Congressional Issues 2010
ECONOMY
The Great Depression

• Reject the economic policies that created the Great Depression
• Reject the economic policies that needlessly prolonged the Great Depression
• Reject the bailout of mismanaged investment companies which will repeat the Great Depression

Speaking at Milton Friedman's 90th birthday party, Federal Reserve Chairman Ben Bernanke admitted that the government caused the Great Depression:

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.

This is not an apology. This is arrogance. The federal government and Federal Reserve are doing exactly the same things that brought about and prolonged the Great Depression.

What are those policies?

While Milton and Ben are taking credit for explaining why the Great Depression occurred, there was one economist who predicted it in advance.

The Prophet of the Great Depression

Ludwig von Mises predicted both the destruction of the German Mark and the market crash of 1929. The two events are related by the act of government inflation. When the government inflates the money supply, it distorts the price signals of "the Invisible Hand" of the Free Market. Investors use the money created by the government to invest in projects that the Free Market had rejected. Either the government continues to support this malinvestment with repeated inflation of the money supply (Germany), or it contracts the money supply and causes all those bad investments to collapse (America's Great Depression).

The way to avoid another depression is simple: stop the government printing presses. Stop government bailouts of bad investments. Let profit and loss perform its magic.

America's Founding Fathers called America "an Experiment in Liberty."

The "experiment" succeeded. America became the most prosperous and admired nation in history.

A century later, America tried a different experiment: an experiment in government "central planning."

That experiment failed. Repeated around the world in the 20th century, has brought poverty, misery, and death.  America is no longer prosperous and admired, but bankrupt and despised.

 

While the Free Market allows individuals and individual businesses to fail, and puts the resources they weren't using well into the hands of those who will do a better job, government central planning causes the entire economy to fail.

• Bibliography on the Great Depression by David Gordon
• The Great Depression | Foundation for Economic Education

• Contents - America's Great Depression, by Murray N. Rothbard
  • In the Introduction to this book, esteemed historian Paul Johnson writes:
    The Wall Street collapse of September-October 1929 and the Great Depression which followed it were among the most important events of the 20th century.
    • They made the Second World War possible, though not inevitable, and
    • by undermining confidence in the efficacy of the market and the capitalist system, they helped to explain why the absurdly inefficient and murderous system of Soviet communism survived for so long.
    Indeed it could be argued that the ultimate emotional and intellectual consequences of the Great Depression were not finally erased from the mind of humanity until the end of 1980s, when the Soviet collectivist alternative to capitalism crumbled in hopeless ruin and the entire world accepted there was no substitute for the [free] market. 
• The Creation of the Second Great Depression by Ron Paul
• Did Capitalism Cause the Great Depression? by Murray N. Rothbard
• On Power: The Independent Institute | U. S. History | Great Depression
  • Introduction
  • Causes of the Great Depression
  • Economics of World War II
  • General
  • Growth of Government
  • Neutrality and “Isolationism”
• The New Deal Debunked (again) - Thomas J. DiLorenzo - Mises Institute
• Worse Than the Great Depression
• How to Avoid Another Depression by Mark Thornton
• Herbert Hoover's Depression by Murray N. Rothbard
• Recession or Depression? by Llewellyn H. Rockwell, Jr.
• America’s Greatest Depression Fighter by Jim Powell
• Great Depression Myths Revisited [Mackinac Center for Public Policy]
• FSK's Guide to Reality: The Federal Reserve Caused the Great Depression

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