Who/What Caused the Great Depression?

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Milton Friedman weighs in on the question.

From 1929-1933 the total quantity of currency (M2) in the US declined by 1/3. The total number of banks fell by 1/3. There never was a moment when the Federal Reserve couldn’t have controlled the quantity of currency in circulation in the nation. -Friedman

The Great Depression wasn’t caused by private business. It was caused by a failure in government. 

9 thoughts on “Who/What Caused the Great Depression?

  1. It is really strange how the supply of circulating cash could decrease so rapidly.

    And now Obama wants to to decrease our cash supplies with his Obamacare tax. This nation is in trouble.

  2. Yes, Opus, the nation IS in trouble. We had a chance to change things but too many people wanted to make a left-wing political statement. May they hunger greatly.

  3. My in-laws visited some old friends in Long Beach recently who have fallen on hard times. The man (in his 70's) onced owned a business designing widgets. Now they're living with the help of a neighborhood labor exchange where people trade "points" for services rendered. It's close to bartering. People adapt.

  4. The government usually blames greedy businesses for all of society's ills. As Friedman points out, the government has the bully pulpit, not individual business tycoons (maybe with the exception of The Donald).

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