You know, CB, I don't find Christina Romer's "excellent treatment of the multiple causes of the Great Depression" as persuasive as you appear to. For the most part, it is a recitation of the sequence of policy and monetary mistakes that exacerbated an economic process that was already in motion.
The closest thing I can find to a statement of cause for the Great Depression in the reference you cited is this: "The fundamental cause of the Great Depression in the United States was a decline in spending (sometimes referred to as aggregate demand), which led to a decline in production as manufacturers and merchandisers noticed an unintended rise in inventories. The sources of the contraction in spending in the United States varied over the course of the Depression, but they cumulated into a monumental decline in aggregate demand. The American decline was transmitted to the rest of the world largely through the gold standard. However, a variety of other factors also influenced the downturn in other countries."
This is motherhood and apple pie as we used to say at GE, but no real explanation. So, "The fundamental cause of the Great Depression in the United States was a decline in spending.......which led to a decline in production..." Well...duh!
I am not going to try and provide quantitative proof of the immigration argument here, but on a qualitative level, here's the smoking gun: uscis.gov
This is a pdf file - you need to reach page 3 to see the chart of US immigration by year, 1900 to 2001. Note the huge wave of US immigration from 1900 through 1914, totaling approximately 12.5 million people, and also the yawning chasm in immigration from 1914 to 1919, when immigration totaled something over 1 million. This little piece of data is, I contend, a primary driver, if not the root cause of the Great Depression, a glaringly obvious fact that is widely ignored by mainstream economic historians. If this demographic gap overlaid an existing generational narrowing of the population pyramid, which in fact I believe it did, then the gold standard, Smoot-Hawley and all that other junk are superfluous, just after-the-fact pile-ons to a disastrous economic slump caused by Christina Romer's "decline in spending...which led to a decline in production..." that was caused by a large secular decline in the number of adults in the US population in their peak spending years.
This is why I am afraid, very, very afraid, of what may happen post-2010. |
