bendog
Diamond Member
I disagree. Markets are no self-regulating. They never have been. Not in the sense comparable to governmental resolution of market failures.How do you know there would have been a quick recovery? The boom and bust cycle of unregulated capitalism creates terrific devastation. The deeper the recession, the more robust the recovery. It depends on what you mean by gov. regulation, I suppose. Look at all the gov. spending for WWII. That helped FDR's recovery immensely. The New Deal was working. The only time it stalled was when FDR took some foolish advice and cut back on spending in the late 1930s causing the recovery to stall out temporarily (until gov. spending was hiked up again).
Historical example.
Every time the government has gotten out of the way, the recovery is quick. Every time they've infered, the recovery was prolonged.
The only reason WW2 succeeded at pulling us out of the Depression it because it forced FDR to relax and eliminate all the regulations he had imposed on industry in order to have a fighting chance against our enemies.
Year %Change in GNP President
---------------------------------
1930 - 9.4% Hoover
1931 - 8.5 Hoover
1932 -13.4 Hoover
1933 - 2.1 Hoover/Roosevelt
1934 + 7.7 Roosevelt
1935 + 8.1 Roosevelt
1936 +14.1 Roosevelt
1937 + 5.0 Roosevelt
1938 - 4.5 Roosevelt
1939 + 7.9 Roosevelt
Look at how the New Deal, enacted in 1933, turned around our economy. What happened in 1938? FDR listened to one of his advisors and started to cut back on gov. spending. That had disasterous results. WWII did not happen for 2 more years as a stimulative phenomenon.
The answer to your question would be found if you looked into the causes of the downturns, and global economic situation, at both 1920 and 1930. And it can be found online in Milton Friedman's A Monetary History of the US