Depressions prior to Keynes

Miscellaneous Newbies
1

So I was reading this old article from The Economist and the author makes the claim that prior to the Great Depression, economic downturns were “deeper and longer” than they are today mainly due to a lack of Government intervention.

This isn’t the first time I’ve seen this claim being made so I wonder how Austrians would respond. Thanks in advance for any replies.

2

economic downturns were “deeper and longer” than they are today mainly due to Government intervention.

Your syntax makes it seem like the depressions were longer due to government intervention. This is not what the article says, but the opposite.

3

Oops you’re right. It should read, economic downturns before the Great Depression were “deeper and longer” than they are today mainly due to a lack of Government intervention. Sorry about that I’ll edit my original post thanks.

4

https://wiki.freecapitalists.org/wiki/Financial_crisis#History

Life with the Fed: Sunshine and Lollipops?

Here’s a ridiculous “explanation” from a mainstream? perspective.

I’ll add more as I think of them

5

As far as I know that’s not true.

6

I have several reasons for the descrepancy and you can guess the amount of each in making recessions prior to 1933 worse than after:

  1. The economy of today and back through to 1933 is vastly larger and has much more opportunity due to the size of the Division of Labor and Technology. Today 120 million private sector workers provide the bulk of wealth that powers government at all levels including the hyper-aggressive US Federal Govenrment and its insane foreign policies. There was no way that the population could have supported upwards of 40% of income on government as it does today. And from technology there are vastly more things to do where people pay other people than in previous years. In the past 10 years the US economy has created jobs like Web Designer that never existed prior to this.

  2. The current statistics are intentionally less accurate or even fradulent compared to those used in the Depression and prior. The computation of the CPI is a complete joke. The computation of the unemployment rate was changed to NOT match that of the Depression.

  3. Under the “Gold Standard” the money creators, the central banks, were not as able to create Nominal Growth as they are today. So central banks could increase the money supply to hide the lack of real growth in the economy.

My opinion is that the amounts contributed by 1 to 3 above to make Recessions less severe now than in the past are 1. 60%, 2. 10% and 3. 30%.