Top Three Myths about the Great Depression and the New Deal

Students: Hear Steve Davies live at the Scholarship and a Free Society http://lrnlbty.co/wz3Ao9 or The Challenges and Future of Liberty Seminars http://lrnlbty.co/zvFZfS this summer

Historian Stephen Davies names three persistent myths about the Great Depression. Myth #1: Herbert Hoover was a laissez-faire president, and it was his lack of action that lead to an economic collapse. Davies argues that in fact, Hoover was a very interventionist president, and it was his intervening in the economy that made matters worse. Myth #2: The New Deal ended the Great Depression. Davies argues that the New Deal actually made matters worse. In other countries, the Great Depression ended much sooner and more quickly than it did in the United States. Myth #3: World War II ended the Great Depression. Davies explains that military production is not real wealth.; wars destroy wealth, they do not create wealth. In fact, examination of the historical data reveals that the U.S. economy did not really start to recover until after WWII was over.

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[XxzeppelinxX]

@canaryman69 Right on man. And kids these days just go out shouting about, along with their mentor professors, Free markets suck and created all these problems. Yet, they never actually seen a free market, nor have they studied one like Hong Kong in the 1970s.

[halloranedward]

@XxzeppelinxX The public schools have been working over time to blur the definitions of these terms to the point that every single complaint about capitalism by the occupiers is an example of socialism,(bailouts subsidies, tax incentives, etc.) not one of them can tell you what the words "socialism" or "capitalism"mean, if you really want some fun, ask them what the name of the economic system where the government sets prices, but property may be owned. it's hilarious.

[jonescomplete]

@sleeknub There already was research, there just wasn’t a market for it (who wants a Sherman main battle tank or an armored personal carrier with a 30 Cal mounted on top... aside from me of course)

[sparta1236]

@trueconservative22 I would agree with you that spending cuts helped spur economic growth, it was also in 1946 America saw resurgence of the private sector which in turn further economic growth.

[sleeknub]

....okay....war brings research then....which, in turn, brings technology. We have seen this happen in the past.

[trueconservatie33]

@sparta1236 I think what ended the depression was the spending cuts and birth of tax shelters so no one actually paid those high rates. and the destruction of European and japan economy after the war.

[sparta1236]

@visini14 the recession in 1937 was actually caused by the Supreme Courts favorable opinion on the National Labor Relations Act of 1935- wages shot up by 13%, but this did not coincide with an increase in productivity or output prices, Unemployment only fell due to WW2 not the new deal. And he's right when he says that WW2 didnot get us out of the GD.

[sparta1236]

@visini14 The New Deal did nothing to help, in fact it was only extrapolations of Herbert Hoovers policies- the GD was made worse due to Hoovers intervening and The Fed, the New Deal did not lower unemployment, unemploymeny hung around 18% leading up to WW2, Consumption was down 19%, 30% drop in GDP and a 30% drop in real investment- b/c of the new deal.

[visini14]

@silljos1 To those people, I say, "You are wrong." The New deal brought unemployment down from 25% to just under 10% when we got into WWII, and unemployment would have kept going down. He was the person who paved the way for the 40s 50s and 60s economic prosperity. Then the 70s hit and it was the start of tearing down what he made, the USA.

[silljos1]

@visini14 I agree. However there are many that would argue that although the New Deal helped tremendously, it could not do enough because of the severity of the crisis. Don't get me wrong, I love the New Deal and the policies that FDR implemented. And of course WWII helped as well, the war turned America into the worlds largest creditor, and with our production and manufacturing intact due our advantageous geographic location, much of Europe was in ashes, completely devastated.

[visini14]

@silljos1 THe New Deal, DID end the Great Depression, but effects of the Depression was felt for a long time. The G.D. ended in 1934, when GDP was kicked back into growth. It is clear to see that the GD ended because in 1937, the US has a recession because the Supreme Court found parts of the New Deal unconstitutional, and put a lot of people out of work again, then he passed those same laws with different wording. Long story short, it did end the depression. (1929-1934)

[StephJ623]

Actually, WWII DID help bring the US out of the Depression because it freaking destroyed 2/3 of the world's production capacity, and the US was not in that 2/3!