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The Politically Incorrect Guide to The Great Depression and The New Deal by Robert P. Murphy, Ph.D.

April 15, 2010 by  

Chances are what you learned in school about the causes of the Great Depression and the effects of the New Deal and Word War II on the American economy are all wrong. If you were taught to believe the free market caused the Great Depression and the New Deal and World War II got us out of it, reading The Politically Incorrect Guide to The Great Depression and The New Deal will set you straight.

Murphy earned his Ph.D. in economics at New York University and served as a professor at Hillsdale College. He is now an adjunct scholar with the Ludwig von Mises Institute, a senior fellow in business and economic studies at the Pacific Research Institute and economist with both the Mackinac Center for Public Policy and Institute for Energy Research. In The Politically Incorrect Guide, Murphy provides irrefutable evidence that the not only did government interference with the market cause the Great Depression, but the big government policies of Herbert Hoover and Franklin Delano Roosevelt made it last longer and become more severe than necessary.

Murphy deals with the three main explanations of the Great Depression: 1) The wildcat free market caused the Great Depression and the New Deal pulled us out of it; 2) A Market economy goes through natural ups and downs, but the Federal Reserve let the money supply collapse in the early 1930s, turning a normal downturn in the Great Depression; and 3) The Federal Reserve fueled the stock market boom of the 1920 with its easy money policies. After the crash, the Fed did the wrong thing by cutting rates and propping up unsound institutions. Hoover’s and FDR’s interventions in the economy only made things worse.

He dissects each argument and provides evidence that the third explanation is the most plausible.

Austrian school economists believe FDR’s New Deal was terrible for small business in America, with its wage and price control policies, restrictions and higher taxes hindering innovation and expansion. It also resulted in long-term high unemployment. And Murphy makes a strong case that this is so. He also shows how FDR’s banking holiday and the ensuing “safeguards” placed on the banking industry created many more problems than they solved.

Finally, Murphy makes the case that today’s recession is much like the Great Depression in cause and effect, and that because President Obama’s economic policies mirror FDR’s in so many ways, the result will be a recession that is deeper and lasts longer than is necessary.

The Politically Incorrect Guide to The Great Depression and The New Deal is an easy and quick read that is written in such a way as to give a good history lesson—without being too technical—for those seeking a better understanding of that dark period in America’s history. It also provides the reader with a better understanding of how our country got into its current financial mess.

Bob Livingston

is an ultra-conservative American and author of The Bob Livingston Letter™, founded in 1969. Bob has devoted much of his life to research and the quest for truth on a variety of subjects. Bob specializes in health issues such as nutritional supplements and alternatives to drugs, as well as issues of privacy (both personal and financial), asset protection and the preservation of freedom.

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  • Lisa Jones

    Funny how now we are rewriting history and trashing dead Presidents to make the current one look bad. When will it stop? When will they start offering real solutions instead of just talking trash?

  • http://gmail Dodad

    What do you expect when progressive liberials write, the books to feed us, and all students over the decades, the sewage to make Wilson and FDR, the great saviors of America, filled everyone with a slanted untrue stories of their and thugs, instead of the facts. Like the poor Indian story of loving mother earth, and being so caring get along with other people BS.

    • s c

      Lisa, once in a while, I could use a strong pain killer to help me get though the day. Once in a while, I need a good laugh. You obviously have a good source for pain killers, as your feedback diatribes tend to prove that. As for a good laugh, you might watch Carol Burnett re-runs. Your lack ofhumor needs some work.
      Why is it that progressives have no use for history unless it serves their purposes? Speaking as an ex-teacher, you seem to have no use for history, your reality is something you want to force on the rest of us, and if you’re not a total control freak (ala King George Obummer], you’re very close.
      In case no one told you, those who ignore the past are doomed to repeat it. Kindly move to another country, and do what you want there. I have no plans to abet your willing ignorance of history.
      While you’re at it, do some research on a classic progressive, Margret Sanger, and learn and appreciate what she has in store for people who seem to fit your ‘profile.’

      • http://PersonalLibertyDigest Bonnie J Wren

        SC, you really need to consider laying off those strong pain killers and while you’re at it, get over yourself….everything Lisa said was right on! progressives have been inundating American youngsters with garbage and outright lies for more than fifty years….as an ex-teacher, you surely must be aware of that! Are you perhaps defending your former colleagues? Instead of talking down to people who choose to no longer march in lock step to the progressive/socialist drumbeat, you might want to consider a period of personal growth! As frustrating as it must be for you, more and more Americans (like Lisa) are wising up to what has been going on and change is most definately in the wind….so, brace yourself!

        • s c

          BJW, not only did you get it wrong, you have it BACKWARDS. I am no stinking progressive. Lisa is. If you don’t understand that, you’re a willing part of the problem.
          Put no words in my mouth – ever. And, in the event that you’re a progressive plant (like Lisa), keep your kids in public school, where they can make Mommy proud of having little or nothing between their ears. I can only hope that your kids do better in school than you did.

  • s c

    For those who navigate this website, Murphy’s book will make more sense if you learn how Jackass Wilson used pc tactics during WWI to CONTROL Americans in the name of “patriotism.” Then, compare and contrast FDR’s growing powers over Americans in WWII. Wilson and FDR were cut from the same diseased, rotting, anti-American cloth.
    The Anointed One [Chicago's wannabe messiah], is a rehash of FDR. Only this time around, The Anointed One has dared to adopt saul alinsky’s methods and is trying to rape the Constitution and enslave America in his first term.
    Please READ a book about H L Mencken titled The Skeptic [Terry Teachout, Perennial Books, '02]. If you’re a Wilson fan, you sorely need a heavy dose of TRUTH. If you’re an FDR fan, you need a swift ass kick.
    Both Wilson and FDR were pc Nazis. Read on, people,
    and LEARN the TRUTH. Be an American while you can. Your children will love you more because you took the time to get re-educated.
    And, you just might help keep America FREE. I want to assume that you’d rather be FREE, and not endure SLAVERY by making freedom-hating, corrupt, useful idiot politicians “happy.”

  • Barbara

    Doesn’t anyone who replies on this site have any sense? Most of the replies are nearly impossible to understand, given their poor grammar, spelling, reasoning, etc. I live in Texas and we certainly have our own budget problems and a Governor who allows the Legislature, only in session every other year, despite Texas’ size and complexity, to address such issues as making pets part of the family, forcing women who seek abortions to watch sonograms of their babies before they decide, and other inane issues, instead of figuring out ways to balance the budget without making draconian cuts to education funds, forcing the layoffs of hundreds of teachers and closisng exemplary schools. I can’t believe the depths to which my beloved country and state have sunk. Obama is the worst president ever and seems determined to oversee the total ruination of the U.S. I am nearly 77 years old and welcome the fact that maybe I don’t have too much longer to live in the miserable place this country is becoming. I don’t want the U.S. to look and behave like the Middle East. I want my country back, where people behaved decently, paid their own bills and extended a hand to their neighbors in need, without depending on the government to do it.

  • Anthony

    I would have to read the entire book first, but I ponder whether he brings up the existence and interaction of The Federal Reserve? Maybe I will later on…. Still, the question begs an answer.

    THE FED’s monetary policy is what handed us the Great Depression.
    It was done on purpose.

    Back in 1907, John D Rockefeller went to the newspapers and told them he was having a run on his Bank. The news then reported it. Then, the public panicked and there was…. a run on the Banks. A self-fulfilling event.

    Then, Rockefeller, Morgan and Warburg got Congress to approve THE FED – aka: A central bank. They approved it on the notion that if we had a central bank, then the run on the banks could never happen again.

    The issue with this – is it was the creators of THE FED, that also created that 1907 run on the Banks, in the first place. This is a true story.

    The 1st thing, THE FED wanted was to engage America in WWI – Wooodrow Wilson said NO. But, Rockefeller funded Wilson’s bid to be POTUS. So, the same european Central bank that Rockefeller was “related to” sent emmisaries out and had the germans sink the Lusitania. Wallah, the U.S. …is “OVER THERE, OVER THERE”. I see Jimmy Cagney as I write this.

    Why is War so important? Because all Governments have to “borrow” money to fight them. Guess who loans that money! Guess who has options to fund BOTH sides in a War(?) Guess who might whisper in ears, to cause reactions that could lead to War(?) People, the option for avarice and corruption in a Central Bank is enormous. And, if they are not reporting to a higher authority, who is to stop them?

    This is why I question this book’s accuracy. I’ll have to see if there is a PDF, even of a section of it. If not, I’m sure it can wait.

    And, yes… History is written by whomever is in Power.

  • http://www.xdlj.com Damien Stram

    This is my first time i visit here. I create so innumerable provocative baggage in your blog unusually its discussion. From the tons of comments on your articles, I postulate I am not the one one having all the enjoyment here! board up the good work.

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