What if the Great Depression never happened?

Deleted member 1487

I'm generally of the opinion that banks cause depressions, or broadly, financial institutions do. Like the stock market bubble which crashed in 1929.
The market crashed because of wider trends going on in the economy, it was the market that caused it, it was the loudest event in a widespread economic problem that was already underway.
 
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The Great Depression was an entirely avoidable event even by the late 1920s. A recession would be an inevitability at some point, but if central banks in the US and France aren't embarking on a competitive policy of gold-hoarding and credit contraction, or if they actively reverse course when growth slows down, then there's little reason to believe that growth couldn't be sustained or restarted.

It's worth mentioning that the US economy in the 1920s was very unlikely to have been in an overall 'bubble'. If anything, monetary policy was quite tight during this period, constraining credit growth considerably. In no other American expansion do you see prices being stagnant or falling as you do during the expansion of the 1920s.
 
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Heck, we might have Gerard O'Neill type space colonies by 1989!!!
 
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The market crashed because of wider trends going on in the market, . . .
Honest to gosh, I think a lot of it is glitchy factors, and then we as human beings put a narrative on after the fact, just like we usually do in order to make sense of the world.

For example, shifting topics to the 2008 meltdown, a lot of conservatives focused on government debt. Well, it's part of their world view and something they often focus on. And heck, conservatives certainly aren't the only people who want to be responsible about debt. But it was a financial institution meltdown with companies over-investing in the re-sell market for sub-prime mortgages. Companies like Bear Stearns, Lehman Brothers, and AIG didn't want to miss out on a hot thing, even though the whole thing was unsound. It was almost a classic bubble, at least as much a bubble as something can be in the messy real world.
 
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Deleted member 1487

Honest to gosh, I think a lot of it is glitchy factors, and then we as human beings put a narrative on after the fact, just like we usually do in order to make sense of the world.

For example, shifting topics to the 2008 meltdown, a lot of conservatives focused on government debt. Well, it's part of their world view and something they often focus on. And heck, conservatives certainly aren't the only people who want to be responsible about debt. But it was a financial institution meltdown with companies over-investing in the re-sell market for sub-prime mortgages. Companies like Bear Stearns, Lehman Brothers, and AIG didn't want to miss out on a hot thing, even though the whole thing was unsound. It was almost a classic bubble, at least as much a bubble as something can be in the messy real world.
I mistyped and meant to say wider factors in the economy.
https://en.wikipedia.org/wiki/Great_Depression_in_the_United_States
The Great Depression began in August 1929, when the United States economy first went into an economic recession. Although the country spent two months with declining GDP, it was not until the Wall Street Crash in October 1929 that the effects of a declining economy were felt, and a major worldwide economic downturn ensued.

The usual explanations include numerous factors, especially high consumer debt, ill-regulated markets that permitted overoptimistic loans by banks and investors, and the lack of high-growth new industries,[2] all interacting to create a downward economic spiral of reduced spending, falling confidence and lowered production.[3]

Industries that suffered the most included construction, agriculture as [URL='https://en.wikipedia.org/wiki/Dust_Bowl']dust-bowl conditions
persisted in the agricultural heartland, shipping, mining, and logging as well as durable goods like automobiles and appliances that could be postponed.[/URL]
 
The political and economic tools to prevent Depressions were developed as a result of the 1930s experience. Without the Depression, you paradoxically lack the knowledge of how to stop it happening.
 
Another factor is the economic dislocation caused by the introduction of new technologies. By 1929 virtually all urban and much rural transport of goods and passengers was by motor vehicle. Tractors steadily replacing plough horses. Massive drop in the urban horse population and steady drop in the rural horse population that rendered most (non-recreational) horse breeding unprofitable and the fodder crop oats to become significantly less profitable. Tractors also allow a higher acreage to be ploughed. Grain production increases. Prohibition interferes with the best method of using surplus grain. Grain prices fall.
Radio, gramophones and cinema reduced the demand for live performers (and scene shifters, theatrical carpenters etc.). Refrigeration (and a generation later domestic freezing even more so) and canning technologies allow for economies of scale in fresh food purchases and reduce wastage through spoiling. Which is great, if you aren't running a vegetable store. Automation and road transport improves productivity and market reach in many industries to the degree that fewer businesses are needed (look at all the independent car businesses that ended up closing or merged as the Big Three came to dominate). Chain stores like Woolworth price smaller rivals out of business.
Changes to clothing and fashion are radical in the post WWI era. Not a great time to be manufacturing bustles or whalebone corsets -or moustache wax!

Typically, there is a "sweet spot" when new technologies provide additional employment to established industries before they start to have a more nuanced effect. E.g. cinema and vaudeville. Or DVD and Netflix. Initially their impact is minimal (some cinemas open but no theatres close) but, as the technologies improve and become established the newcomer begins to have a disruptive effect as the older format /industry increasingly loses market share. Vaudeville starts to die. Or video stores and DVD pressing plants to close. Arrival of new goods and services is rarely cost free.
 

Humans Need Not Apply


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These youtube videos talk about automation on the horizon. 1:00 into the first one, the guy says, "You may think we've been here before, but we haven't. This time is different." And that may be a key hinge point where you either agree or disagree.
 
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