The Causes of the Great Depression - Page 3 - Political Forum

Truth-Bringer · 05-05-2008, 10:43 AM

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Originally Posted by Kazikli Bey

The Treaty of Versailles is another as well

This definitely played a big role in the German economy. The politicians there inflated the currency in an attempt to get out of the imposed burdens, and virtually destroyed their economy.

iTaliAN_ICe · 05-05-2008, 05:14 PM

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Originally Posted by Truth-Bringer

Well that's just pure speculation.

As is your entire argument. You consistently claim that a "truly free market" would have ended the depression, but you have absolutely no proof to back this statement up. A successful "truly free market" has never existed. Your argument is based on a giant assumption...

Truth-Bringer · 05-06-2008, 10:28 AM

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Originally Posted by iTaliAN_ICe

As is your entire argument. You consistently claim that a "truly free market" would have ended the depression,

My claim is that a very un-free market caused the Great Depression.

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but you have absolutely no proof to back this statement up. A successful "truly free market" has never existed. Your argument is based on a giant assumption...

My argument is that the government and the New Deal caused and prolonged the Great Depression.

iTaliAN_ICe · 05-06-2008, 05:14 PM

Quote:

Originally Posted by Truth-Bringer

My claim is that a very un-free market caused the Great Depression.

My argument is that the government and the New Deal caused and prolonged the Great Depression.

And mine is that you lack the evidence to back up either of these statements.

Truth-Bringer · 05-06-2008, 06:29 PM

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Originally Posted by iTaliAN_ICe

And mine is that you lack the evidence to back up either of these statements.

The evidence has been presented. You haven't refuted it.

Kazikli Bey · 05-06-2008, 07:57 PM

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Originally Posted by Truth-Bringer

My claim is that a very un-free market caused the Great Depression.

How so? In America, the economic policy was Laissez Faire when the stock market crashed in 1929, not that people were not already losing their jobs before hand as the Depression built up and gained momentum. It was the very fact that NO government was buying raw materials and hiring labor to build ships, etc that the prices of all these things dropped dramatically. In fact, the only country this didn't happen in was Germany because they had war reparations to pay and so they saw rapid inflation.

Quote:

Originally Posted by Truth-Bringer

My argument is that the government and the New Deal caused and prolonged the Great Depression.

I just got up this morning and it starts with a stupid comment like this???

As i have stated before, Laissez Faire economic policies is what caused the Great Depression, not the New Deal which wasn't even in place yet, and wouldn't be until 1933 when, when it was implemented, saw a reversal of the Great Depression, coincidence?

If you look through history, the only countries that defeated the Great Depression were countries where the Government took control of economy, built infrastructure and so on. In fact, i do believe that there were only three countries that faired better then the rest, they were:
Germany under Hitler
America under Roosevelt
USSR under Stalin
and guess what, they all have something in common... their governments took control of their economies.

Truth-Bringer · 05-07-2008, 10:16 AM

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Originally Posted by Kazikli Bey

How so?

I've already explained it.

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As i have stated before, Laissez Faire economic policies is what caused the Great Depression,

And that has been refuted. There was no "Laissez Faire" economy in 1929. Two planks of the Communist Manifesto were fully implemented in this country, along with a whole host of other government regulations.

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not the New Deal which wasn't even in place yet, and wouldn't be until 1933 when, when it was implemented, saw a reversal of the Great Depression, coincidence?

This has already been refuted as well. Are you guys even reading the posts?

Kazikli Bey · 05-08-2008, 08:58 AM

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Originally Posted by Truth-Bringer

A lot of people still claim that it was the free market or unregulated capitalism that caused the Great Depression. Nothing could be further from the truth. It was government intervention in the market that set the stage for the Great Depression and made it much worse than it would have been otherwise. Here's a brief list of some of the government intervention and regulation in the economy prior to 1929:

The first labor unions, then called federations were active in 1820. National labor union - 1866. American Federation of Labor - 1886. Dept. of Labor, 1913. Dept. of the Interior 1849. Dept. of Agriculture - 1862. Anti-Trust Acts 1902. Dept. of Commerce 1903. Shift from private to state-funded education began in the 1800's. Interstate Commerce Act of 1887. Federal Highway Act of 1916. Air Commerce Act of 1926. The Income Tax and Federal Reserve Act- 1913 (the graduated income tax and centralized bank are both planks of The Communist Manifesto). Also had the estate tax act in 1916. Corporate Tax Act of 1909. Zoning laws and regulations, which the Supreme Court ruled constitutional in 1921. And we had federal ownership of land throughout the history of our country. Contrary to what some might say, this constitutes a heavily regulated and un-free market. This is anything BUT unregulated capitalism.

The Great Depression was caused by government influence in the economy, not unregulated capitalism. Primarily, the Smoot-Hawley Tariff Act - which even a liberal like Al Gore admits was a major factor, the increase of the income tax (the top rate went from 25% to 63%), and the manipulation of credit, specifically the shrinking of the money supply, through the government central bank, the Federal Reserve:

What Caused the Great Depression of the 1930's

"And, of course, there was the political regime of Franklin D. Roosevelt. To finance government expenditures to pay for his beloved New Deal welfare programs, Roosevelt and his cohorts began printing massive amounts of government notes. To ensure that gold would not expose what they were doing, legal-tender laws were enacted. But that wasn't the worst of it. The Roosevelt people next canceled — nullified — extinguished — every single gold clause in every single contract, public and private.

And even that wasn't the worst of it. Roosevelt and his cronies nationalized — confiscated — the gold coins of the American people and then made it illegal for Americans to own gold. Imagine — after 150 years of the strongest monetary system in history — a system free from government assault — a system that was a bulwark for American liberty — the American people became subject to serving time in a U.S. federal penitentiary for owning a gold coin!

What about the Constitution? What about enumerated powers? Unfortunately, Roosevelt had sufficient cronies on the Court to sustain his policies, especially after his infamous and shameful court-packing scheme."

Link

This is all nonsense, it is purely based upon internal markets which were not the only cause of the Great Depression, the major cause of the Great Depression was Globalisation, not internal markets within a state. After WWI, the problems of the Great Depression arose because of declining trade between countries, which led to lower prices, which led to people being laid off jobs. Lower prices meant that companies were not making enough profit even though production rates stayed relatively high, in fact, some companies thought it cheaper to destroyed produce rather then sell it which, even though stopped prices falling drastically lower, meant that the unemployed could and did go hungry.

AzTeK · 05-08-2008, 09:03 AM

This is also a very interesting article about the causes and prolongation of the great depression. The Great Depression According to Milton Friedman| The Foundation for Economic Education: The Freeman, Ideas on Liberty

It is without any doubt that the government and the new deal at the very least contributed to the great depression and specially its prolongation.

Troianii · 05-08-2008, 01:40 PM

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Originally Posted by AzTeK

According to this chart from Wiki, GDP growth clearly took off from the point the first New Deal was implemented - even with higher growth rates than before the Great Depression. So obviously, the New Deal managed to provide more economic growth than the "free" market before 1929.

Here's a chart of Germany's GDP during WW2. It is per capita, and during wartime it's hard to know what kind of effect that has on the overall GDP

but I didn't find anything better atm. Still, after Hitler took power (1933) and placed major governmental restrictions on the markets and forced governmental programs to incresae spending (mostly to prepare for war, of course, but that doesn't matte rin the end), GDP/capita also skyrocketted.

So to say that the government cannot stimulate economy is wrong, which is what Italian Ice already claimed. Since we have no data on a truly free market, we can only speculate if that system could indeed provide for sharper growth, eventhough it's obvious governmental regulations have led to recessions and depressions before.

I actually found in my research a little known fact, that Hoover implemented pretty much everything in the New Deal. A Campaigner for FDR later said that he knew the proposals were really Hoover's, but they didn't want to say that - they had turned public criticism on Hoover enough to win the election.