The Forgotten Depression

1921: The Crash That Cured Itself

James Grant

• Publisher: Simon & Schuster
• Year: 2014
• Print ISBN:
  9781451686463
• eBook ISBN:
  9781451686487
• Topic: Economics
• Subtopic: Economic History
• Index: Economics

James Grant’s story of America’s last governmentally untreated depression: A bible for conservative economists, this “carefully researched history…makes difficult economic concepts easy to understand, and it deftly mixes major events with interesting vignettes” (The Wall Street Journal).

In 1920–1921, Woodrow Wilson and Warren G. Harding met a deep economic slump by seeming to ignore it, implementing policies that most 21st century economists would call backward. Confronted with plunging prices, wages, and employment, the government balanced the budget and, through the Federal Reserve, raised interest rates. No “stimulus” was administered, and a powerful, job-filled recovery was under way by late 1921. Yet by 1929, the economy spiraled downward as the Hoover administration adopted the policies that Wilson and Harding had declined to put in place.

In The Forgotten Depression, James Grant “makes a strong case against federal intervention during economic downturns” (Pittsburgh Tribune Review), arguing that the well-intended White House-led campaign to prop up industrial wages helped turn a bad recession into America’s worst depression. He offers examples like this, and many others, as important strategies we can learn from the earlier depression and apply today and to the future. This is a powerful response to the prevailing notion of how to fight recession, and “Mr. Grant’s history lesson is one that all lawmakers could take to heart” (Washington Times).

Table of contents

• Cover
• Dedication
• Epigraph
• Preface
• 1. The Great Inflation
• 2. Coin of the Realm
• 3. Money at War
• 4. Laissez-Faire by Accident
• 5. A Depression in Fact
• 6. City Bank on the Carpet
• 7. Egging On Deflation
• 8. A Debacle “Without Parallel”
• 9. The Comptroller on the Offensive
• 10. A Kind Word for Misfortune
• 11. Not the Government’s Affair
• 12. Cut from Cleveland’s Cloth
• 13. A Kind of Recovery Program
• 14. Wages Chase Prices
• 15. Shrewd Judge Gary
• 16. “A Higher Sense of Service”
• 17. Gold Pours into America
• 18. “Back to Barbarism?”
• 19. America on the Bargain Counter
• 20. All for Stability
• Epilogue: A Triumph, in Its Way
• Photographs
• Acknowledgments
• About the Author
• Notes
• A Select Bibliography
• Index
• Copyright