The Great Depression Wasn't an Accident (4 Decisions That Caused It)

What really caused the Great Depression? Not the 1929 stock market crash alone. Four decisions turned a crash into the worst economic disaster of the modern world: borrowing to gamble on stocks, letting thousands of banks fail, the Smoot-Hawley tariff that shut down world trade, and tax hikes that squeezed an economy already starving for money. In 1928, Herbert Hoover said America was nearer to the "final triumph over poverty" than ever before. Four years later, one in four workers had no job, bank runs had wiped out families' savings, and the crisis was helping Adolf Hitler rise to power in Germany. Then Franklin Roosevelt's bank holiday, his first fireside chat and federal deposit insurance turned it around. In 2002, a Federal Reserve official finally apologized for the Fed's part in it. In this animated history explainer: • Why buying stocks on margin made the 1929 crash so violent • How bank runs and the Federal Reserve's mistakes shrank the money supply by about a third • What the Smoot-Hawley tariff did to world trade and American farmers • How the Great Depression helped Hitler take power • What Ben Bernanke told Milton Friedman on his 90th birthday 0:00 Opening 0:52 Decision 1: Borrow to Buy 2:03 Decision 2: Let the Banks Fall 3:39 Decision 3: Shut the Doors 4:21 Decision 4: Squeeze Harder 5:28 The Price: Germany 6:21 The Turnaround 7:22 The Lesson: "We Did It" 📚 Sources Federal Reserve History, Stock Market Crash of 1929: https://www.federalreservehistory.org/essa... Federal Reserve History, Banking Panics of 1930–31: https://www.federalreservehistory.org/essa... Federal Reserve History, Banking Panics of 1931–33: https://www.federalreservehistory.org/essa... Silber, "Why Did FDR's Bank Holiday Succeed?" (FRBNY, 2009): https://www.newyorkfed.org/medialibrary/me... Hoover's 1928 acceptance speech (Hoover Library): https://hoover.blogs.archives.gov/2020/08/... The Bonus Army (Hoover Library): https://hoover.blogs.archives.gov/2017/07/... Revenue Act of 1932: https://en.wikipedia.org/wiki/Revenue_Act_... Smoot–Hawley Tariff Act: https://en.wikipedia.org/wiki/Smoot%E2%80%... FDR's first inaugural address: https://www.presidency.ucsb.edu/documents/... FDR's fireside chat on banking: https://www.presidency.ucsb.edu/documents/... FDIC history, 1930–1939: https://www.fdic.gov/about/history/deposit... Friedman & Schwartz, A Monetary History of the United States: https://en.wikipedia.org/wiki/A_Monetary_H... Bernanke, remarks at Milton Friedman's 90th birthday (Nov 8, 2002): https://www.federalreserve.gov/boarddocs/s... Subscribe to Vault & Throne for animated stories about money, power and history. Narration and animation by Vault & Throne. Characters are illustrated caricatures for storytelling. #GreatDepression #History #Economics