Reducing the effects of the depression?

Can the Great Depression be less severe?

  • No, and we were fortunte that it wasn't worse.

    Votes: 3 25.0%
  • No; it is almost gauranteed to be about as bad as it was

    Votes: 0 0.0%
  • Yes, it could have been less severe, but would still last a long time

    Votes: 1 8.3%
  • Yes, it could have been much shorter, but still very severe

    Votes: 2 16.7%
  • Yes, it could have been both shorter and less severe

    Votes: 6 50.0%
  • Yes, it could have been seen as a minor market correction

    Votes: 0 0.0%
  • Other (please explain)

    Votes: 0 0.0%

  • Total voters
    12
A great depression is essentially inevitable in the late 1920's or early 1930's. Given that, what could happen either in the months before it starts, or soon afterwards, to seriously mitigate its effects? POD no more than one year before things fall apart. How much less severe could it be with no ASB's involved, although a bit of inspiration on someone's part is allowed. The POD can also be after it happens, as a plan, program, or whaever that reduces the effects.

Could things be on the upswing within a few years, and not collapse again any time soon?

And--could someone with a lot of wealth who sees that the bubble will burst at some point mitigate the effects nationwide or beyond? (Obviously, someone with wealth can find ways to increase his own personal fortune if a collapse is forcast.)

When answering, remember that the POD is only one year before Black Tuesday, or Black whatever, if butterflies from the POD change the date it happens.
 
Remove Hoover as the President. Seriously, from what I've read the policies he applied had the effect of worsening the economic conditions. There had been depressions before in the United States: 1807, 1819, 1873 and 1920 among others. Hoover's policies seemed to just lengthen the economic collapse and thwart the normal recovery process- Smoot-Hawley Tariff Act for example.
 
For tariffs to be a big driver of the depression, foreign trade would have had to be a big part of the American economy in 1929. Was it?
 
There are arguments on that point. https://en.wikipedia.org/wiki/Smoot–Hawley_Tariff_Act
I personally think, take it for what you will, that every little bit hurt the economy. Perhaps a better example of Hoover's meddling was his urging/hectoring of private business to not lower wages. The problem was that if profit/income is decreasing and no decrease in expenses/salaries occurs the solution is to reduce the number of employees.
 
Remove Hoover as the President. Seriously, from what I've read the policies he applied had the effect of worsening the economic conditions. There had been depressions before in the United States: 1807, 1819, 1873 and 1920 among others. Hoover's policies seemed to just lengthen the economic collapse and thwart the normal recovery process- Smoot-Hawley Tariff Act for example.
What was different from previous depressions wasn't Hoover: It was urbanization, and with it the disappearance of a safety net that everyone had taken for granted until then. In the earlier depressions with so much of the population being rural, even if you were a stockbroker in the city, you had family on a farm somewhere. If you lost everything, you went and lived with them and worked for food. By 1929, we'd urbanized to the point that this wasn't an option for everyone in the city, or even most people in the city.
 
Remove Hoover as the President. Seriously, from what I've read the policies he applied had the effect of worsening the economic conditions. There had been depressions before in the United States: 1807, 1819, 1873 and 1920 among others. Hoover's policies seemed to just lengthen the economic collapse and thwart the normal recovery process- Smoot-Hawley Tariff Act for example.

If, say, Coolidge were president in place of Hoover, he'd still have passed tariffs. It was a major part of the Republican platform. Plus, many Republicans, Coolidge included, adhered to Mellon's solution to the great recession, which was to "[l]iquidate labor, liquidate stocks,liquidate farmers, liquidate real estate to purge the rotteness out of the system". Basically, allow the economy to fall to the bottom by doing nothing. That would have made the Great Depression even worse.
 
One way to avoid the depression would have been leaving the Gold standard meaning the US would not have needed to pursue a deflationary policy
 
Pretty much everything we know about economic policy was learned during the Great Depression and a lot of the response would look a bit like the New Deal. Pretty much any standard modern response would have ameliorated the downturn. Fiscal stimulus to increase aggregate demand, monetary stimulus to increase the money supply and deposit insurance to prevent bank runs all would have helped. To prevent the farm foreclosure crisis, debt relief for farmers, a foreclosure moratorium and farm price supports could have gone a long way. Fight deflation at all costs, that's what took the depression from a downturn into something really ugly. This isn't particularly hard nor is great creativity required. But you do have to use a modern understanding of economic policy and cast aside fiscal and moral attitudes of that period including reducing the stigma attached to receiving relief. It turns out that throwing money at people actually has a positive effect! What doesn't work is the Mellon solution of liquidation; the end result there is just needless hardship and suffering.

ETA: As Mr1940s notes, getting off the gold standard helps here.
 

Insider

Banned
Inevitable? Yes, every buble has to burst some time. Severe... well, swift and good response for crisis may blunt it a bit, but it require the government to have decent budget in first place to afford the costly measures. What would be perhaps best way to do is to let the crisis run its course for few months and then try to jump start the economy.
 
And--could someone with a lot of wealth who sees that the bubble will burst at some point mitigate the effects nationwide or beyond? (Obviously, someone with wealth can find ways to increase his own personal fortune if a collapse is forcast.)

Forgot to respond to this part. IIRC, there were some attempts by such individuals in OTL by attempting to prop up the stock market. However, by the time they responded the collapse was too far along. Maybe if they had more warning. I remember from my college days during the stock market trouble in 1987 that there some indications that such a thing happened in relation to the Commodities market in Chicago in the second day of the troubles.

Long story short, it's possible but it would be difficult with the POD of only one year out.
 

jahenders

Banned
Pretty much everything we know about economic policy was learned during the Great Depression and a lot of the response would look a bit like the New Deal. Pretty much any standard modern response would have ameliorated the downturn. Fiscal stimulus to increase aggregate demand, monetary stimulus to increase the money supply and deposit insurance to prevent bank runs all would have helped. To prevent the farm foreclosure crisis, debt relief for farmers, a foreclosure moratorium and farm price supports could have gone a long way. Fight deflation at all costs, that's what took the depression from a downturn into something really ugly. This isn't particularly hard nor is great creativity required. But you do have to use a modern understanding of economic policy and cast aside fiscal and moral attitudes of that period including reducing the stigma attached to receiving relief. It turns out that throwing money at people actually has a positive effect!

Many elements of the First New Deal (33-34) were appropriate to the crisis at hand -- short-term distribution of funds to help people in immediate crisis, encourage growth, and address a few key issues that contributed to that particular crisis. The goodness of the elements of the Second New Deal (35-38) (Social Security, making the federal government the single largest employer, encouraging unions, etc.) are far less clear cut. Most of the former were short-term responses to an immediate problem, while those of the latter were semi-permanent responses to a short-term problem -- less fitting and far more costly over time.

Unrestricted, permanent throwing money at people doesn't always have a positive affect. More precisely stated -- giving limited amounts of money to specifically affected people for short periods of time has a positive effect.
 
Pop the Florida real-estate bubble earlier. Have a category-5 storm wash away Miami Beach in 1920, so there's not half a decade worth of mal-investment to deal with.
 
Have the US not lower interest rates in the late 1920s. This effort was done to encourage gold flows back into the UK and France. If the UK was not on the gold standard (maybe Churchill trusts his gut rather than the treasury) then this cut may not have been necessary. This means that the money supply does not grow as rapidly from 1927-1929 while the U.K. And the US can avoid the need for a deflationary policy 1929-1933. The Great Depression was a failure primarily of monetary rather than fiscal policy.
 
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