Talk:Great Depression

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== Please clarify treadline in caption of image under 'Turning point and recovery' ==markets crashed

The overall course of the Depression in the United States, as reflected in per-capita GDP (average income per person) shown in constant year 2000 dollars, plus some of the key events of the period.[1]

If I could edit this article, I would add [clarification needed (what is 'Full Normal GDP' (red dotted line))] to the caption of the image shown to the right.

More specifically, what assumptions go into that curve? It's clearly a line fit to some data... Which years does that data come from? Why are those years relevant? Please explain, thanks 140.180.189.88 (talk) 21:37, 1 January 2013 (UTC)

Also, let me add: how is a linear fit justified? Is economic growth linear? 140.180.189.88 (talk) 21:41, 1 January 2013 (UTC)

You're right. I don't think that "Full Normal GDP" is a commonly used term (someone please let me know if I'm wrong). Since the GDP in the chart is in constant year 2000 dollars, it can't be "GDP if it had kept up with inflation". One possibility is it may mean "How much the economy has to grow to keep the unemployment rate from falling". An explanation of this term should be provided for those of us who are non-specialists.Dulcimer music 04:29, 3 January 2013 (UTC)JDefauw — Preceding unsigned comment added by JDefauw (talkcontribs)
References

Wrong name used in the Spain chapter[edit]

The prime minister of Spain from 1923 to 1930 was Miguel Primo de Rivera, not Jose Primo de Rivera. Please change! — Preceding unsigned comment added by Moshes elizaveta (talkcontribs) 11:23, 9 May 2013 (UTC)

Determining the start of the Great Depression[edit]

This section should emphasize that the Great Depression has a recognizable event that people generally point to as the start: the Wall Street Crash of 1929. (See "The Great Depression", New York Times.) Prior to that date there were various indicators of global financial instability:

  • 1928, first quarter, German recession "Great Depression", Britannica.com
  • March 25, 1929, the US mini crash
  • June 1929, the beginning of a US recession "Great Depression", Britannica.com
  • September 20, 1929, the London crash
  • October 24, 1929, Black Thursday in NYC
  • October 28, 1929, Black Monday in NYC
  • October 29, 1929, Black Tuesday in NYC
  • Early 1930: stringent financial measures adopted by the Fed rather than expansionary
  • June 1930: increased protectionist trade tariffs by US followed by retaliatory tariffs by others

Various authors have variously defined the start:

  • Professor Erich Rauchway of UC Davis says in The Great Depression and the New Deal: A Very Short Introduction, page 3:
    • "The Great Depression began in the late 1920s, not necessarily with the Great Crash of 1929 but around that time..."
  • Professor Hamilton Cravens of Iowa State U and OAH says in Great Depression: People and Perspectives, page xi:
    • "Most American historians would agree that the Great Depression spanned the years between the stock market crash of October 1929 and the Japanese attack on the U.S. Naval fleet at Pearl Harbor... The stock market crash of 1929 triggered the Great Depression."
  • Professor Robert S. McElvaine of Milsaps College says in The Great Depression: America 1929–1941 that there are various explanations of what started the Great Depression, varying by economic background of the observer. He says economist Professor Michael Bordo of Rutgers looks at "the contraction phase" as extending from August 1929 to March 1933. McElvaine dismisses political writer Amity Shlaes who contradicts the standard history of the Great Depression starting at the NY stock market crash. Throughout his book, McElvaine emphasizes the October 1929 crash as the defining moment of the start of the Great Depression.
  • In the The Great Depression in America: A Cultural Encyclopedia, the editors repeatedly trace the Great Depression to its start in late October 1929, the Wall Street Crash. Many entries are described in relation to the timing of the crash. They write that the Great Depression is "the subject of almost constant study since that Tuesday in October 1929 when the stock market crashed, signaling the end of one era and the onset of something new and unknown..."
  • History writer Steve Wiegand writes in Lessons from the Great Depression For Dummies, page 45:
    • The Great Depression may have started with the stock market crash in October 1929 (see Chapter 3) but the crash didn't shoulder all the blame."
  • Keynesian economist John Kenneth Galbraith wrote in 1955 in The Great Crash of 1929, page 168: "After the Great Crash came the Great Depression which lasted, with varying severity, for ten years." Galbraith says on page 71 that a group of conservative Harvard economists of the day forecast a recession "though assuredly not a depression" which was due some time in early or mid 1929. Galbraith writes that "by the summer of 1929, the setback had not appeared, at least in any very visible form", which made the economists admit their error. Galbraith describes how in March 1929 Paul Warburg warned against "a general depression involving the entire country" if stronger Federal Reserve restrictions were not set in place to stop "unrestrained speculation" in the market. On page 88 Galbraith says "According to the accepted view of events, by the autumn of 1929 the economy was well into a depression." He describes how industrial and factory production reached a peak in June 1929, but by October various indices were down. He writes "Until September or October of 1929 the decline in economic activity was very modest."
  • German historian Dietmar Rothermund says in The Global Impact of the Great Depression 1929–1939, page 48, that various financial risk factors had been building a shaky bubble, "but they were accentuated by the sudden crash of the stock market in October 1929 which undermined the world credit system and thus was the proximate cause of the depression."
  • Economics professor Nicholas Crafts of the University of Warwick writes in The Great Depression of the 1930s: Lessons for Today, page 189, that Galbraith traces the start of the Great Depression to the Wall Street Crash. Crafts notes that Milton Friedman and Anna Schwartz challenged this "prevailing Keynesian view" in 1963. Crafts characterizes this debate as being about "illiquidity versus insolvency", with Friedman and Schwartz carrying the "illiquidity shock" side. Crafts says that the debate hinges on whether the observer uses aggregate or disaggregate data, with aggregate data favoring the illiquidity argument. Crafts thinks that the Friedman and Schwartz version "may well prevail." Crafts writes on page 157 that "it is quite common still for it to be asserted that the Great Depression was caused by the stock market crash of October 1929." He says on page 48 that he himself disagrees with this assessment, that "the Wall Street Crash played, at most, a minor role in the downturn". He blames instead stringent monetary policy and banking crises.
  • Economist Lionel Robbins, Baron Robbins, wrote in 1933 in The Great Depression that "the onset of the present crisis may perhaps be dated from the autumn of 1929." He goes on to describe economic factors that had been building since 1914.
  • Historian James S. Olson wrote in the Historical Dictionary of the Great Depression, 1929–1940, pages 135–136, that the US stock market "declined modestly in September [1929], but few traders or investors seemed concerned." He says the main panic came in late October. He writes: "Although economic historians do not look back on the Great Crash of 1929 as the sole cause of the Great Depression, they identify it as an important contributing factor..."
  • Economist Christian Saint-Étienne argues that the Great Depression would not have happened if the Federal Reserve had followed an expansionary policy in the months following the Wall Street Crash. The Great Depression, 1929–1938: Lessons for the 1980s, page 32. Saint-Étienne notes that NBER shows a peak of economic activity in August 1929 followed by a trough in March 1933. He says the available money in the US stayed relatively unchanged from January 1928 to April 1930, and only by March 1931 was the lack of money felt. Saint-Étienne traces the Great Depression to various tight-fisted government policies and tariffs starting in June 1930.
  • Economist historian Charles P. Kindleberger wrote in 1989 in The World in Depression, 1929–1939 that he disagrees with Friedman's 1963 analysis. Kindleberger says that the Great Depression was caused by a combination of economic factors which built a speculative bubble of unwarranted optimism in the US stock market which had lost touch with the reality of various downturns in business and production. He writes that if there is any stock market crash which can be blamed for causing the Great Depression, it is the US Wall Street Crash of October 1929. He writes on page 104 that the trading mania in the US stock market "may have contributed to a weakening of the business position, but the crash was less a cause of the depression than a signal of the need to pause and regroup."
  • Professors Thomas E. Hall and J. David Ferguson of Miami University of Ohia write in The Great Depression: An International Disaster of Perverse Economic Policies that there are several reasons to view the Wall Street Crash as having a strong causative effect on the subsequent Great Depression. 1) A decline of $20 billion in stock value hurt household budgets across the US. 2) Existing capital was reduced in value relative to new capital goods, which depressed industrial development. 3) The most important consequence of the crash was a massive reduction in market confidence—a psychological factor.


I hold that general mainstream thought accepts the Wall Street Crash of 1929 as the psychological turning point which signaled the end of the Roaring 20s and start of the Great Depression. Binksternet (talk) 03:49, 24 August 2013 (UTC)

I agree with Binksternet. The NBER series says that the HIGH POINT was in August 1929, with September and October indices slightly lower. That slight decline is not enough for a historian to date the GREAT depression. Something much more powerful was needed and the great majority of experts point to the stock market crash in October. Note that the slight slippage found in data that NBER later compiled was invisible at the time but the stock market was news worldwide and immediately affected calculations and confidence about the future. Rjensen (talk) 04:57, 24 August 2013 (UTC)

Why do their have to be ideological crazies who troll on Wikipedia? Look, recessions start at declines from peaks--it's like car crashes, that start immediately following the last moment that there WASN'T an impact, not when the driver psychologically felt that he was in a crash. (For instance, NBER dates the start of the last recession at much earlier than what the public felt was a recession.) The official authority on US recessions dates the recession as starting in August. Output began declining in August. That's why economists consider the recession to have started in August. My entry notes the difference between what popular perception is and what economists say; your reverted version claims economists believe what the popular notion is, even though that's obviously false and your own quotes indicate that's false.

Still, you know what? Stay with your crazy little false story. Hey, what's misleading the public? Personally, I don't have the time or inclination to fight little ideological crazies. — Preceding unsigned comment added by Tfirey (talkcontribs) 20:26, 29 August 2013 (UTC)

Imagine a situation in which an agreed-upon peak indicator hit its top point several years before a depression, then generally leveled off at a comfortably profitable place for many months before starting a big slide downward. In this hypothetical situation, that top point would not be considered the start of a depression, because following the top point was many months of good economic times. Also, after the downward slide hits bottom and begins to trend upward, people would still be experiencing difficult times, so a depression does not stop the moment the bottom is reached. This shows the fallacy of dating the Great Depression from only this or that economic indicator, and these factors are argued by economists. The Great Depression is larger than that; it is made up of many economic and also psychological factors. Binksternet (talk) 21:06, 29 August 2013 (UTC)
Binksternet says it well. The "car crash" that Tfirey is concerned with happened in late october 1929 when a lot of metal got bent out of shape....not in September when the first skid marks appeared Rjensen (talk) 01:04, 30 August 2013 (UTC)

turning point and recovery[edit]

in the second paragraph, either a clear distinction needs to be made between the "common view" and "consensus view". does common mean "majority view"? if so it comes close to contradicting itself. look: do most economists think the new deal was instrumental in recovery, or is the opposite the case. it's not hard to be clear here. in science (or academia) "consensus" is hard often hard to come by and we settle for "most commonly held position". saying there's no consensus on a topic in economics is redundant at best, confusing/misleading at worst. 86.1.70.66 (talk) 03:37, 7 October 2013 (UTC)

Section on Other depressions[edit]

This section is lacking and does not reference what was originally called the "Great Depression" and now is called the Long Depression. This Depression hit Europe in the late 1800's, and was long and severe there, but mostly missed the US.

Historians seem more then a bit confused on what happened in the US during this period. Some seem to think it was a period of slow growth full of panics, others that is was the most exceptional period of growth in US history. The US passed England as the #1 economic power during this time frame which supports the fast growth camp.71.174.141.198 (talk) 22:06, 17 December 2013 (UTC)

i noticed that the beginning sentence says the depression was the decade following WWII i think the author meant WWI considering WWII began during the Great Depression. — Preceding unsigned comment added by 75.76.122.90 (talk) 02:20, 17 April 2014 (UTC)

it was the decade BEFORE world war two (which started in 1939). Rjensen (talk) 03:48, 17 April 2014 (UTC)

UK - 'In the less industrial Midlands and Southern England'[edit]

The Midlands was a heavily industrialized area at the time. I think the key point was that it was industrially more diverse than the North and had 'modern industries', such as car manufacturing. Norvo (talk) 23:33, 4 May 2014 (UTC)