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.
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.)
it is actually modern ‘socialist’ steps that have moderated the normal wild swings in economies.
Take a look at this list;
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.
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.
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!
