From the overreaching grasp of the government to the invisible hand. What approach does the most good for the most people? In this article by Thomas Sowell,he puts forward the argument that government did more harm than good by intervening too much during the great oppression. The popular perception that big government solved the Great Depression, is one of the more infamous acts of group thought perpetrated on the American people.
A Mind-Changing Page
The idea that the stock-market crash caused the Great Depression is difficult to reconcile with the data.
While the market produced a peak unemployment rate of 9 percent — briefly — after the stock-market crash of 1929, unemployment shot up after massive federal interventions in the economy. It rose above 20 percent in 1932 and stayed above 20 percent for 23 consecutive months, beginning in the Hoover administration and continuing during the Roosevelt administration.
What was the difference between these two stock-market crashes? The 1929 stock-market crash was followed by the most catastrophic depression in American history, with as many as one-fourth of all American workers being unemployed. The 1987 stock-market crash was followed by two decades of economic growth with low unemployment.
But that was only one difference. The other big difference was that the Reagan administration did not intervene in the economy after the 1987 stock-market crash — despite many outcries in the media that the government should “do something.”