Posted by
Always To The Right on Friday, November 28, 2008 11:59:06 PM
Early in what became the Great Depression, John Maynard Keynes was
asked if anything similar had ever happened. "Yes," he replied,...
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It did take 25 years, until November 1954, for the Dow to return to
the peak it reached in September 1929. So caution is sensible
concerning calls for a new New Deal. The assumption is that the New
Deal vanquished the Depression.
Intelligent, informed people differ about why the Depression lasted
so long. But people whose recipe for recovery today is another New Deal
should remember that America's biggest industrial collapse occurred in
1937, eight years after the 1929 stock market crash and nearly five
years into the New Deal.
In 1939, after a decade of frantic federal spending — President
Herbert Hoover increased it more than 50% between 1929 and the
inauguration of Franklin Roosevelt — unemployment was 17.2%.
"I say after eight years of this administration we have just as much
unemployment as when we started," lamented Henry Morgenthau, FDR's
Treasury secretary. Unemployment declined when America began selling
materials to nations engaged in a war America would soon join.