It’s one of the biggest misconceptions that we’ve ever been taught in school. “What started the Great Depression?”
And if you ask a lot of adults these days, I’m sure a good number would still give you the same answer that we were all told at one point: “Black Monday. October 29, 1929, the stock market crash.”
But that’s just one of many. We’re also told that the Civil War started with the attack on Fort Sumter. And for some reason, we’re told that World War I—a conflict that killed 10 million people and changed the world forever—started with one man with a pistol. How preposterous is that?
In the back of our minds, we realize that isn’t the case. Fires don’t just start burning. You need kindling. Cakes don’t bake themselves. You need to ingredients. It’s the same with every single major event in history.
Economics are a complex topic. And yet it is always one of the leading topics when it comes to elections. The reason for that is very simple—because it affects everybody. That’s another thing we were taught about the Great Depression. That’s something that we were taught correctly.
Perhaps the reason we associate the stock market crash with the start of the crisis is because of what came just before it—a decade of a booming economy, big interests in music and fashion and an overall cultural revolution. The “Roaring Twenties” were like night and day compared to the 1930s. However, it is not that life was terrific and everyone was happy and then all of a sudden one day the banks closed. Behind all of the sunshine of the 1920s were looming clouds in the distance, gathering into a storm.
Bank deposits were uninsured at this time and thus as banks later failed, people simply lost their savings. Banks that didn’t collapse were hesitant to create new loans. Overproduction of food as a result of World War I hurt small farms, causing prices to drop. After the crash, people spent less money on products. The crash of 1929 was indeed significant and was the “spark” that helped ignite the Depression, but the seeds of the Depression itself go back ten years and more. Yet a lot of people blamed then President Herbert Hoover, who was inaugurated just six months before the crash.
So why do we blame former President George W. Bush for the Great Recession in our lifetime? A 2013 Gallup Poll found that 69 percent—more than two-thirds— said they blamed Bush “a great deal” or “a moderate amount” for the nation’s economic problems. Our situation is honestly just on a smaller scale of the 1930s—a recessive decade in the late 2000s after a booming period in the 1990s, thanks to the .com emergence and favorable oil prices.
Like 1929, everything wasn’t great until that fateful October day in 2008 when the U.S. government had to bail out some of the nation’s biggest banks. The subprime mortgage crisis, international trade imbalances, and many argue the repeal of the Glass-Steagall Act, a law passed in 1933 that limited financial securities with commercial banks, which the Clinton administration repealed in the 1990s, were the seeds to our current economic woes. And many of the seeds of these seeds go back much further than the Bush years.
There is still a lot to learn as well. The Great Recession—nor the Depression for that matter—are completely understood or explained. As I said, economics are a complex topic. And when economic disasters arise, their origins cannot be drawn back to one person, one cause, or one significant event. History has a lot of blame to go around.
Luke Parsnow is a copy editor and page designer at The Post-Star, a Pulitzer-Prize winning daily publication located in Glens Falls, New York. You can follow his blog “Things That Matter” by clicking “Follow” below and follow his updates on Twitter at https://twitter.com/coolhand_luke88