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The Federal Reserve absolutely did not cause the Great Depression. Economic crashes occurred at least once a decade since beginning of American history, and as
by Aunche 4y ago
The Federal Reserve absolutely did not cause the Great Depression. Economic crashes occurred at least once a decade since beginning of American history, and as the economy grew more more interconnected and less self sufficient, economic crashes tended to be worse than the last, culminating with the Great Depression. Economists overwhelmingly agree that the Fed's biggest blunder during the Great Depression was not going far enough. It was only with what I'm sure you would call "money printing" enabled by the Fed to finance WWII, that the economy truly recovered.
- 988747 4y agoSmall-scale economic downturns did happen once a decade, because that's natural in a healthy economy. Federal Reserve tried to prevent a downturn in 1929, but their misguided monetary policies made it two orders of magnitude worse instead. Milton Friedman once wrote a great analysis on this: https://fee.org/articles/the-great-depression-according-to-milton-friedman/ https://fee.org/articles/the-great-depression-according-to-m...
- MR4D 4y agoI highly recommend ready “The Panic of 1907”. After that, I think you might come to a different conclusion. Even if you don’t change your mind, it’s still a great read for those fascinated with panics and depressions.
- choxi 4y agoDo you mean this? https://www.federalreservehistory.org/essays/panic-of-1907 https://www.federalreservehistory.org/essays/panic-of-1907 Because that name is also used to describe the event, wasn’t sure if you meant a specific book or article.
- MR4D 4y agoSorry, I should have included the link - I meant the book: https://www.amazon.com/Panic-1907-Lessons-Learned-Markets/dp/047015263X https://www.amazon.com/Panic-1907-Lessons-Learned-Markets/dp...
- lend000 4y agoMost people can't name any specific recession prior to the creation of the Federal Reserve, but everyone has heard of the Great Depression. A sibling commenter posted some good analyses, but the gist of it is that they tried tightening the money supply at the worst possible time (something the modern Fed avoids at all cost, at the expense of increasing wealth inequality by artificially inflating the value of assets whenever they start to dip).