This isn't a pop quiz, there is no prize at the end for whoever gets the most correct answers, and no one will rap your knuckles if your answers don't agree with mine.
Here are the facts:
- Excessive speculation led to the crash and subsequently the depression
- Artificially high valuation led to the crash and subsequently the depression
- Mass failures of banks led to the crash and subsequently the depression
- Reduction in availability of loans followed the crash and led to the depression
- Massive loss of jobs followed the crash and led to the depression
- Unbalanced foreign trade levels followed the crash and led to the depression
Once you have completed the exercise I recommend reading a little about the Great Depression and perhaps learning how to make dishtowels out of flour sacks...oh! Wait. Can you use paper bags to dry dishes?
As we prepare to vote for a new administration it might be wise to look back at the arguments that prevailed during the times of Coolidge, Hoover and FDR. Coolidge embodied the "let the market solve any problems" and it was conditions that existed in his administration that led to the problems inherited by Hoover. Hoover believed that volunteerism and pacts between the private sector and government would avoid dependence on government and he spearheaded a Mexican Repatriation program in response to uncontrolled Mexican immigration. FDR's administration created the programs that now shake and tremble despite the role they played in History...the SEC, the FDIC and Social Security. It all sounds too hauntingly familiar.
Those who fail to learn from history are doomed to repeat it.
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