Busting Depression Myths – TribLIVE: “There are no greater obstacles to the formation of sound public policies than mistaken understandings of history. Unfortunately, popular culture overflows with historical ignorance about the economy. Perhaps the most destructive historical myth in America involves the Great Depression. That economic calamity was not caused by laissez-faire capitalism.
Contrary to myth, New Deal policies prolonged and deepened the Great Depression. They didn’t end it.
A related myth is that the Depression was finally cured by America’s involvement in World War II. While unemployment shot way down and industrial output shot way up during WW II, neither of these occurrences can be read as a sign of economic recovery.
If wartime spending were sufficient to cure a depression, war zones all over the world today would be among the most economically vibrant places on Earth. Egypt and Syria would each be on the verge of stupendous economic booms. Of course, the people of these countries are quite poor and seem destined to remain poor for the foreseeable future.”