The Myth of FDR

Posted by George Regal Categories: History, US Economy

The Great Depression was brought about as a result of monetary inflation (68%) from 1921-1928. (See: What is the Federal Reserve Doing?) There were other factors involved, but this was the primary factor. This was mostly the result of “easy credit” (a recurring theme isn’t it?). Credit expansion, as we have seen again, leads to malinvestment. John Maynard Keynes, the father of Keynesian Economics, called Federal Reserve policy (1921-1928) a triumph in currency management. Hey, good call John!  It’s amazing that Keynesian Economics is still with us.

The inflation fueled boom and resulting depression are often blamed on Herbert Hoover and his laissez-faire policies. Nothing could be further from the truth and we need to look no further than Hoover’s words from the 1932 presidential campaign.

“We might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic.”

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