The Great Crash of 1929 Aborted

That wouldn't work. You can't stop a bubble that's popped by attempting to make a new bubble. Furthermore, the Stock Market crash was only forerunner to the real crisis that had been brewing for decades. The credit crisis and faltering industrial demand were pretty much an inevitable result of the past few decades of policy. The rising income inequality, coupled with unregulated financing and an extended economic bubble are what made the crash. Sound familiar, huh?
 
That wouldn't work. You can't stop a bubble that's popped by attempting to make a new bubble. Furthermore, the Stock Market crash was only forerunner to the real crisis that had been brewing for decades. The credit crisis and faltering industrial demand were pretty much an inevitable result of the past few decades of policy. The rising income inequality, coupled with unregulated financing and an extended economic bubble are what made the crash. Sound familiar, huh?

Well, in theory, you could stop a bubble from popping by creating a new bubble each time the old one was in trouble indefinitly, so long as nobody ever questioned the stability of the bubbles.



But that is basically a very successful ponzi scheme.



But, on a more serious note, I agree. There were deep-seeted reasons for the crash, and no quick fix is going to be anything more than that.
 
Well, in theory, you could stop a bubble from popping by creating a new bubble each time the old one was in trouble indefinitly, so long as nobody ever questioned the stability of the bubbles.

Nah, that's just an enormous metabubble and when it bursts... well, let's just hope you like tilling the earth, Comrade.
 
Even if the Great Crash is stopped, might there still be other problems?

You might have a recession or a less terrible Depression in TTL.
 
Well, in theory, you could stop a bubble from popping by creating a new bubble each time the old one was in trouble indefinitly, so long as nobody ever questioned the stability of the bubbles.

Eventually you run out of bubbles, which is pretty much where we are at the moment

The only stable (ie non boom-bust) economy is one where the economic growth is around about the same as population growth
 
Best way to stop the crash of 1929 it to stop the move of the financial capital of the world from London to NY....

Or bail out a bank... and give the head of the bank a redicilous pension to get lost ;)
 
That wouldn't work. You can't stop a bubble that's popped by attempting to make a new bubble. Furthermore, the Stock Market crash was only forerunner to the real crisis that had been brewing for decades. The credit crisis and faltering industrial demand were pretty much an inevitable result of the past few decades of policy. The rising income inequality, coupled with unregulated financing and an extended economic bubble are what made the crash. Sound familiar, huh?

It's amazing how we suddenly have economic experts everywhere.
 
Well you could certainly make its length and severity less by avoiding the Smoot-Hawley Tariff Act.
id say allow monopolies. prices at the time monopolies were around, were relatively low in many cases. the illegalization of a monopoly broke apart many companies and raised prices to compensate, which then needed to compete and had to lower their prices to a level that would allow the bear minimum of profit (quite literally 1 cent in the case of the old AT&T monopoly/breakup)
 
well one of the ways to combat the depression would be to already have a system like the FDIC in place meaning people wouldn't make banking runs and Banks wouldn't be zapped of their reserves
 
It's amazing how we suddenly have economic experts everywhere.

As to the profusion of experts, I for one blame clusterstock.

Now Dr. Waterhouse is no Dr. Krugman (or for that matter Henry Blodget), but this is my view:

Probably the best way to even out the irrational peaks and valleys of the stock market is to ban or restrict buying on margin. If people, much less for the love of God banks, are allowed to run up debts in the handling of securities which they cannot possibly repay, then there's going to be forfeitures when the securities fall in value. We're now in the circumstances where basically those forfeitures are too large for the market to bear and so the government thinks it cannot allow them to occur, but at the same time the total amount of these shortfalls are so large they're really notional in value, which is to say they involve more money really than even the government can pay, or can possibly even exist. Really: one hears numbers on the basic cable news shows being thrown around now so large I only think I've ever used them trying to explain to a six-year-old how big the universe is.

Eliminating or restricting margins helps, even when we're dealing with securities that are otherwise compromised or weird, like securitized mortgages or credit default swaps or that most awesome of them all, the swaption.

I don't have the background for my own analysis of the root causes of the actual Depression and in the end that's what you need to solve, not just the market symptoms of that Depression, even though they aggravate the problem. To my understanding the economies of the 1920s were creating more products than they were consuming, and we can attribute this to any number of causes, several of which are probably right. A free marketeer will tell you that even before Smoot Hawley jacked up the tariffs, so many governments in the world were operating on mercantilist principles and encouraging domestic industry and discouraging imports that there was nowhere for the extra produced goods to go. (A tariff, by definition, makes it harder to be a consumer than to be a producer.) A progressive view would be that income inequalities kept the great mass of consumers from being able to afford all the goods being produced.

So a combination of trade deals to lower barriers, refundable tax cuts at the lower end of the income ladder (I'm not sure quite how the income tax worked that early on), and a well-timed infusion of social welfare and infrastructure spending could have been just the ticket to ease the economy away from the structural imbalances before things got out of hand.

And let's not forget restrictions on margin buying. But the great problem is that at the peak of the boom no one wants to do that sort of thing. So the changes you would want to make would probably have to be at the front end of the 20's.
 
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