I'm teaching about recessions to my undergrad business students. I'm finding that their high schools taught them complete lies about the Great Depression.

These students are taught that the Great Depression was caused by a stock market panic in 1929 that bankrupted the banks. They were taught that the recovery was because of economic stimulus provided by first the New Deal and then World War 2.

But this is objectively false. First, banks generally didn't invest in the stock market, and they didn't start failing until 13 months after Black Friday. Second, the New Deal (1933) did not attempt to provide a fiscal stimulus - in fact the New Dealers insisted on passing balanced budgets. We can argue about if the New Deal was good or bad (I think it was bad), but it was NOT a stimulus bill. Third, World War Two did not drag us out of the Depression. The Depression was over by 1933, and there was another recession in 1937-38 caused by the Dust Bowl. By the time the draft was started in 1940, we had been in an economic boom for 2 full years.

The true story of the Depression is simple: Academic research has concluded that the Depression was caused by an inexperienced Fed that tightened monetary policy from 1928 to 1933. This caused 4 waves of bank failures, each worse than the last. The recovery was due to the Fed finally loosening monetary policy in 1933. The Dust Bowl hit a weakly recovering economy, causing a double-dip recession in 1937-38


Why are schools doing this?

The problem isn't that schools aren't teaching history, it's that they're teaching a combination of complete fabrications and stories that were disproved 50 years ago.

The problem isn't that the truth is too complicated for kids to understand. If anything, the truth is simpler than the lies.

Those are really good questions.

I cant seem to find it now, but I remember hearing that the run on banks was actually started by a disgruntled customer. A guy wanted to get all his money and the bank gave him a hard time, so after he finally got it all, he was so bent out of shape that he stretched the truth, and then they went to pull their money... and that started the avalanche.

It was in some documentary i saw on the history channel or something like that but i cant seem to find it now. Maybe that's all false, but if I cant find it again... I might not be able to research it more.

(03-12-2019 02:09 PM)Captain Bearcat Wrote:  I'm teaching about recessions to my undergrad business students. I'm finding that their high schools taught them complete lies about the Great Depression.

These students are taught that the Great Depression was caused by a stock market panic in 1929 that bankrupted the banks. They were taught that the recovery was because of economic stimulus provided by first the New Deal and then World War 2.

But this is objectively false. First, banks generally didn't invest in the stock market, and they didn't start failing until 13 months after Black Friday. Second, the New Deal (1933) did not attempt to provide a fiscal stimulus - in fact the New Dealers insisted on passing balanced budgets. We can argue about if the New Deal was good or bad (I think it was bad), but it was NOT a stimulus bill. Third, World War Two did not drag us out of the Depression. The Depression was over by 1933, and there was another recession in 1937-38 caused by the Dust Bowl. By the time the draft was started in 1940, we had been in an economic boom for 2 full years.

The true story of the Depression is simple: Academic research has concluded that the Depression was caused by an inexperienced Fed that tightened monetary policy from 1928 to 1933. This caused 4 waves of bank failures, each worse than the last. The recovery was due to the Fed finally loosening monetary policy in 1933. The Dust Bowl hit a weakly recovering economy, causing a double-dip recession in 1937-38


Why are schools doing this?

The problem isn't that schools aren't teaching history, it's that they're teaching a combination of complete fabrications and stories that were disproved 50 years ago.

The problem isn't that the truth is too complicated for kids to understand. If anything, the truth is simpler than the lies.

Maybe that's what they remember, not what they are taught. My children are taking US History now. They talk about lots of causes. Farm prices, buying on credit, the stock market, tariffs, all leading to a vicious cycle (although they don't use the "vicious cycle" term).

And while the New Dealers did try to balance the budget, they did start out with some stimulus (Relief, Recovery, Reform). One text blames the balancing the budget and reducing the stimulus too early for leading to the 2nd collapse. As I recall, unemployment was still 15% when the 2nd collapse hit. That was worse than any recession since and it was still 10% when WWII started.

There was a very brief mention of Keynes and the Monetarists.

(03-12-2019 02:28 PM)q5sys Wrote:  I cant seem to find it now, but I remember hearing that the run on banks was actually started by a disgruntled customer. A guy wanted to get all his money and the bank gave him a hard time, so after he finally got it all, he was so bent out of shape that he stretched the truth, and then they went to pull their money... and that started the avalanche.

It was in some documentary i saw on the history channel or something like that but i cant seem to find it now. Maybe that's all false, but if I cant find it again... I might not be able to research it more.

Found it: https://www.history.com/topics/great-dep...n/bank-run

Quote:In December 1930, the New York Times reported that a small merchant in the Bronx went to a branch of the Bank of the United States and asked to sell his stock in the institution. When told the stock was a good investment and advised not to sell, he left the bank and began spreading rumors that the bank had refused to sell his stock. Within hours, a crowd had gathered outside the bank, and that afternoon between 2,500 and 3,500 depositors withdrew a total of $2 million in funds.

"FALSE RUMOR LEADS TO TROUBLE AT BANK; Branches of Bank of United States in the Bronx Meet All Withdrawal Demands. LARGE CROWD AT ONE PLACE Long Line of Depositors Paid in Full—Officers Allay the Fears of Others. Other Branches Meet Demands. Conference of Bankers", The New York Times, 11 December 1930
But sadly its behind a paywall: https://select.nytimes.com/mem/archive/p...5B808FF1D3

Sad thing to be charged for our history.

Milton Friedman pointed this out decades ago. As he explained, there was a deliberate attempt to teach the government was the solution to a problem (when in fact they were the actual problem).

I used to do adjunct work in Montgomery doing basic constitutional law.

The average American kid knows nothing.

People were confused, why the 1932 election was a landslide.

https://en.m.wikipedia.org/wiki/1932_Uni...in_Alabama

(03-12-2019 02:09 PM)Captain Bearcat Wrote:  I'm teaching about recessions to my undergrad business students. I'm finding that their high schools taught them complete lies about the Great Depression.

These students are taught that the Great Depression was caused by a stock market panic in 1929 that bankrupted the banks. They were taught that the recovery was because of economic stimulus provided by first the New Deal and then World War 2.

But this is objectively false. First, banks generally didn't invest in the stock market, and they didn't start failing until 13 months after Black Friday. Second, the New Deal (1933) did not attempt to provide a fiscal stimulus - in fact the New Dealers insisted on passing balanced budgets. We can argue about if the New Deal was good or bad (I think it was bad), but it was NOT a stimulus bill. Third, World War Two did not drag us out of the Depression. The Depression was over by 1933, and there was another recession in 1937-38 caused by the Dust Bowl. By the time the draft was started in 1940, we had been in an economic boom for 2 full years.

The true story of the Depression is simple: Academic research has concluded that the Depression was caused by an inexperienced Fed that tightened monetary policy from 1928 to 1933. This caused 4 waves of bank failures, each worse than the last. The recovery was due to the Fed finally loosening monetary policy in 1933. The Dust Bowl hit a weakly recovering economy, causing a double-dip recession in 1937-38


Why are schools doing this?

The problem isn't that schools aren't teaching history, it's that they're teaching a combination of complete fabrications and stories that were disproved 50 years ago.

The problem isn't that the truth is too complicated for kids to understand. If anything, the truth is simpler than the lies.

Capitalism bad. Socialism good. You confuse the broader message (or lie) of today's public education it you simply teach the children the mistakes of monetary policy followed by an appropriate correction of that monetary policy.

Runaway greedy capitalism sold the masses a bill of goods and then collapsed the market on millions of middle class and poor, and socialistic policies led to the miraculous recovery sells much better with the agenda today.

It's really not difficult to see what's going on here. But I think deep down you know that and aren't quite ready to call it what it is.

BTW: You left out the impact of the Gold Act of 1935.

(03-12-2019 09:54 PM)JRsec Wrote:  

(03-12-2019 02:09 PM)Captain Bearcat Wrote:  I'm teaching about recessions to my undergrad business students. I'm finding that their high schools taught them complete lies about the Great Depression.

These students are taught that the Great Depression was caused by a stock market panic in 1929 that bankrupted the banks. They were taught that the recovery was because of economic stimulus provided by first the New Deal and then World War 2.

But this is objectively false. First, banks generally didn't invest in the stock market, and they didn't start failing until 13 months after Black Friday. Second, the New Deal (1933) did not attempt to provide a fiscal stimulus - in fact the New Dealers insisted on passing balanced budgets. We can argue about if the New Deal was good or bad (I think it was bad), but it was NOT a stimulus bill. Third, World War Two did not drag us out of the Depression. The Depression was over by 1933, and there was another recession in 1937-38 caused by the Dust Bowl. By the time the draft was started in 1940, we had been in an economic boom for 2 full years.

The true story of the Depression is simple: Academic research has concluded that the Depression was caused by an inexperienced Fed that tightened monetary policy from 1928 to 1933. This caused 4 waves of bank failures, each worse than the last. The recovery was due to the Fed finally loosening monetary policy in 1933. The Dust Bowl hit a weakly recovering economy, causing a double-dip recession in 1937-38


Why are schools doing this?

The problem isn't that schools aren't teaching history, it's that they're teaching a combination of complete fabrications and stories that were disproved 50 years ago.

The problem isn't that the truth is too complicated for kids to understand. If anything, the truth is simpler than the lies.

Capitalism bad. Socialism good. You confuse the broader message (or lie) of today's public education it you simply teach the children the mistakes of monetary policy followed by an appropriate correction of that monetary policy.

Runaway greedy capitalism sold the masses a bill of goods and then collapsed the market on millions of middle class and poor, and socialistic policies led to the miraculous recovery sells much better with the agenda today.

It's really not difficult to see what's going on here. But I think deep down you know that and aren't quite ready to call it what it is.

BTW: You left out the impact of the Gold Act of 1935.

On the contrary. Your answer was the only one I could think of that made any rational sense.

I posted this thread in the hopes that someone would come up with a different theory.

(03-15-2019 04:36 PM)Captain Bearcat Wrote:  

(03-12-2019 09:54 PM)JRsec Wrote:  

(03-12-2019 02:09 PM)Captain Bearcat Wrote:  I'm teaching about recessions to my undergrad business students. I'm finding that their high schools taught them complete lies about the Great Depression.

These students are taught that the Great Depression was caused by a stock market panic in 1929 that bankrupted the banks. They were taught that the recovery was because of economic stimulus provided by first the New Deal and then World War 2.

But this is objectively false. First, banks generally didn't invest in the stock market, and they didn't start failing until 13 months after Black Friday. Second, the New Deal (1933) did not attempt to provide a fiscal stimulus - in fact the New Dealers insisted on passing balanced budgets. We can argue about if the New Deal was good or bad (I think it was bad), but it was NOT a stimulus bill. Third, World War Two did not drag us out of the Depression. The Depression was over by 1933, and there was another recession in 1937-38 caused by the Dust Bowl. By the time the draft was started in 1940, we had been in an economic boom for 2 full years.

The true story of the Depression is simple: Academic research has concluded that the Depression was caused by an inexperienced Fed that tightened monetary policy from 1928 to 1933. This caused 4 waves of bank failures, each worse than the last. The recovery was due to the Fed finally loosening monetary policy in 1933. The Dust Bowl hit a weakly recovering economy, causing a double-dip recession in 1937-38


Why are schools doing this?

The problem isn't that schools aren't teaching history, it's that they're teaching a combination of complete fabrications and stories that were disproved 50 years ago.

The problem isn't that the truth is too complicated for kids to understand. If anything, the truth is simpler than the lies.

Capitalism bad. Socialism good. You confuse the broader message (or lie) of today's public education it you simply teach the children the mistakes of monetary policy followed by an appropriate correction of that monetary policy.

Runaway greedy capitalism sold the masses a bill of goods and then collapsed the market on millions of middle class and poor, and socialistic policies led to the miraculous recovery sells much better with the agenda today.

It's really not difficult to see what's going on here. But I think deep down you know that and aren't quite ready to call it what it is.

BTW: You left out the impact of the Gold Act of 1935.

On the contrary. Your answer was the only one I could think of that made any rational sense.

I posted this thread in the hopes that someone would come up with a different theory.

I was merely implying that you may have a bit more hope left in you than do I. My hope now is in God. I simply don't trust anything else to work out well. There's too much corporate strength and too little of the common sense that the middle class once provided to think that we will go back to anything that resembles the rational. Top down has no legitimate feed back loop and they merely attribute failure to anything but themselves. So poverty is the fault of the majority from which corporations stand aloof. And education blows philosophically with whatever is funding them. And as our state governments pander more and more to corporations which locate with them, so too does the agenda of education take on the mores of corporate America.

So therefore good sir, reason has been cut out of the loop. And one of my favorite definitions of hell is, "The absence of reason."

It was caused by Republican policies of the 20’s (just like recessions in ‘91 and ‘08) and solved by FDR.

(03-15-2019 07:25 PM)swagsurfer11 Wrote:  It was caused by Republican policies of the 20’s (just like recessions in ‘91 and ‘08) and solved by FDR.

The Great Depression was solved by Adolph.

The recession of 91 was solved by HW after being caused by his compromising with Tip O'Neil and raising taxes, but he solved it just about a month too slow to win the election.

The recession of 08 was a joint effort. Stupid Democratic banking policies coupled with W.'s laissez faire approach. I will give McCain credit for this one. He and 14 other Republican senators went to W. in 06 and told him he needed to do something about the housing bubble and easy money. He didn't.