8/4/2019 LECTURE-Great Myths of the First Great Depression

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Great Myths of the FirstGreatDepression

PHASE ONE: The Boom (The Roaring Twenties)

THE MYTH: The Great Moderation!

1. The problem goes back to the war the Napoleonic War.

2. What prosperity looks likethe nineteenth-century version3. What Hoover and FDR learned in their war

4. What Churchill and Strong learned after theirs.

PHASE TWO: The Crash (1929-1932)

THE MYTH: Herbert Hoover was a laissez-faire liquidationist THE MYTH: The Fed were dithering do-nothingsTHE MYTH: The Problem was Overproduction and Underconsumption

Hoovers four-step programme for success:

1. Follow the New Economics and prop up wages

2. Cripple international trade3. Tax more, and spend even more

4. New Deal-lite

PHASE THREE: Dr New Deal (1932 to 1936)

THE MYTH: Franklin Roosevelts New Deal saved America from the failure offree- market capitalism.

THE MYTH: Government programmes helped lower unemployment by puttingmany Americans to work

Dr New Deals Prescription for success:

1. Follow Mussolini and prop up big corporations

2. The National Run Around & the Alphabet Agencies3. Tax even more, and spend even more4. New Deal in full!

PHASE FOUR: The Depression within a Depression (1937 to 1938)

THE MYTH: Michael Joseph Savage helped lower unemployment by puttingmany NZers to work

THE MYTH: Thank God for FDR and Mickey Savage!

Dr New Deals Prescription to really kill off the patient:1. The Wagner Act and the Alphabet Agencies

8/4/2019 LECTURE-Great Myths of the First Great Depression

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2. The Supreme Court and the Court Packing Saga: and then the only rabbit left wasspending

3. Regime Uncertainty4. Green shoots?

PHASE FIVE: Dr Win the War (1940 to 1945)THE MYTH: It was the war what saved us!THE MYTH: the economy was producing more guns and more butter

Americans never had it so good.

1. 22 percent of US workforce, 12 million men, in the military--most of them risking death2. Plenty of guns, no butter.3. Forced savings

PHASE SIX: A Miracle at Last! (1946 to 1949)

The real miraclethe one that needs explaining--was not to take twelve million from

the unemployment rolls and call thatprosperity, it was putting to work the ten million

who came home in 1946, and out of that producing prosperity.

- Robert Higgs

READINGS:

Great Myths of the Great Depression, by Larry Reedonline at www.mackinac.org/4013

James Mill on the Overconsumption and Underproduction Fallacies, intr.by George Reisman, online at www.capitalism.net/Jamesmil.pdf

Herbert Hoovers Depression, by Murray Rothbardonline at www.lewrockwell.com/rothbard/rothbard184.html

The Dangerous Return to Keynesian Economics, by Steven Katesonline (with footnotes) atwww.quadrant.org.au/blogs/qed/2009/02/the-dangerous-return-to-keynesian-economics

Regime Uncertainty: Why the Great Depression Lasted So Long, and whyProsperity Resumed after the War, by Robert Higgsonline at www.independent.org/pdf/tir/tir_01_4_higgs.pdf

Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s,by Robert Higgsonline at www.independent.org/newsroom/article.asp?id=138

Keynes & Space Aliens, by Clifford Theisonline at www.mises.org/daily/5559/Keynes-and-Space-Aliens

http://www.mackinac.org/4013http://www.capitalism.net/Jamesmil.pdfhttp://www.lewrockwell.com/rothbard/rothbard184.htmlhttp://www.quadrant.org.au/blogs/qed/2009/02/the-dangerous-return-to-keynesian-economicshttp://www.quadrant.org.au/blogs/qed/2009/02/the-dangerous-return-to-keynesian-economicshttp://www.independent.org/pdf/tir/tir_01_4_higgs.pdfhttp://www.independent.org/newsroom/article.asp?id=138http://www.mises.org/daily/5559/Keynes-and-Space-Alienshttp://www.mises.org/daily/5559/Keynes-and-Space-Alienshttp://www.capitalism.net/Jamesmil.pdfhttp://www.lewrockwell.com/rothbard/rothbard184.htmlhttp://www.quadrant.org.au/blogs/qed/2009/02/the-dangerous-return-to-keynesian-economicshttp://www.quadrant.org.au/blogs/qed/2009/02/the-dangerous-return-to-keynesian-economicshttp://www.independent.org/pdf/tir/tir_01_4_higgs.pdfhttp://www.independent.org/newsroom/article.asp?id=138http://www.mises.org/daily/5559/Keynes-and-Space-Alienshttp://www.mackinac.org/4013