanke]] adopted the Friedman view, and when the [[Financial Crisis of 2008]] hit, Bernanke, as Chairman of the Federal Reserve, made it a central goal to save the major banks using a trillion dollars in cash and credit from the Fed and from the $700 billion bailout of October 2008 that Congress approved after President [[George W. Bush]] made an urgent appeal.
===Austrian School===
===Austrian School===