Lesson 3 – What Really Caused the Great Depression?

and Smoot-Hawley did not cause the great depression either.

What Caused The Great Depression

Acceptance of the Austrian explanation of what primarily caused the Great Depression is compatible with either acceptance or denial of the Monetarist explanation. Austrian economist , who wrote (1963), rejected the Monetarist explanation. He criticized Milton Friedman's assertion that the central bank failed to sufficiently increase the supply of money, claiming instead that the Federal Reserve did pursue an inflationary policy when, in 1932, it purchased $1.1 billion of government securities, which raised its total holding to $1.8 billion. Rothbard says that despite the central bank's policies, "total bank reserves only rose by $212 million, while the total money supply fell by $3 billion". The reason for this, he argues, is that the American populace lost faith in the banking system and began hoarding more cash, a factor very much beyond the control of the Central Bank. The potential for a run on the banks caused local bankers to be more conservative in lending out their reserves, which, according to Rothbard's argument, was the cause of the Federal Reserve's inability to inflate.

Causes of Great Depression

What Caused the Great Depression? | Investopedia

The cause of the great depression is easy to understand. There seems to be too many economists and experts bringing all kinds of theories and mystery to the great depression. There does not need to be. The purposes of this post is to explain simply, in layman terms to non-economists who do not sit in an ivory tower all day, what caused the great depression in the USA.

Economics Essays: Causes of Great Depression

But back to the Great Depression. Okay, "Obama Compares Housing Crisis to Great Depression," that is the headline for Reuters. "Obama Compares Housing Crisis to Great Depression." I'm wondering how many of you know what caused the Great Depression and what ended it, and after it started, what it was that exacerbated it. Now, I was trying to figure out last night -- you gotta remember here, I am steaming when I left here yesterday, you can ask Snerdley, I walked outta here, you know, we go out, get in the cars, usually tell each other, "Good show." I didn't say a word. I got in the car and sped off. Snerdley stayed here to play with the new computer. I got home, I was stewing. I take it very poorly when I do what I think is a subpar broadcast, and yesterday was, in terms of mood. Content may have been okay, but anybody can show up on the radio and be mad. That doesn't take much. My mood is better today. Can't you tell? Of course my mood is better today. So I got to thinking, what in the world could Barack Obama have been taught about the Great Depression if he compares today's economy and the housing crisis to it?

Did Capitalism Cause the Great Depression? | Mises Institute


The lasted from 1929-1939. What caused the Great Depression, the worst economic depression in the history of the United States? The truth is that is not possible to point to just one factor. Instead a combination of domestic and worldwide conditions led to the Great Depression. The effects of the Great Depression were detrimental across the world. Not only did it lead to the in America but more significantly, it was a direct cause of the rise of extremism in Germany leading to .A five-year bull market peaked on . On Thursday, October 24, a record 12.9 million shares were traded, reflecting panic selling. On Monday, October 28, 1929, panicked investors continued to try to sell stocks; the Dow saw a record loss of 13 percent. On Tuesday, October 29, 1929, 16.4 million shares were traded, shattering Thursday's record; the Dow lost another 12 percent.

Total losses for the four days: $30 billion, 10 times and more than the $32 billion the U.S. had spent in World War I. The crash wiped out 40 percent of the paper value of . Although this was a cataclysmic blow, most scholars do not believe that the stock market crash, alone, was sufficient to have caused the Great Depression. Economists and historians are still debating the causes of the Great Depression. While we know what happened, we have only theories to explain the reason for the economic collapse. This overview will arm you with knowledge of the political events that may have helped cause the Great Depression.But back to the Great Depression. Okay, "Obama Compares Housing Crisis to Great Depression," that is the headline for Reuters. "Obama Compares Housing Crisis to Great Depression." I'm wondering how many of you know what caused the Great Depression and what ended it, and after it started, what it was that exacerbated it. Now, I was trying to figure out last night -- you gotta remember here, I am steaming when I left here yesterday, you can ask Snerdley, I walked outta here, you know, we go out, get in the cars, usually tell each other, "Good show." I didn't say a word. I got in the car and sped off. Snerdley stayed here to play with the new computer. I got home, I was stewing. I take it very poorly when I do what I think is a subpar broadcast, and yesterday was, in terms of mood. Content may have been okay, but anybody can show up on the radio and be mad. That doesn't take much. My mood is better today. Can't you tell? Of course my mood is better today. So I got to thinking, what in the world could Barack Obama have been taught about the Great Depression if he compares today's economy and the housing crisis to it? The 1913 Underwood-Simmons Tariff was an experiment with lowered tariffs. In 1921, Congress ended that experiment with the Emergency Tariff Act. In 1922, the Fordney-McCumber Tariff Act raised tariffs above 1913 levels. It also authorized the president to adjust % to balance foreign and domestic production costs, a move to help America's farmers.

In 1928, Hoover ran on a platform of higher tariffs designed to protect farmers from European competition. Congress passed the ; Hoover signed the bill although economists protested. It is unlikely that tariffs alone caused the Great Depression, but they fostered ; declined by 66% from 1929 to 1934. Although economists have pontificated over the decades about this or that cause of the Great Depression, even the current Fed chairman Ben S. Bernanke, agrees with Friedman’s assessment that the Fed caused the Great Depression.Despite the varied theories espoused by many establishment economists, it was none other than the Federal Reserve that caused the Great Depression and the horrific suffering, deprivation and dislocation America and the world experienced in its wake. At least, that’s the clearly stated view of current Fed Chairman Ben Bernanke.The lasted from 1929-1939. What caused the Great Depression, the worst economic depression in the history of the United States? The truth is that is not possible to point to just one factor. Instead a combination of domestic and worldwide conditions led to the Great Depression. The effects of the Great Depression were detrimental across the world. Not only did it lead to the in America but more significantly, it was a direct cause of the rise of extremism in Germany leading to .