The Great Depression of 1920
Never heard of it? That's not surprising - it didn't last long. The 20's were roaring, not greatly depressing. Yet virtually none of the American population knows that the nation's economy actually took a worse hit in 1920 than it did at any point during the Great Depression. Consider these wiki-nuggets of wiki-knowledge:

The recession in the United States was brief relative to the Great Depression later that decade, but it included a very sharp price deflation. The decline in the GNP price deflator from 1920 to 1921 is the largest one-year percentage decline in the series in the more than 120 years covered....

Various estimates show that one-year deflation figures were 18 percent, 13.0 percent, and 14.8 percent, respectively. The closest comparator is the 11.5 percent deflation recorded for 1931-32, the third year of the Great Depression. Wholesale prices declined by 36.8 percent for 1920-21, the largest one-year decline on record, going back at least to the American Revolutionary War period. The 1921 deflation contains another striking feature. Not only was it sharp, it was large relative to the accompanying decline in real product. The ratio of the percentage decline in the GNP deflator for 1920-21 to the percentage decline in real GNP is 2.6 using the Department of Commerce figures. By contrast, during 1929-30, the first year of the Great Depression, the GNP deflator declined by 2.7 percent and real GNP by 9.4 percent, for a ratio of 0.3. The ratios of the percentage decline in GNP prices to the percentage decline in real GNP for 1930-31, 1931-32, 1932-33, and 1937-38, the other Great Depression years in which real GNP declined, were 1.0, 0.9, 1.2, and 0.3, respectively, all well below the 1920-21 figures.

In other words, if Jim Cramer were alive in 1920, he would have actually committed suicide on air. So why did Al Capone spend the next decade walking around in pinstripe suits instead of rags stolen from orphans and the recently deceased? Because rather than the massive government intervention that took place in the 30's, in 1920 and 1921, the feds hardly did anything at all:

Federal spending was cut from $6.3 billion in 1920 to $5 billion in 1921 and $3.2 billion in 1922. Federal taxes fell from $6.6 billion in 1920 to $5.5 billion in 1921 and $4 billion in 1922. Harding's policies started a trend. The low point for federal taxes was reached in 1924; for federal spending, in1925. The federal government paid off debt, which had been $24.2 billion in 1920, and it continued to decline until 1930.

With Harding's tax and spending cuts and relatively non-interventionist economic policy, GNP rebounded to $74.1 billion in 1922. The number of unemployed fell to 2.8 million— a reported 6.7 percent of the labor force— in 1922. So, just a year and a half after Harding became president, the Roaring Twenties were underway. The unemployment rate continued to decline, reaching an extraordinary low of 1.8 percent in 1926. Since then, the unemployment rate has been lower only once in wartime (1944), and never in peacetime.

The worst economic crash since we started keeping most relevant records didn't happen during the Great Depression. It happened in 1920. Yet America was back on its feet in less than two years, while the next crunch was dragged out for a decade. The free markets have proven beyond a shadow of a doubt that they grow faster than planned economies - why on earth wouldn't they fix themselves faster, too?

Unfortunately, those who seem to be running things don't seem to read or understand history. History has a way of repeating itself. Government has never been able to do anything efficiently. I don't expect to see that change. They don't understand that it is much better for the entire country if government gets out of the way and allows the economy to work through it's difficulties. They don't understand that growing government only makes matters worse and raises taxes for everyone.

Neither do some who cut and paste propaganda here. :hellno:

The American economy has ALWAYS been tied to World events and trade. I suppose the O.P. never heard of the FIRST WORLD WAR.... the GREAT WAR... The WAR TO END ALL WARS.

IIRC, it was about 1914 to 1918....just BEFORE the "roaring 20's" We had little involvement in that war, compared to the NEXT war, yet we suffered greatly due to trade interruptions.

All those numbers mean nothing. Our GDP was much lower, so percentages mean nothing. Immigration, and therefore population, was just getting into swing. Add to that the "Dust Bowl."

With WWII, we ramped up the MIC to "go to war" and put America to work. But, we also took on great debt for reconstruction of Europe. The debt was much higher, the devastation much greater, and the trade balance much lower. Yes, it took a decade to recover.

Heck, I believe Wall Street was in its infancy! And now it has become a monster.

People who LIVE IN THE PAST, will repeat the PAST! People who use figures from the past to explain or extrapolate our future are FOOLS!

An automobile that cost $1,000 in 1920 now costs over $30,000!!!

No offense, GMAN.... but you and I have both been around long enough to have helped BUILD the "Esenhower Interstate System." Without it, you would take 2 days longer at least to deliver a load... and make yuor money!

There is no "future" in dwelling on the PAST! The future is for the bold! America has always been on the cutting edge. Let's find a way to work together for our FUTURE, without crying over the spilled milk of the past!

well said gman.............!!!!!!

propaganda...???????.....truth is not propaganda.......!!!!!

propaganda..a word the
"Politburo" used to throw around ALOT when they had no answers...:hellno:

SOPHISTRY, n. The controversial method of an opponent, distinguished
from one's own by superior insincerity and fooling. This method is
that of the later Sophists, a Grecian sect of philosophers who began
by teaching wisdom, prudence, science, art and, in brief, whatever men
ought to know, but lost themselves in a maze of quibbles and a fog of
words.

To some extent the U.S. economy has been tied to trade. However, we were mostly an exporting nation until about the late 1970's or early 1980's when many of involved in our major industries moved operations abroad.

We lost over 116,000 people in WWI and over 416,000 in WWII. Essentially, both of these wars involved the same principals and real estate. Between WWI and WWII the U.S. became more of an isolationist nation. It wasn't until we were attacked at Pearl Harbor that we got involved in WWII. Most people in this country didn't want to get involved in another war prior to Pearl Harbor.

The dust bowl of the 1930's helped to prolong an already difficult economic situation, but the main reasons for the stock market crash and following economic depression are basically the same as they are today. We can learn a lot from history. The reason history repeats itself is because so many people tend to ignore it. We don't need to live in the past, but we should be willing to learn from it. Otherwise, we are destined to repeat the same mistakes that others have made before us. The stock market is more than 200 years old, although it had it's beginnings in a different way in which we see today. The New York Stock Exchange had it's beginnings in 1792. Granted, the market of 1929 was somewhat new to many but it had been around for more than a century when the crash occurred.

The current interstate system did not exist when I first started driving. It was in some area's, but most were not completed. The first trip I made to California in 1972 only had parts of I-40 completed. We were still using Route 66. The interstate system had it's origins in Germany to help the military to move more easily from one part of the country to another. The side benefit in this country is that it enabled average citizens to more more easily from one part of the country to another and led to development away from the east coast to the west. While I like the shortened time to get from one coast to the other we lost something with all this development. It has sped up movement of freight and people but has also split up families who have moved across the country in search of opportunities rather than staying closer to home.

I agree that we need to have a bold vision for the future, but let us not forget the mistakes of the past and how we got to this point in our economic and political history.