THE GREAT DEPRESSION devastated every
part of America, even its smallest towns.
Library of Congress
According to this simplistic
perspective, an important pillar of capitalism, the stock market, crashed and
dragged America into depression. President Herbert Hoover, an advocate of
"hands-off," or laissez-faire, economic policy, refused to use the power of government and
conditions worsened as a result. It was up to Hoover's successor, Franklin
Delano Roosevelt, to ride in on the white horse of government intervention and
steer the nation toward recovery. The apparent lesson to be drawn is that
capitalism cannot be trusted; government needs to take an active role in the
economy to save us from inevitable decline.
who propagate this version of history might just as well top off their remarks
by saying, "And Goldilocks found her way out of the forest, Dorothy made it
from Oz back to Kansas, and Little Red Riding Hood won the New York State
Lottery." The popular account of the Depression as outlined above belongs in a
book of fairy tales and not in a serious discussion of economic history.