"The Great Depression was not caused by laissez faire but by the actions of well-intended politicians and bureaucrats. The Federal Reserve System, after all, was not created in response to the Great Depression, but in 1913. Soon thereafter it began experimenting with its awesome powers, expanding the money supply during the roaring ‘20s, propping up the pound sterling in London, extending credit so Europeans could buy American agricultural products. All the while, Congress was becoming more and more protectionist. When the Fed reversed policies in 1929 and actually shrunk the money supply by a third over the next three years and Congress culminated its protectionist tendencies with the Smoot-Hawley tariff, the collapse was underway. The fact that Hoover then raised taxes and Roosevelt kept wages artificially high guaranteed the massive unemployment that marked the 1930s. Government caused and exacerbated the Great Depression."
by:
Edward H. Crane
Founder and president of the Cato Institute
Source:
April 6, 1995, at a meeting of the Philanthropy Roundtable
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Reader comments about this quote:
Yes, Mr Crane, and who do you think manipulates these governing factors - if you wish to know the real reason then go to your Cato Institute and discuss who the real power comes from. Then rewrite the above. I give him one star for being on the right train but wrong track.
 -- Robken     
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     -- Byron, Fort Collins, CO      
    Cato institute, nuff said? It really is just an arm of wealthy and manipulative Koch brothers clan. The clan and its follers that revel in chaos and stand ready to pick up the pieces. Just plain and simple evil people who wish to make the poor miserable so that they can further enrich self.
     -- Waffler, Smith     
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    Robken, are you sugessting that the Cato Institute controls America ? If not, please enlighten us as to who's in charge.
     -- jim k, Austin, Tx     
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    Waff, as usual you make no sense, but that's pretty normal for Liberals. What on earth does this quote have to do with the Cato Institute? Your Komrad buddy Anonymous brought that up and he made no sense either. Do you two get your marching orders from the same commie cell ?
     -- jim k, Austin, Tx     
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    ALL of our problems are caused by the Federal Reserve and the spineless government that works for it. End the Fed.
     -- J Carlton, Calgary     
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    Dr. Ron Paul, who quoted above, is trying to audit the Fed. Why is the Fed resisting?
     -- cal, lewisville, tx     
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    Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. Jesus Christ wan't big on debasing currency either.
     -- Justin, Elkland     
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    LOL, what a riot, it seems you can just make this stuff up out of thin air... as this quote is from the founder of the Cato Institute, it can clearly be related to Cato, and to not see that is in synch with the basis of those very views and "analysis" of Cato: based in imagination rather than reality.
     -- Anonymous, Reston, VA, US     
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     -- Wayne, Naples      
    Explain "reality" Reston. I'd be curious as to just what you think that is...
     -- J Carlton, Calgary     
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    As far as the quote is concerned, it doesn't matter who said it, it is absolutely true. Why on Earth do Waffler and Reston defend the Federal Reserve?! Aren't you guys anti-corporation? The entire economic collapse is due to the ability to create money out of nothing by banks as per the Federal Reserve Act and then loan it at interest to corporations, banks, and the public. All these 'derivatives' are simply 'creative debt' instruments -- debt futures, if you will. It creates HUGE bubbles that MUST burst. Investors profit immensely by betting against the dollar now -- in fact, while America is going to hell in a hand-basket, the likes of Buffet, Soros and Goldman Sachs will get even richer by betting the dollar will go down against other currencies -- DUH! They help make it happen. The problem with libs is they ignore the real causes -- I don't know why -- I suppose they believe they have the moral high ground because they say they want to take care of the poor -- but the fact remains that the poor are kept poor by this system, and the middle class is destroyed by it. My guess is that most on this site are middle class -- and that Waffler and Reston are government pensioners.
     -- E Archer, NYC     
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    Why am I not surprised that the government was at fault for the depression?
     -- Johann Hollar, St. Paul     
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    The religiously fascist government and their puppeteers are the complete cause of the current and worsening crash. The representative republic, limited by the Constitution is long since dead, and the malignant statist theocracy infesting this land, with its / their malefactor patrons are a destructive blight on humanity. (and that's as much as I can sugar coat it)
     -- Mike, Norwalk     
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    OK, so as part of the causation I have to include the statist theocracy's patrons.
     -- Mike, Norwalk     
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    A rendering of reality that is reproachable only in its characterizations of the intentions of politicians and bureaucrats.
     -- Patrick Henry, Red Hill     
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    E Archer's guess, most on this site are middle class, Spot On for Independents who must Crunch the Numbers very well. again the source of the back bone in America. Plundering of America is nothing new. Food stuffs, agricultural products. Crane was being nice, stating " well intended politicians." Washington warned so long ago.
     -- Ronw13, Oregon     
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    It has been difficult to realized the reason of the 1929 depression.
    Crane hit the head of the nail.
     -- luis, panama     
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