Other than the name insinuates why is the earlier Depression in 1920 (NOT 1929!) unknown to people?
The article writer Thomas E. Woods, Jr.answer was:
For this reason, we should not be surprised that our political leaders have made such transparently ideological use of the past in the wake of the financial crisis that hit the United States in late 2007. According to the endlessly repeated conventional wisdom, the Great Depression of the 1930s was the result of capitalism run riot, and only the wise interventions of progressive politicians restored prosperity.
The Straight dope team answer was:
Probably because it was fairly short, and was followed by a period of enormous growth (for 8 years), and was dwarfed in comparison to the next depression?
I don’t find these arguments good enough to explain the reason for why it’s so little know… Any thoughts guys?
It’s not unknown. I just talked about all the recessions and depressions in another thread today. Here’s information about all the recessions and depressions in American history:
The fact that you haven’t heard of something doesn’t mean that it’s unknown. There was a large drop in business activity, but it lasted only ten months. There was a quick recovery.
That depression directly impacted my family’s history in a significant way. Some of the more notable results were that it lead to my parents meeting and my uncle surviving WWII.
If it wasn’t for that downturn, this post wouldn’t exist.
We learned about it in high school. Our history book didn’t exactly devote a lot of space to it but it was basically covered as part of the aftermath of WWI. The history book then went on about boom of the roaring 20’s and then the Great Depression. The book mentioned another depression after WWII as well.
The economy is cyclic. Every decade or so there’s a recession of some sort. None of these get the same focus as the Great Depression.
Your first quote isn’t an explanation at all. It does not even address the issue. Perhaps Woods does have something to say about the matter, but if so it is not in that quote.
I think I can guess, from what you do quote, and the rest of your post, what other argument is lurking in the background there. If I am right, it is a very bad one. First of all, in a capitalist economic system it is just about true by definition that all depressions are caused by capitalism running riot, r, at least, failing in some way. (By the same token, of course, in a capitalist economy capitalism also gets to take credit for economic good times.) Secondly, your preamble implies (and perhaps this is the burden of whatever it is that Woods says that you have not quoted) that the 1920 depression is not well remembered because the memory of it has been suppressed because teh memory of it has been suppressed by the liberal media, and/or liberal academia, because it does not fit their propagandistic historical narrative. That is absurd for a whole slew of reasons.
By contrast the answer from “The Straight dope team” (Cecil?) is right on point, and sounds very plausible.
Not surprising…there were “Mini Depressions” all through the 1920’s-people would start rumors about a local bank, there would be a “run” (people trying to withdraw their savings), and the bank would fail-pulling down local businesses with it. The USA was OK through the '20s-mainly because of easy credit and expanding consumer demand. But much of Europe had never recovered fully from WWI-Germany was in recession throughout the 1920s.
I think the explanation is that depressions with obvious causes (in this case, a sloppy transition from a war-time economy back to a peace-time one) aren’t as talked about as they are “explained” in some way. Additionally, depressions as a result of bubbles are more relevant to the modern Federal Reserve System-in-place world.
Same reason the Panic of 1857 is talked about, but not the 1865 recession-- the 1865 one was obviously the result of war, thus not very interesting to study.
Why don’t people know there were three - three! - recessions during the Eisenhower administration when we were supposed to be the only global power? Who made the money then? Corporations! Is it a coincidence that the conservatives gained a half century of power? Why aren’t the libtards shouting about this? Because they were bought off too!
IOW, the economy runs into recessions regularly. If they’re short and the succeeding recovery overwhelms them, they are forgotten. They can legitimately be treated like a bad cold when a person is asked about health. Annoying at the time but too insignificant to be part of a serious medical history. Recessions to one part of the economy are treated the same way. Farming was in recession for almost the whole decade of the 1920s. But the U.S. was converting heavily to an industrial economy, so it didn’t affect a large enough percentage to be of interest except to specialists. History is always complicated and always is a million layers deeper than the short story that makes the headlines of history.
Why isn’t there a link to the actual article by Thomas Woods? OP, what are you trying to hide? Who are you really working for?
No, by me. Cecil only answers questions in his column; that’s all he’s paid for, that’s all he does. I sort Cecil’s mail, and I try to respond to most questions in some form – and often, I think the question would start a good discussion here on the Message Boards. So I gave oz_W my off-the-top-of-my-head answer and suggested he come here for more discussion.
I don’t think it’s a case of anything being surpressed by the media, it’s just a case of US history trying to cover 250 years or so, and something has to be skipped over. So it’s not a big part of HS curriculum, and hence not well-known to the general population.
Way back there were a series of TV programs where Harry Truman spoke about his life and his presidency. I remember him saying that economic policy right after WW II was set in some measure to avoid a recurrence of the 1920 downturn, which he said was due to the sudden decline in government spending.
Here is the book based on this material. I don’t own it so I can’t confirm my recollection.
As for why no one mentions it, I suspect the Great Depression overshadowed it, and most of the other previous crashes.
The argument I hear is that during the “good times” of the 2000’s, the stock market was doing extremely well but that wasn’t really reflected in the circumstances of most Americans, and that fundamental unbalance is what lead to the depth of the crash.
In that context, the Depression of 1920 is a major piece of evidence in favor of comparing the Great Depression and so-called Great Recession. In both cases you had a small downturn followed by an incomplete recovery followed by an even bigger crash. Although the stock market recovered quickly after the 1920 depression, agricultural prices never really did. At a time when about 1/3rd of Americans were farmers, most farmers were just barely scraping by throughout the 20’s. In the post Dot Com/September 11 recession, again the stock market recovered quickly but the manufacturing and tech sectors never did. In both cases after a small downturn the financial sector and corporate profits skyrocketed while individual Americans’ earnings on average remained stagnant or grew much more slowly than the economy was “on paper”. Another very relevant parallel is that in both cases the good fortunes of the financial sector led to a lot of money being available to lend and the relatively poor circumstances of the rest of the economy led to lots of people being able to borrow to buy things they couldn’t really afford; consumer goods in the 20’s and houses in the 2000’s.
Well please read the article to better understand my question (for some reason it didn’t work the first post, and I am not hiding something from you Exapno Mapcase, haha)
What I meant by unknown, is not only to the general public, but also what the current Obama economic advisers think about it for example?.. as it seems they totally disagree based on all the recent stimulus packages…
It is really confusing to know if Harding’s laissez-faire policy was the cause of the recovery or something else.
GreasyJack- I have no clue if the Great Depression is a consequence of Harding’s Policy or not, nor how the agricultural sector was affected so maybe this is where it fails? I don’t know enough.
Mises.org is the home of Libertarian nutjobs. Your automatic assumption should be that everything they say has as much validity as you would find on creationism.org.
That being said, I have no intention of reading a long article from known nutjobs and so I have to remove myself from the conversation.
Post-WWI was a horrible time - influenza epidemic, this depression, the whole lost generation thing. But it was followed by a huge boom, and people’s memories are short.
Hell, how many people under 40 today can even tell you when the great depression started? It’s ancient history to them. Compared to that, the depression you’re talking about is as a gnat’s whisker.
Roddy
Well, how often do you hear of the panic of 1837 or 1893? The reason the Great Depression is far more remembered than other crisises is:
–It lasted a lot longer than other depressions. Look at this chart. A full 11 years after the crash of 1929 unemployment was still at a staggering 15%.
–Nothing since then has come even close in intensity. The 1981-82 and 2008 recessions had 10% employment for a few months. Unemployment during the Great Depression peaked at 25%, and stayed at the 10% range for a full decade.
–The Great Depression changed significantly the role of government, especially in regards to the economy. Before then, depressions were basically treated as forces of nature that were impossible to stop–and they happened at the rate of once a generation. Beginning with the New Deal, the government decided its role was to prevent large scale panics if possible and to weaken their impact when they did happen. Everything from the FDIC to Social Security is a result of this government intervention.
We’re so used to thinking of the 1920s as an entire decade of prosperity. But I recently read David McCullough’s Truman biography, and it detailed this depression (recession?) as the cause for Truman and his business partner losing their haberdashery in Kansas City. The good thing is his failing business gave him time to start pursuing local politics.
Funny how things work out. Think about what I wrote above. If Truman had ended up a successful businessman, he might never have entertained the notion of playing around with politics. So you could say that depression directly impacted everyone’s family history in a significant way.
I think this whole thread is a mess. The OP started it by immediately conflating
the 1920 recession with the Great Depression. Then others jumped in about 1857,
1865, and 1893.
Merchant (commercial) shipping remained strong in 1919 because US ships and
personnel received wartime subsidies. When a million troops were repatriated and
all the war materiel was brought home, the subsidies ended and seafaring wages
plummeted. Seamen lost the 1921 strike against shipowners, and the ISU (International
Seafarers Union) leaders cut sweetheart deals. My aunt’s first husband could not
support her on his reduced wages, and she divorced him. She went to Denver to stay
with her younger brother & his wife. She ended up marrying the Colorado Labor
Commissioner. During the 1920’s she owned and operated a rooming house in Denver.
My mother, then age 12, was sent to Denver to spend the summer of 1930 with her eldest sister. When my mom came back to Little Rock, her hair was bobbed and she was
dressed as a flapper.
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[li] ↑ This stupidity likely reached its zenith with Michele Bachmann’s [YouTube Link] “Hoot-Smalley speech”.[/li][li] ↑ “The Contraction of 1920-1921,” Ch. 5 Pt. 3, pp. 231-240 in Friedman and Schwartz. [1][/li][li] ↑ NBER business cycle data.[/list][/li][/quote]
It’s forgotten for the same reason no one remembers that Bernie Carbo hit a home run in game six of the 1975 World Series: Another, more dramatic one overshadowed it.
