[hocking]

P_Funk, you said,

"If government involvement in the market is what stunts it why then did laissez-faire tactics do nothing to prevent the depression? Why did the depression happen at all? Nobody has ever cited overzealous government in the crash of 1929. In fact it was the intrusive efforts of government that helped move the country back into the black, be it Keynesian economics under FDR, or War Economy in WW2 under FDR. I do not contradict the concept of profit. I however do see the motivation to acquire profit at the cost of so many other things, as it often is, as a contradiction to the interests of the market and those that depend on it."

You say it was the "intrusive efforts of government that helped move the country back into the black". You are kidding right. The leading industrialized nations responded to the crisis by imposing trade barriers on imports with the hopes of increasing demand for domestically produced goods and to raise revenue from tariffs. Concerns about low agricultural prices, an influx of imports, rising unemployment, and declining tax revenue generated public sentiment for trade restraints. The Smoot-Hawley Tariff Act of June 17, 1930 responded by raising tariffs by up to 50% on a wide range of goods. Unfortunately, the resulting fall in imports created unemployment abroad that quickly invoked protectionism in response, creating unemployment back in the US! Many fruitful trading relationships fell apart and the depressed domestic economies could not make up for them. By March 1933 international trade plummeted to 33% of its 1929 level. Since there were even more communications, logistic, and financial barriers to be overcome back then than there are today, it is likely that the goods traded internationally were of great economic value and advantage to the economies that were receiving them. The loss of such trade was devastating and had ripple effects not unlike bank failures. Even though tariff rates rose by up to 50%, imports declined so sharply that tariff revenues fell 46% from $602 million in 1929 to $328 million in 1932. This not to mention the loss of tax revenue from the domestic unemployment the tariffs caused indirectly. And you say, "intrusive efforts of government that helped move the country back into the black".

There is even more. Under the political thinking of the day (and since nothing else was working) the federal government decided it was morally prudent to pursue a balanced budget. As tax revenue was plummeting along with economic activity in the period from 1929 to 1932 it was only natural to raise taxes to cover the mushrooming deficit. Does this not sound familiar in todays political views of the United States. Only because most people are totally oblivious to economic history.

In 1932, Republican president, Herbert Hoover, with the support of the newly elected Democratic majority in the House of Representatives, passed the largest peacetime tax increase in the history of the United States. Marginal income tax rates were raised from 1.5% to 4% at the low end and from 25% to 63% at the top of the scale. A huge tax increase by any measure.
Some people say the timing for this couldn't have been worse because tax increases are generally associated with decreases in aggregate demand for goods and services and the incentive to earn. But the low tax rates prior to 1932 had not prevented the drop in demand to date. At that point the situation was becoming so severe that anybody that still had a job had every incentive to earn, if only to keep it. The main obstacle to demand then was probably fear of spending! If you earned money, you saved as much as you possibly could and with bank failures everywhere, you probably hid your savings under the mattress. So maybe it was just as well to pay more out in taxes because then the government could spend it for you and stimulate the economy that way. But the tax increase did take money out of people's hands that could have been spent more "efficiently" if not equitably, so it is considered to be a factor, which prolonged the downturn. Under the circumstances the government should have simply borrowed and engaged in generous deficit spending.

Our government did not bring us out of the great depression. Adolf Hitler assisted the world in coming out of the Great Depression moreso than the US government by starting World War II.

As far as what caused the depression to begin with. One of the larger factors was not having a central bank that knew how control money supply. The federal reserve system we know today was formulated shortly after the Great Depression. That is why we have never had another depression, and why most economic textbooks have completely eliminated "Depression" out of the Business Cycle terminology (the Business Cycle today is simply Recession, Recovery, and Prosperity). The government also started creating some of their "Anti-Free Trade" agenda's during the late 1920's as well.

P_Funk, I really think you would enjoy an economic history class. I really mean that. I am not insulting your intelligence. I am seeing that you at least think about things, and develop ideas on your own. You just need to back them up a little bit better, and spend more time developing them maybe. Take this as encouragement. An economic history class would cover Keynesian Economics, Classical Economics, and newer forms of the Classical Economics developed by Milton Friedman. All this sounds like it is right down your ally.