Top Three Myths about the Great Depression and the New Deal


by definition military production output is not real wealth walls destroy wealth rather than creating it there are a number of myths about the Great Depression which are very popular the first is that Herbert Hoover was to do nothing less a fair president who simply allowed unemployment to rise and was responsible for a total economic collapse in fact this is the opposite of the truth Hoover was an extremely interventionist president and one of the main reasons why the Great Depression became so severe was because of the active and interventionist policy he followed in particular his refusal to allow asset values and wages to find a natural clearing level the second myth is that the New Deal saved American capitalism and brought the Great Depression to an end the historians generally do not believe this anymore the fact is that in most parts of the world the Great Depression began to end much much earlier and much more quickly than it did in the United States in Great Britain the Great Depression was over by 1933 and Britain in fact enjoyed very rapid economic growth of 1931 onwards in the United States by contrast not only does the Great Depression go on for more than a decade it in fact actually gets worse and by 1937 the level of unemployment in the United States is as high as it had been in 1932 but in addition the federal government has built up an enormous debt the third common myth is that what eventually ended the Depression and saved the economy was world war ii by definition military production output is not real wealth wars destroy wealth rather than creating it in fact if you look at the figures for American economic activity and you strip out the war effects as people like Robert Higgs have shown what you can only conclude is that in fact the Great Depression does not really end until 1947 or 1948 and that the war simply conceals or covers up the continuing low level of real wealth creating economic activity in the United States you [Music]

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  1. that he did. As well as nationalize the railroads and telegraph lines, instituting the first national draft, and suspending the writ of habeus corpus. Not the president of the people that biased history tries to create.

  2. Alright, but I counter that WWII did end the depression by destroying the industrial centers of Europe and Asia, allowing for the untouched American industrial centers to shift production from military goods to more "commercial" goods. Which also explains why Communist Russia fell, because they didn't shift their ammunition case factories to soda can factories.

  3. Hoover was a laissez-faire president. He didn't step in during the great depression and allowed a number of banks and other American companies to fail putting a number of Americans out of work. The new deal and its programs slowed the growth of the great depression by putting more Americans into work at the cost of the government, this was to get things moving again. When we entered WWII our economy became centralized which boosted our military and economic production. It was what war let us do.

  4. Moron! WWII sported a centralized government controlled economy, after the war ended and the centralized economy was lifted there was a boom. The New deal slowed our decent. Why not take a history class instead of letting these morons sell you their one sided bullshit.

  5. No, war is you doing a job fighting/being trained to fight in a battle. During WWII Americans were being paid to fight against Nazi Germany, and Imperialistic Japan. Its amazing how stupid you people can be.

  6. Communist Russia fell because of the rebellions, also our centralized economy gave us an even larger boost following WWII.

  7. DO NOT LISTEN TO HIM! That is a twisted history, a defilement of our history. FDR set in play the New Deal which aimed to help the lower class, this SLOWED the great depression by giving American's jobs. Though it wasn't until WWII hit that it came to the end. During WWII we shifted from Capitalism to a centralized economy. After the war ended we came out on top along with Russia both of us having taken the least damage. We had an economic advantage meaning everyone bought from us. -Continued-

  8. Everyone buying from the US and Russia accelerated our rising out of the great depression, this leads into the Cold war which divides Europe in half. We were out of the Great depression by the end of WWII.

  9. The new deal slowed it, we switched to a centralized economy during WWII, after the war ended we were the only country other than Russia with a strong production, everyone bought from us or joined the new communist Russia. Basically it was a combination of those things.

  10. Wow I've never seen one individual vomit so much crap in one video. The Us did not have a centrally run economic from its inception untill WW2 right, yet it was the richest nation the world had ever seen.

    Hoover was a laissez-faire president? This alone proves that you have not studied anything. Ever heard of the davis bacon act, hoover trying to prop up wages?

    The US had recessions prior to the 1930s but none lasted as long as this one, can you guess what was the difference?

  11. The economy got even worst in the late 30s, the average unemployment rate during this time was in the high teens. The New Deal turned a recession into a depression.

    And sending the most productive members of society to build tanks and bomb in order to cause destruction else where will not bring economic growth.

    If that were the case then any poor nation can become wealthy by just going to war.

  12. Booms and bust cycles occurs when a central bank inflates the money supply and artificially lowers interest rates. this gives the false impression that there are more savings in the economy then there actually is…

    The US had to inflate in order to pay for WW1 (inflating is always more politically viable than raising taxes) and in 1920 we had a bust, Harding did very little and that depression ended quickly.

    During the 1920 the Fed continued to inflate, until the bust in 1929.

  13. Hoover, unlike Harding, did intervene. You can just google "hoover intervention market crash" and you will find tons of material. FDR just continued and took it to an even greater extent, prolonging the longest recession in the US history.

  14. If war creates wealth like WW2 (which is something most liberals agree to) then why were they accusing Bush of putting us in a recession because of his war in Iraq and afghan?

  15. I believe you are making a fundamental mistake here. Direct involvement in war is not beneficial to the economy; it truly is a drain on resources. We were already one of the (if not the) biggest weapons manufacturers in WWI when we sold weapons to every power involved. This of course stopped, however, when we actually decided to fight.

  16. Lol, this video reminded me about how bad my history teacher was and how, during the unit about WWII, was trying to tell the whole class these three myths, or "facts" as she would refer to them as

  17. Rather than attacking the sender, please explain what is wrong with the message? Are the facts wrong? Is the analysis faulty? If you just attack the sender, I suspect the message is true.

  18. The Great Recession was caused by government housing policy, an absurd belief in increasing real estate value and unfortunate monetary policy. The war and/or fiscal policies were irrelevant in the recession.

  19. Why? because I hate youtube soapboxes. They promote ideological circle jerks and misinformation more than they actually inform anyone. No sources are cited in this video, furthermore, Do you honestly believe military production can't be tied to wealth? Especially from nations who are in the business of selling military hardware? lol

  20. wealth is not just measured in government revenue but also the income of the population. WW2 lead to the employment of millions in the USA and industrial expansion.

  21. Okay I'm sorry I just can't ignore that, "Britain's economic depression was over by 1933 and enjoyed rapid economic growth from 1931 onward".
    Orwells road to Wigan Pier was written in 1936, this book documented his investigations of the bleak living conditions amongst the working class in the north of England during the depression. Also the The Jarrow March which was a protest march against unemployment and extreme poverty suffered in North East England during the Great Depression was in 1936. 
    So please don't try and tell me the depression was over in Britain by 1931, it is a lie sir, not only that it is a vile beastly lie, deliberately ignoring the facts and sufferings of millions in order to fit a skewered economic theory based solely on cherry picking and ignorance…  

  22. In a other words it was free market capitalism that had been attacked by the New Deal which brought an end to the Depression in the U.S. Not the New Deal itself.

  23. The great depression only ended quicker around the world quicker is because the U.S was helping the country's in world war 2 than helping our self now the other country's are not helping us and never will.

  24. War has a funny habit of spreading out wealth as well, assuming the enemy steals technology from the otherside and acquires knowledge from reverse-engineering. One of the reasons why the military is unmanning many vehicles and such is to decrease the casualty rate of live personnel in cases of thievery.

  25. I wish he had gotten more specific or referenced actually data or research. Even some links in the description would have helped. I can't just take his word for it….

  26. He's right about Hoover being interventionist (by the previous standards of US presidents) and that the New Deal did not end the depression. However, the statement that the UK's great depression was basically over by 1933 is completely false. Northern England and Wales didn't recover during the decade and what recovery that did happen was due to rearmament to fight the Nazis.

     Of course, the real problem with this video comes right at the beginning. Real wealth…what the hell is this guy talking about?

    Capitalism 101: in a free market, the value of goods is determined by what people will pay for them. So, how do you know that the effects of war will be to decrease wealth? Gibson guitars sells worn guitars for more than some of their non-worn guitars; if he's right, that shouldn't be possible. 

  27. Ok seriously.  First off Hoover WAS laissez-faire UNTIL the economy collapsed! Then he did do government spending projects, like the Hoover Dam, only BECAUSE the economy collapsed. Regardless it is a complete myth that the POTUS controls the economy. Hoover's laissez-faire governing was only a small snowball in a huge avalanche that caused the depression. Secondly after the New Deal was passed unemployment fell from over 25% to 12% in 3 years!  Though it is true the unemployment rate jumped back up to about 20% in 1937 (mainly because the new deal projects ran out off money/Hitler and Japan kind of screwing w/ the world economy by invading China and getting ready for WWII).  Government passed second New Deal and unemployment fell again.

  28. Except that this is blatantly outright wrong.
    For one, he's basically using circular logic by saying "assume military production destroys wealth" then saying "The war didn't end the great depression because war destroys wealth" without proving it other than his initial assumption.

    Modern military production is not real wealth because we're buying outsourced firearms (nearly half of the US arsenal now comes from Fabrique Nationale, a Belgian company)
    Second, we are BUYING most of our equipment. During the late 1930's to early 1940s, the US was actually PRODUCING the weapons and then SELLING them to other countries. Russia used a ton of our vehicles before they started mass production of T-34's. Production of things to sell to other countries skyrocketed because we needed to make it all.

    Modern warfare production is utterly different and even though this guy has a Ph.D (if he does). I can tell you this is historical revisionist bullshit and anyone who's studied WWII extensively can tell you just how much the massive increase in production at home boosted the US' capabilities.

  29. this is an oversimplification…what about the dust bowl? That helped make the depression worse because those people who could survive just fine without a strong economy because they could feed themselves through farming could no longer rely on that to help them through the tough times. Also, the new tariff didn't help matters at all.

  30. This is such absolute bull shit! Take an economic course in college. Laissez-faire doesn't work. It's as simple as that.  

  31. BS wars create jobs and the losing nation gives the nation money.
    wait  never mind the jobs go away and inflation rises

  32. "There is no instance of a country having benefited from prolonged warfare."
    – Sun Zi

  33. I'm not a libertarian, but this is historically accurate. The New Deal helped to pave the way for the flourishing 50s and 60s, but did not cure the depression in the 30s. World War II put a lot of people back to work, but real economic growth didn't occur until the baby boom after the war.

  34. Why, for the average man (or woman) during WW2, did everyone who wanted one (though jobless before) were able to have a job? Why did the tremendous innovations which were produced during WW2 carry over to vast economic improvements after the war? Why were millions of vets (who could never have afforded college before the war) able to gain a nearly fully paid education under the GI bill …which further improved the economy by providing businesses with higher educated (more productive) members of society ?

  35. The main reason why we were able to pull out ahead after world war 2 is simple. UK was a wreck Germany was a wreck, France was a wreck, Japan was a wreck, China was a wreck and Russia was hurting as well. The US had no competition.

  36. The only difference between Bush Jr. and a Libertarian is that Libs don't bother to pretend to be religious.

    This is the most obvious an easiest to disprove revisionist history I Have read in a while.  Why not say Aliens built the pyramids too.

  37. Obvious Lies

    War destroy wealth…………………..Contrary to every war that has ever been waged (spoils always go to the winner)

    I like how he keep repeating the phrase as if the more times he says it the more it will become true.

    Wars are often one of the easiest ways to stimulate the economy since war itself is composed of many industries.

    It's just immoral to do so.  That is why we Americans are immoral people.  We allow it and ignore it.

    P.S. Putting up some old Brit to make your lies sound credible is pathetic

  38. get your liberal friends to see this!

    #thegreatdepression

    so then what caused the great depression? the FED of course !!

    #FED  the 100-year-scam … and counting!

  39. This video is capitalist propaganda. Capitalism requires systematic hierarchy-based violence to exist. It is not surprising that the Elder White Males in this video are conveniently ignorant of that fact. Without organized nation-state violence, capitalism would implode very, very quickly.

    I'm interested in a world governed by REASON rather than violence. I'm interested in the very real possibility for world peace and the end of poverty, so I am therefore by necessity opposed to both capitalism and the nation-state.

    Upvote this if you like reason more than you like violence.

    Yours in solidarity and compassion,

    World Citizen Seraph

  40. though war is not good 
    all war profiteers to jail 
    we should be on Mars by now if not for dumbass reagan
    and read about how WW1 caused WW2 and Crimea war is when rothschilds took over brit stock market with the 1 day late horserider detained
    I've been in 3 civil wars, the beautiful people I love in Central America and the Mayans were killed by the thousands for what GREED get real whatever this guy says war benefis ultimately only a few 

  41. "wars don't create wealth, they destroy it"??? It certainly creates wealth for the arms and munitions manufacturers! He lost me from the get go

  42.  FROM SYCOPHANT TO GHETTO          
    It happens every day, The military attempts to remake down and out pavement pounders, but fights a losing battle. This is a crime against humanoids. We discover individuals, many, that have given over to drugs. These unsettled and misunderstood souls never had a chance.This element originally hung on street corners, pool halls and etc., sleeping in dumpsters, at times, having been in prison and no friends. This life had been an avenue of ghetto existence.
    However, a bright future is in sight, when the military is to be a way out for a bum to become something. It offers three meals per day, a place to sleep and a monthly check. With caps in hand, usually, these types of individuals pleads with a judge, or probationary officer, to swipe their record clean, for the military will now take them off the streets. Too, and the city gets rid of side-walk pounding ravagers.
    Here, after settling down with multiple groups of men, friends are made. Yes, it is thought that new fair-weather pals brings on a some what elevated life. It is great to be accepted for an unknown out sider. What a life. There is a lot of drinking, friendly arguing, paling around and hand shaking, and usually playing up to some superior, as a certified sycophant. Wow, its’ a wonderful life. All of a sudden, after amounting to something, getting under the wings of Uncle Sam, a shallow world falls apart. The military gets smart. Out of no where,a psychiatrist holds a conference. This imposing misfit is presented with a section eight discharge, as unfit for military life. And now, this loner is back on the streets from whence he sprang.
    From nothing to the top, its back to street corners and dumpsters. All of his former military buddies are left behind. No one, takes up time nor notices a distraught personality, who all of a sudden, became nothing again, no peers, no nothing, no free liquor nor cigarette bumming, and from the top back to the bottom. Here we blame judges, and probation officers, for palming off a misfits onto the taxpayers responsibilities.
    The lesson to be taught here is that the military has indirectly contributed to men being discharged with mental disabilities, that should have never entered any service in the beginning. Once more, political whoredom has produced double-decker schizophrenics,returning home to roam the streets in America. And time marches on, the constructing of so-called half-way houses continues, in order to harbor hand-me-down paranoids. And the circus moves on. There is only one last try for such vagabonds, and that is to become a lawyer or a politician. As King Solomon surmised, “All is vanity”. It is best to stay away from those of whom seek unlikely pathways that eventually  leads to an ugly ending.
    The military is a great experience for young men to build character. However, all rabble rousers should be avoided that prefer to bum the streets. One last hope is to become a used-car salesman or insurance peddler.

  43. @IsaiahYoung well if you want to battle on "what works", youll find that nothing works. nothing is utopian. nothing sits in place so long as humans run it. and that is why humans will struggle no matter what. the best thing to do is find whats the fairest and stick with it.

  44. 1. What created the Depression of 1929 was the Federal Reserve and their fiat money of debt and the printing of debt. We were once again put in harms way financially and economically when the banksters paid off Congressmen and passed the Federal Reserve Act of 1913. 
    2. WW2 was a another banker war like all wars and Germany was the victim, not the aggressor. I hope Learn Liberty does a video on the myth of the holocaust. 
    3. Rockefeller and Rothschild made billions off WW1 and WW2 and to these people, who started the wars, that's all that matters…There was plenty of politicians and their banker friends that literally make a killing off military aggression in any form.  

    I would say the top three myths…The Federal Reserve Act of 1913 was legally ratified.
    The United States entered WW1 to fight for our freedom. And Germany wanted to conquer the world and the holocaust actually happened.

  45. yeah, but if i can make the others poorer than me by a war, that means i'm relatively wealthier. and that's what wealth is all about.(as i understand it at this moment. please, feel free to debate my statement.)

  46. I found a solution to the problem: "Commonwealth!" Here's an example of how: a talented entrepreneurs enjoys the challenge to create a successful business. He then sells it to his employees, who then become owners; i.e. don't depend anymore on unions and  low wages.  
    The entrepreneur gets his money back with some extra and starts a new venture… and again selling it to his employees etc. and every time the entrepreneur gets his money back with some extra and starts an even bigger venture… Gradually, we all become self-employed business owners! If then the more greedy ones own more, the less greedy ones won't envy them. Imagine how proud an entrepreneur then could be after having turned 2000 low wage earners into well to do business owners!
    So, why it is not happening?  Because most (if not all) talented entrepreneurs suffer from sordid greed! They believe only their talents deserve all the materialistic riches in our world.  🙁  Reason: They failed to dismantle their inherited/ or environmentally acquired negative traits and thus are unable to develop their full human potential!
    Are they not worried that their grossly selfish behavior in the long run might ignite yet another massive "Kristallnacht" type revolt?

  47. "Most historians agree" that right there is the kind of language that totally discredits a claim. Like a creationist saying "most biologists disagree on evolution"

  48. I concur war takes away wealth with the exception of perhaps a few…defense contractors and undertakers for instance, however, the war did allow (force) the USA to come together and fight and build an industrial foundation which allowed the USA to prosper once men/women came home and commenced building more roads (interstate system built by Eisenhower) change the military building to building washing machines, stoves, homes, cars, freeing up women to perform other functions. Ever wonder why the Japanese entered the USA car market ~ 25 years after WWII? Their factories and processes they built up after the war were more advanced than ours at that time.

  49. But if it's other countries' wealth that is destroyed you are at least better off as the only one with an intact industry.

  50. Holy shit, the amount of economically illiterate buffoons on this comment board hurts. Most of them say "this is wrong," "libertarian propaganda," or "where are your citation?" all without providing things to back their "arguments" up.

    Look, Learn Liberty's videos feature people who have a prolonged education and/or career in economics. Sure, they don't provide citations (I wish they would so 75% of you leftist morons would shut up), but unlike you, the basement dwelling 20-something-year-old who gets his/her economic/political information off of Reddit (aka bandwagoning), the people at Learn Liberty know what the fuck they're talking about.

  51. Davies argues (myth #2) that the UK exiting great depression in 1931 before US is evidence new deal didn't work. He doesn't address at all the KEY fact that UK left the gold standard in 1931 (when it exited depression). http://economics.mit.edu/files/1233

  52. All our problems exist because people think they have the right to use government to strip away natural rights because (insert bullshit) and manipulate natural order because (insert more bullshit).

  53. OMG, you can't call it a myth if it was taught in school. All 3 myths were in the my history books. Just like "Why the Sky is Blue?" science, ill have to update everything that ive ever learned.I am sad now, lol.

  54. It should be noted that the actions of war tend to redistribute wealth between the victors. World war 2 put the USA well ahead of Europe and Asia. eg. July 1944 The Bretton Woods system of monetary management. See The Great Depression: Crash Course US History #33 and World History #38.

  55. I agree with his points, but it would still be better if he presented some links or cites to back up his statements. No one's likely to believe him simply because he says it's true. However, if some really wants to find the truth instead of engaging in confirmation bias, he said things that can be checked. Hoover, for example, did do much to intervene and deal with the Depression. Look up what his administration did. FDR simply did more of the same things that Hoover did once he was in office.

  56. Actually WWII did play a huge part in ending the Great Depression in the United States. But not in the way of war build up. The commentator is correct in that. It ended here because every other Industrialized nation had large numbers of their factories destroyed through bombing campaigns. The United States infrastructure remained unscathed.

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