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  • Domestic Production Was Low on Random Things Everyone Thinks About The Great Depression That Are Totally Wrong

    (#5) Domestic Production Was Low

    At first, yes, domestic production did slump. Between 1930 and 1933, production at factories, mines, and utilities fell by more than half. After the initial drop, however, production steadily began increasing, reaching pre-1929 levels in 1937.

    While the massive crop failures of the Dust Bowl did cause substantial hardships to many Americans, they only came after a massive crash in the price of agricultural goods. Thanks largely to the Smoot-Hawley Tariff and ensuing trade war, export markets were essentially closed to US agricultural goods, creating a domestic surplus. The price of a bushel of wheat fell from $1 in 1929 to 30 cents in 1932.

    Actually, there was so much farming that the US Federal government was actively destroying crops. Under the Agriculture Adjustment Act, the US government was buying up entire fields of viable crops to plow under and slaughtering millions of completely healthy livestock. This was an attempt to curb the supply to better match it with the artificially lowered demand and, in turn, increase prices. The legacy of this program still exists today in the form of the Conservation Reserve Program; in certain places, people are still being paid by the government to not grow crops.

  • Everyone Was Poor During The Depression on Random Things Everyone Thinks About The Great Depression That Are Totally Wrong

    (#9) Everyone Was Poor During The Depression

    While the Depression did have a wide impact, up to 40% of Americans faced no real economic hardship. Some people even managed to get rich during the time period. This period was also considered the Golden Age of Hollywood – when the studio system was at its zenith. Such classics as Dracula, Frankenstein, and Gone With the Wind were all filmed during the 1930s.

  • Banks Closed Because They Didn't Have Access To Credit on Random Things Everyone Thinks About The Great Depression That Are Totally Wrong

    (#8) Banks Closed Because They Didn't Have Access To Credit

    On the contrary, the Federal Reserve was created in 1913 for the explicit purpose of being the lender of last resort when transactions between banks dried up. So why did so many banks close between 1929 and 1932?

    At the time, many states in the US had unit banking laws. Basically, these made it illegal for large banks to open branch locations in certain places. Unit banks, on the other hand, are small banks that operate independently, serving a single specific location. While branch banks are backed (and ultimately controlled) by large financial institutions, unit banks are not.

    The McFadden Act of 1927 explicitly banned interstate branch banking. Without access to a widely diversified financial backer, unit banks are much more sensitive to financial downturns. The widespread reliance on unit banking (by law) in the US was a major reason so many banks closed. Analysis has found that states that allowed branch banking saw fewer bank failures during the Depression. Further, Canada, which had no laws against branch banking, didn't see a single bank closure.

  • Herbert Hoover Was A Pro-Free Market, Laissez-Faire President on Random Things Everyone Thinks About The Great Depression That Are Totally Wrong

    (#4) Herbert Hoover Was A Pro-Free Market, Laissez-Faire President

    The myth that Herbert Hoover was a "sit back and let the economy fix itself" president has no basis in reality. In addition to his Smoot-Hawley Tariff of 1930, Hoover engaged in a multitude of economic interventionist policies. The Hoover Dam is a literal monument to Hoover's public works projects, which also included the Golden Gate Bridge.

    Hoover also raised the top income tax level from 25% to 63% and the lowest from 1.1% to 4% in 1932. He pressured business leaders to maintain wages (despite falling consumer prices), effectively pricing many Americans out of jobs. Hoover doubled government spending in only four years. It was so extreme that even FDR criticized Hoover as “the greatest spending administration in peacetime in all of history.”

  • The New Deal Policies Of FDR Ended The Depression on Random Things Everyone Thinks About The Great Depression That Are Totally Wrong

    (#12) The New Deal Policies Of FDR Ended The Depression

    At best, the New Deal policies were ineffective, and at worst they actually lengthened the Depression. In reality, it was World War II that ended the Great Depression (in a way). It directly ended the unemployment problem with millions of Americans landing "gainful" employment as enlisted men. Millions more were drawn into service to produce goods for the singular goal of the war effort. The war also broke up the protectionist policies that had dominated the globe in the 1930s. The US was trading internationally again, at least with its allies.

    Some argue, however, that it would not be until the end of WWII that the Great Depression could really be considered over. During the war, rationing was the norm, and even with the increased wartime production, the standard of living in the US was still at Depression levels. Economic activity was still low. When the war ended Truman rolled back many of FDRs policies, lowered the tax burden, and reduced government spending from 42 percent of GDP to 14 percent. The US also became a major industrial center for the world, mostly because it wasn't bombed to bejesus and back like everywhere else. It was this postwar boom that finally brought back economic prosperity.

  • The Depression Was Limited To The US on Random Things Everyone Thinks About The Great Depression That Are Totally Wrong

    (#2) The Depression Was Limited To The US

    While the Great Depression started in the US, it quickly spread outward and became a global event. It gave rise to Fascism and National Socialism in Europe, and, in many ways, it set the stage for WWII. The protectionist policies that began in the US quickly spread around the world, causing international trade to grind to a virtual standstill.

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The Great Depression refers to the serious economic crises that originated in the United States from 1929 to 1933 and spread to the entire capitalist world, including the United States, Britain, France, Germany, and Japan, and other capitalist countries. The Great Depression is the longest-lasting economic crisis in modern society, which caused massive unemployment and serious social problems, and finally led to the outbreak of World War II.

The Great Depression was not only a disaster for the stock market but also triggered a chain reaction in the economy of the world. The random tool explained 12 wrong things about the Great Depression that most people know.

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