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Feb 05

The Forgotten Depression - 1921: The Crash That Cured Itself

Starting with the Great Depression, virtually all major economic crises have been met with expansive government policies. This wasn’t always the case. In The Forgotten Depression, James Grant tells the story of America’s last governmentally untreated depression – relatively brief and self-correcting, it gave way to the Roaring Twenties. In 1920-21, 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 in 1921. In 1929 it was whole different story. Grant offers the experience of the earlier depression for lessons for today and the future. In doing so, he provides not only a much-needed historical perspective, but also argues that the enterprise system is more resilient than even its friends give it credit for being.

James Grant is the founder of Grant’s Interest Rate Observer, a leading journal on financial markets, which he has published since 1983. He began his journalism career at the Baltimore Sun and later joined the staff of Barron’s where he originated the “Current Yield” column. His work has been featured in Financial Times, The Wall Street Journal, and Foreign Affairs. He has also appeared on 60 Minutes, Jim Lehrer’s News Hour, and CBS Evening News.

More About the Speakers

James Grant
Founder, Grant’s Interest Rate Observer

Hosted By

Norbert J. Michel, Ph.D. Norbert J. Michel, Ph.D.

Research Fellow in Financial Regulations Read More