The government created the great depression

Monetary It is almost a clear cut fact the government has terrible monetary policies from 1929-1937. [1] Now people may think I will argue they did to much, but on the contrary they did to little (well I am just arguing this way, I would always argue differently, but lets take they did to little), they did not prevent or help the bank failures. Also one of the reasons they did nothing was due to the gold standard they held in place from 1929-1933. The monetary policy in this time was atrocious and was a huge cause in other areas of failure. The government created a boom in the stock market, people went to banks, borrowed money, people getting rich. But this created an inevitable bubble that would ruin the economy and create the thing we know as the great depression. [2] A strong US dollar and a weak pound caused US inflation rates to skyrocket and deflation in the UK markets, which helped create the rise in stock prices and real estate. [3] Now, how did the boom the government help create bust, and was it the governments fault? It was, in fact the governments fault. The reason we had such a big bust was not because of free market on the craz, but rather the boom which was artificially pushed by the government. The boom was artificially being fueled longer then it should have been by inflationary credit. [4]Once the depression was in full swing, the reserve decided to take the money reserve and shrink it. This government policy helped create, and possibly was the creator, of the bank scare, the thing many say created the great depression. [5]So now as I have proven the federal reserve was a real problem in creating and prolonging the problem, but did they help create the great depression in other ways? Yes. Fiscal policyThis is always an issue within current politics and in the ones that created the GD (my new abbreviation). I will start with the hoover administration, a man credited to the downfall of the economy. He did in fact have many detrimental policies in this area. He created a very poor atmosphere for imports, and contributed to a 66% decline in them! [1] He also raised taxes which did not help the problem. [5] And then he had a poor wage policy, which was to raise the wages while he fought the unions. This wage policies had notable effects, and notable in a bad way. [6] Well technically he created stable wages but the federal reserve policies actually made it so the stable wage was not stable, and it actually increased wages a large amount. [6] These wages imposed by hoover actually lowered factory productivity and the hours of those people working, that decreased by about 40%, and industry productivity fell about 35%. [6] These GOVERNMENT policies created the wage hikes which hurt the economy. Furthermore he had a very pro union policy, forcing many workers to work at union wages in the early 1930s. [7] This increased the costs of labor significantly. Another law gave unions more power, mandating all to work at union wages, and non union contracts where null and void in federal courts. This forced higher wages which decreased productivity and raised unemployment. The artificial [high] wages and the tariffs imposed by hoover helped destroy the economy, the GD. By the government. No surprise at all. ___[1] . http://www2.warwick.ac.uk...[2] . http://mises.org... [3] Ibid [4] . http://mises.org...[5] . http://www.econlib.org... [6] . http://ic.ucsc.edu...[7] . http://www.cato.org... ___Government started the great depression.