# It's Economics 101! **URL:** \ **Category:** In My Humble Opinion\ **Created:** [October 12, 2016, 6:22pm UTC](https://boards.straightdope.com/t/its-economics-101/768343 "2016-10-12T18:22:38Z")\ **Posts on this page:** 7\ **Page:** 4
**Author:** ![Sage\_Rat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sage_rat/32/399_2.png) [@Sage\_Rat](https://boards.straightdope.com/u/Sage_Rat)\ **Post date:** [October 15, 2016, 11:56pm UTC](https://boards.straightdope.com/t/its-economics-101/768343/61 "2016-10-15T23:56:14Z")
> [@septimus](#): > > OP’s question was _ **So what does Economics 101 actually say?** _ > > Can you cite an actual Econ 101 course, or any professor or textbook with agrees with your peculiar view on minimum wage hikes? > > Didn’t think so. If we were looking at an economics book from the early 20th century, maybe. It’s probably been moved out of the curriculum for beginners economics, since the Econ 101 model conflicts too strongly with the real world effects of minimum wage increases, but they wouldn’t have been aware of that yet, at that time. This is basically similar to complaining that gravity causes things to double in speed for every unit of time more that they fall, and yet that feather I just dropped didn’t do that. That doesn’t make the classic model wrong, it just means that it ain’t that simple. If Econ 101 or Physics 101 had everything in it that you need to know, you wouldn’t need an Econ 102 and a Physics 102. If you’re teaching people about sticky prices and labor market flexibility before taking them through a dirt simple algebraic spherical cows model of the economy, then I would disagree with how economics is being taught. That’s not to say that it isn’t, but I wouldn’t do so. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [October 17, 2016, 4:17pm UTC](https://boards.straightdope.com/t/its-economics-101/768343/62 "2016-10-17T16:17:41Z")
> [@RickJay](#): > > The rise of the Nazis in 1933 caused the Great Depression, which began in 1929? If you look at the stock market in 1928 and 1929 it was very effected by the negotiations between England, France and Germany over repayment of WW1 debts and reparations. The Young plan which was ratified in late 1929 was opposed by the German right and their fierce opposition to the Young plan was one of the reasons the Nazis were first able to gain a foothold in German government. This ascension of radicals and the possibility of a future war led to worldwide economic slowdown. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [October 18, 2016, 3:00pm UTC](https://boards.straightdope.com/t/its-economics-101/768343/63 "2016-10-18T15:00:59Z")
> [@puddleglum](#): > > If you look at the stock market in 1928 and 1929 it was very effected by the negotiations between England, France and Germany over repayment of WW1 debts and reparations. The Young plan which was ratified in late 1929 was opposed by the German right and their fierce opposition to the Young plan was one of the reasons the Nazis were first able to gain a foothold in German government. This ascension of radicals and the possibility of a future war led to worldwide economic slowdown. That’s fine, but you said “the rise to power of the Nazis” was one of the causes of the Great Depression. Now what you’re saying is that the Young plan and subsequent economic upheaval was one of the things that led to the rise of the Nazis. Those are two dramatically different things to say - literally a reversal of cause and effect. (And the second is correct, whereas the first is not.) ---
**Author:** ![Chimera](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Chimera](https://boards.straightdope.com/u/Chimera)\ **Post date:** [October 18, 2016, 3:19pm UTC](https://boards.straightdope.com/t/its-economics-101/768343/64 "2016-10-18T15:19:12Z")
it is actually modern ‘socialist’ steps that have moderated the normal wild swings in economies. Take a look at this list; > **[List of recessions in the United States](https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States)** > > There have been as many as 48 recessions in the United States dating back to the Articles of Confederation, and although economists and historians dispute certain 19th-century recessions, the consensus view among economists and historians is that "The cyclical volatility of GDP and unemployment was greater before the Great Depression than it has been since the end of World War II." Cycles in the country's agricultural production, industrial production, consumption, business investment, and The... There’s basically a recession or ‘panic’ every 3-8 years, with huge Depressions happening every 70-80 years. Reading the history of some towns, it is crazy how they boomed during the good times and then so many of them nearly evaporated during the following panics. The stock market bubble of 1929 is what caused the Depression. Just like before it, complete boom and bust cycle burned hot until it got too hot (massively overvalued) and crashed. The USA remained in that depression until WWII allowed us to spend (and employ) our way out of it. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [October 18, 2016, 4:28pm UTC](https://boards.straightdope.com/t/its-economics-101/768343/65 "2016-10-18T16:28:41Z")
> [@puddleglum](#): > > If you look at the stock market in 1928 and 1929 it was very effected by the negotiations between England, France and Germany over repayment of WW1 debts and reparations. The Young plan which was ratified in late 1929 was opposed by the German right and their fierce opposition to the Young plan was one of the reasons the Nazis were first able to gain a foothold in German government. This ascension of radicals and the possibility of a future war led to worldwide economic slowdown. You have any cites that a worry about war led to the Depression in 1929? German hyperinflation and the crash certainly helped the Nazis rise to power, no disputing that. But for the most part no one worried about them to the extent that it caused any economic slowdown until at least 1937 if not later - and I don’t recall it being a problem even then. It seems to me you are saying the Depression caused the Nazis who caused the Depression. Interesting. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [October 18, 2016, 5:51pm UTC](https://boards.straightdope.com/t/its-economics-101/768343/66 "2016-10-18T17:51:22Z")
> [@puddleglum](#): > > People in all societies everywhere and at all times want stuff, it is just a matter of whether those wants can be supplied that makes a difference between rich and poor societies. > The Great Depression was caused by French gold hoarding because of WW1, the rise to power of the nazis in germany, and a severe monetary shock. None of these concepts are economics 101. The first sentence here is incorrect, in context. The second sentence is also wrong, but points the way as to why the first sentence is wrong. 😉 The post you were challenging here was one pursuing the fact that consumer spending power helps build the economy. Please do not let us forget that “_We have nothing to fear but fear itself_” was uttered in the 1933 Inaugural Address (before there was any concern of war). FDR suggested that fear to spend, fear to loan, fear to invest were what was stymying the economy, not some “whether those wants can be supplied.” Your causes of the Depression are all wrong except “monetary shock,” which was _precisely_ the fear to spend and fear to invest, whose causative effect you are arguing against! ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [October 18, 2016, 6:01pm UTC](https://boards.straightdope.com/t/its-economics-101/768343/67 "2016-10-18T18:01:44Z")
Video: [The Great Depression: Crash Course US History #33](https://www.youtube.com/watch?v=GCQfMWAikyU) [Previous page](https://boards.straightdope.com/t/its-economics-101/768343.md?page=3)