Molson Hart

Inspired by @Molson_Hart, I just read the wiki on the Great Depression. Key Takeaways: 1. World GDP fell 15% 1929 and 1932 (vs 1% in 2008/2009) and US annual GNP took a decade to bounce back, finally spurred to growth by easy money and wartime production https://en.wikipedia.org/wiki/Great_Depression?wprov=sfti1 …https://twitter.com/Molson_Hart/status/1241021891797811205 …

2. Unemployment peaked at 25% half way through, but was still 5 more years before GDP was back to pre-crisis levels 3. Government and business ramped up spending at the beginning but households cut by 10% 4. Interest rates cut in 1930, but fear still kept spending low

5. Tariffs implemented in 1930 exacerbated problems leading to 1/3 decrease in global trade 6. Deflation made it sensible to hold cash and stay out of the markets, decreasing money supply and extending crisis, economist consensus says fighting the deflation would have helped

7. Government employment programs were started early, but Hoover and then Roosevelt would not deficit spend until WWII 8. Fed was constrained by gold standard requirements, people didn’t trust paper money and sought gold until legally banned in 1933

9. Austrian economists believe government expansion of credit availability in the 20s was the cause, and the medicine was to let companies and banks fail that were over extended. They argue the Fed extended the crisis by propping up these struggling businesses

10. Much of the dramatic government expansion in the New Deal remains to this day outside of programs overturned by the Supreme Court (price and wage controls)