The Forgotten Depression
by James Grant
The Great Depression has a special place in American history, allegedly representing all of the ways that government intervention in the economy can fix economic downturns. There is, however, a problem for this point of view: the Great Depression endured for years, lasting longer than depressions historically had. In The Forgotten Depression, James Grant examines the depression of 1920-1921, and pays special attention to how the government’s inaction during the crisis contributed to a relatively short depression and, ultimately, a quick and dramatic recovery. Grant’s conclusion, that government interference with the economy’s prices, wages and interest rates prolongs depressions, is one that deserves careful consideration.
Praise for The Forgotten Depression
“Grant engagingly tells the tale of this extraordinary episode, which has been shoved down the memory hole because it doesn’t comport with reigning economic orthodoxy.” – Forbes
“…the depression of 1920-21 has not received the scrutiny it deserves. The instructive lesson of the story is that the federal government ‘met the downturn by seeming to ignore it—or by implementing policies that an average 21st century economist would judge disastrous’—and the hands-off approach actually worked. . . . Once read, The Forgotten Depression will be hard to forget.” – Barron’s
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