A student points me to Ron Paul on the 1920-21 depression.
In 1921 we had a severe depression; it was over in one year. A little bit later in the 30s we had another one but then the government decided to do all these things, bail everybody out. Exactly what we’re doing now and it prolonged the correction.
The implication is that in 1921 the government didn’t “do all these things”. But of course the government did adopt policies to restrict trade and immigration.
Interestingly, two of the first Hoover administration responses in 1930 were to restrict trade and immigration.
I think the lesson one would draw here is that policymakers, seeing that restricting trade and immigration went along with a swift end to the 1921 recession, tried them again in 1930. But they didn’t work. I don’t see any reason to conclude that the government opted not to intervene in 1921 and to intervene in 1930.
13 comments
February 24, 2009 at 11:04 am
Matt Lister
I don’t know about trade, but I expect that Paul would be quite happy if we moved to restrict immigration again! (In fact, there are a few immigration restrictions in some of the bills, limiting the ability of banks getting bailout money and the like to hire H-1B immigrants. I’m not very keen on that, but it’s not the worst thing that could be done.)
February 24, 2009 at 11:34 am
Michael Bérubé
I don’t see any reason to conclude that the government opted not to intervene in 1921 and to intervene in 1930.
It’s not just that the government opted to intervene; it’s that the government opted to intervene by doing all these things like building the NAFTA superhighway on secret orders from the Council on Foreign Relations in order to undermine the gold standard.
February 24, 2009 at 11:35 am
davenoon
Should we just go ahead and declare Ron Paul as EotAW’s official historian?
February 24, 2009 at 11:40 am
ari
Ron Paul, Eric? Ron Paul!?! Like we didn’t have enough trouble already.
February 24, 2009 at 11:46 am
Russell Belding
Say what you like about Ron Paul, he’s a very entertaining cross-dresser.
February 24, 2009 at 11:49 am
eric
Ron Paul, Eric? Ron Paul!?!
I just do what the students ask me.
February 24, 2009 at 12:09 pm
Chris
In 1921 we had a severe depression; it was over in one year.
This sentence seems self-contradictory to me. Isn’t the duration of a depression one of the measures of its severity? ISTM that a large but short-lived reduction in economic output (or employment, or whatever other metric you want to use) should be called something else, because confusing it with a depression is, well, confusing.
February 24, 2009 at 12:16 pm
Jason B.
I always go to gynecologists for economic history. Don’t you?
February 24, 2009 at 4:11 pm
drip
I always go to gynecologists for economic history. Don’t you? Beats a congressman from Texas every time.
February 25, 2009 at 10:40 am
jazzbumpa
If GDP growth is any indication, the ’21 recession was pretty mild. It was only slightly negative in ’20 and ’21, rebounding sharply in’22.
Total Govt. spending in’21 was considerably higher than any other year in the decade, and higher than in either ’32 or ’33.
Spending in ’34 and ’35 was only slightly higher than in ’20.
http://www.lib.umich.edu/govdocs/stecgovt.html
Conservatives live in a data-free world.
February 25, 2009 at 10:42 am
jazzbumpa
Ahh. Once again I succeed in posting a non-active link.
(hangs head, shuffles of to do the vacuuming . . .)
February 25, 2009 at 12:54 pm
Vance
Restored, I think.
February 25, 2009 at 1:12 pm
jazzbumpa
Wow. That must have been divine intervention, or something. Thanx!