Tuesday, September 04, 2007
Another Look at the Great Depression
Lots of ink (and bandwidth) has been spilled over the "Cause" of the Depression. The chart above should be of interest to people who talk about "Smoot-Hawley" (which was imposed AFTER 1929) and those who claim that it was the eeeeeeevil Hoover.
More likely the eeeeeeeevil Fed, which raised the discount rate and thus the price of housing--which then went into a tailspin beginning in 1925.
Also note that income did take a drop in the early 1930's, but it was not a spectacular one.
HT: Calculated Risk