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(President of The CATO Institute; libertarian) - The Great Depression was not caused by laissez faire but by the actions of wellintended
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 (more quotes by Edward H. Crane or books by/about Edward H. Crane) |
| (1944-) American libertarian, co-founder of the Cato Institute |
Source: | April 6, 1995, at a meeting of the Philanthropy Roundtable |
Categories: | Banking, Economics, Fed, Money, Politics, Taxation |
Rating: |    |