Discussion: Starting in January of 1919, what would need to be done to avoid the Great Depression?

What would need to be done to prevent it, and in what plausible ways could things have been achieved? I'd prefer to avoid changing the Treaty of Versailles, IMO its reputation in directly leading to German instability is often overstated.
 
Staying off the Gold Standard
This.

1. The Gold Standard was an idea whose time was past and the attempts to resurrect it after the de-facto abandonment during WW1 were ill-judged and highly detrimental to numerous economies.
In the UK, for example, this led to two years of very high real interest rates which crippled UK industry and led to high unemployment. In 1923 when the Great Deflation ended UK unemployment was at 11% (up from 3% in 1920 and down from 11% in Q2 1921). Unemployment stayed around 10% until WW2.
2. Secondly US/UK economic coordination would have been helpful. Of course historically no mechanism for this existed no was there a will for this. This might alleviate the problem of post-war deflation
3. Screw the War Bond holders. The idea that those who'd bought the war loans deserved to be paid back in a currency that had it's pre-war purchasing power was unjustified.
4. Better regulation and control of the economy. Accepting that laissez-faire capitalism and an unfettered market simply doesn't deliver either prosperity or stability.
5. Listen to Keynes. He was right more often than he was wrong, an unusual trait in an economist.
 

soundnfury

Banned
A good start would be to not do most of the things that OTL leaders did to avoid it. Sadly your POD is too late to prevent the creation of the Federal Reserve, and having them listen to the Austrians and tighten credit sooner probably requires ASB. But maybe *Hoover, having the courage of his convictions, rejects agricultural price supports, vetoes the Smoot-Hawley tariff bill, and generally avoids the "Something must be done; this is something; therefore we must do it" syndrome that characterises governmental responses to recession. With readjustment allowed to proceed and malinvestments allowed to fail rather than good money being thrown after bad, the Depression never becomes 'Great', especially as the hands-off policy to recovery shows dividends in time to stop *FDR and his New Deal. Without that precedent, the power of the executive remains properly checked and balanced in the US system. An FDR-less WWII would also doubtless be an interesting proposition, but beyond my ability to forecast.
 
This.

1. The Gold Standard was an idea whose time was past and the attempts to resurrect it after the de-facto abandonment during WW1 were ill-judged and highly detrimental to numerous economies.
In the UK, for example, this led to two years of very high real interest rates which crippled UK industry and led to high unemployment. In 1923 when the Great Deflation ended UK unemployment was at 11% (up from 3% in 1920 and down from 11% in Q2 1921). Unemployment stayed around 10% until WW2.
2. Secondly US/UK economic coordination would have been helpful. Of course historically no mechanism for this existed no was there a will for this. This might alleviate the problem of post-war deflation
3. Screw the War Bond holders. The idea that those who'd bought the war loans deserved to be paid back in a currency that had it's pre-war purchasing power was unjustified.
4. Better regulation and control of the economy. Accepting that laissez-faire capitalism and an unfettered market simply doesn't deliver either prosperity or stability.
5. Listen to Keynes. He was right more often than he was wrong, an unusual trait in an economist.

By staying off the Gold Standard the U.S. would have more flexibility to pursue fiscal stimulus. In 1929 U.S. federal spending made up 3 % of U.S. GDP, yet by 1932 the U.S. government was forced to pursue a balanced budget worsening the deficit. Hoover did understand the benefit of counter cyclical government stimulus, but was unable tp provide the sufficient amount.

By staying off the Gold Standard the U.S. would also have been able to fighting interest rate sin 1927 when they loosened them OTL. The housing market collapsed in 1295 and in 1927 the stock market began to accelerate, a loosening of interest rates would have prevented this bubble. meanwhile keeping Weimar Germany t off the gold standard could have avoided their own raising of interest rates in 1927. In short staying off the gold standard frees both Europe and America
 
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By staying off the Gold Standard the U.S. would have more flexibility to pursue facial stimulus. In 1929 U.S. federal spending made up 3 % of U.S. GDP, yet by 1932 the U.S. government was forced to pursue a balanced budget worsening the deficit. Hoover did understand the benefit of counter cyclical government stimulus, but was unable tp provide the sufficient amount.

By staying off the Gold Standard the U.S. would also have been able to fighting interest rate sin 1927 when they loosened them OTL. The housing market collapsed in 1295 and in 1927 the stock market began to accelerate, a loosening of interest rates would have prevented this bubble. meanwhile Wiemar Germany that was off the gold standard could have avoided their own raising of interest rates in 1927. In short staying off the gold standard frees both Europe and America
Agreed.
Though I think you have an autotypo, should "facial" be "financial"? :)
 
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