The Depression You've Never Heard of

I have, recently reading the wonderful Tom Woods' Meltdown. It's the years 1920-21. Sharp, painful downturn, a depression.

Why it didn't last is found in the response of the Fed and feds: the opposite of what they're doing now.

Bob Murphy writes for The Freeman about the years 1920-21:

Here the government and Fed did the exact opposite of what the experts now recommend. We have just about the closest thing to a controlled experiment in macroeconomics that one could desire. To repeat, it's not that the government boosted the budget at a slower rate, or that the Fed provided a tad less liquidity. On the contrary, the government slashed its budget tremendously, and the Fed hiked rates to record highs.

The present economy is in rough shape. I work at UPS. I load the trucks, four of 'em anyway, that go out. I have a unique feel on the pulse of the economy. And in ten years of working there I have never seen such a crappy Christmas.

Two years ago I'd be having to show up at 1:30 am. Now, it's 3 am. I mean I'm not a smart engineer like Chan, but even I can do the math.