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To: LLCF who wrote (89731)	4/4/2001 10:34:58 AM
From: Ilaine	Read Replies (2) \| Respond to of 436258

There is no question that the Fed and the Hoover administration deliberately pursued deflationary policies in the early 1930's in order to "wring out" what they perceived as excesses caused by speculation. Secretary of the Treasury Andrew Mellon's policy was to "liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate." They thought that cutting interest rates would encourage non-speculative borrowing, but let the Bank of the United States (a very large private bank based in New York) fail in 1930 because they thought its asset portfolio was too speculative. The economists cited in the article, Eichengreen and Temin, are very good. Whatever happens to us will be different. Maybe better, maybe worse, but different. I should probably mention that the consensus among economists today (not Austrian economists) is that the Great Crash did not cause the Great Depression.