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To: TheStockFairy who wrote (87703)	3/29/2001 5:11:18 PM
From: Ilaine	Respond to of 436258

>>1. Unequal Distribution of Wealth and Income << This doesn't explain 1) why the Great Depression happened, 2) why it endured for so very long, or 3) what triggered it. It's clear that the trigger was NOT the stock market crash. At the worst, 25% of Americans were out of work. Unless you've taken the time to look at what happened to the economy, you can't imagine how bad it was. >>2. Unequal Distribution of Corporate Power << Consolidations always happen in mature industries. Again, this doesn't explain the incredible depth or duration of the Great Depression. >>3. Bad Banking Structure<< Bank crashes have come and gone, but nothing like this. There was actually a refusal to assist banks stay solvent which has to do with philosophical differences about what is money and what is good credit. >>4. Foreign Balance of Payments<< This is certainly part of it - which is why I mentioned the Bank for International Settlements opening up shop in April, 1930. But the US wasn't pushing either reparations OR repayment. The French were the ones who pushed the Germans by invading the Ruhr and going house to house looking for gold. >>5. Limited or Poor State of Economic Intelligence<< Most economists believed in laissez-faire but the US government did NOT practice laissez-faire. The tariffs were established by Republican congresses under Republican administrations. >>6. Decrease in Money Supply<< This certainly happened. >>7. International Factors The international monetary system of the time (the gold exchange standard) was a fixed-rate system.<< Not exactly - then as now people played arbitrage games, and so did governments. The world economy was going along pretty well, with some ups and downs but nothing out of the ordinary. In 1930 the bottom fell out like Wiley Coyote walking off a cliff.