Реферат: Facts Of The Great Depression Essay Research

War II cured the Great Depression.

After the success of Keyne?s economic beliefs were proven, almost all free

governments around the world became Keynesian. These policies have dramatically

reduced the severity of recessions since then, and appear to have completely eliminated

the depression from those who follow such economic beliefs throughout the world.

Events of the 1920s

The Roaring Twenties were an era dominated by Republican presidents: Warren

Harding (1920-1923), Calvin Coolidge (1923-1929) and Herbert Hoover (1929-1933).

Under their conservative economic philosophy of laissez-faire (”leave it alone”), markets

were allowed to operate without government interference. Taxes and regulation were

slashed dramatically, monopolies were allowed to form, and inequality of wealth and

income reached record levels. The country was on the preferred gold standard, and the

Federal Reserve was not allowed to significantly change the money supply. Many try to

blame the worsening of the Depression on Hoover, for supposedly betraying the

laissez-faire beliefs.

As this time line will show, almost all of Hoover’s government action occurred

during his last year in office, long after the worst of the Depression had hit. In fact, he

was voted out of office for doing “too little too late.” The only notable exception to his

earlier idleness was the Smoot-Hawley tariff of 1930.

But much more important, the economy was clearly turning downward even

before Hoover took office in 1929. Entire sectors of the economy were depressed

throughout the decade, such as: agriculture, energy and mining. Even the two industries

with the most spectacular growth – construction and automobile manufacturing – were

contracting in the year before the stock market crash of 1929. About 600 banks a year

were failing. Half the American people lived at or below the minimum subsistence level.

By the time the stock market crashed, there was a excessive amount of goods on the

market, and inventories were three times their normal size. The fact that all this occurred

even before the first act of government intervention is a major refutation of laissez-faire

ideology.