Quote:
Originally Posted by sperbonzo
First of all, there was another crash in the early 20s. And though it was initially actually more severe than the Great Depression, it turned out to be relatively short and weak precisely because the federal government did nothing about it. The "Great" depression was made much worse and much longer because of New Deal legistlation. Look at things like the Smoot-Hawley tariff and the National Industrial Recovery Act, etc....
Secondly, by 1935 to 1938, that new deal legistlation was being pushed back and overturned by congress. In fact New Deal legislation was so harmful to employment and capital formation that it was effectively halted altogether by 1938.
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Actually the first crash was stopped by a group of Wall Street billionaires pumping a ton of money into the market to prop it up and boost confidence. Exactly what the government did with its "stimulus" package.
They saw the writing on the wall and that the govt wasn't going to act so they acted.
Granted, it was pure self preservation. In reality they did it to buy themselves time so they could sell off stocks and send money out of the country before the larger crash hit. It was just a stop gap to give the insiders time to save their own asses. The same thing the stimulus package was created for, to give the insiders enough time to save their asses and stop the public from tipping the balance.
Depressions and market crashes are purely mental. The market decides the gig is up and the money train comes to a halt. Until the people feel safe enough to start that train rolling again all anyone can do is try and spend their way out.
Tony Soprano said it best "Stocks!? You have to be involved in some insider trading shit for that to pay off!"