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Originally posted by dreamtrove:
Signym pointed out that I had the wrong date on the hoover tax hikes, and so they couldn't have cause the crash of '29, being as they were in '32.

Which opens a can of worms. What did cause it?

Also, what caused the crash of 2000? I suspect the parallel here is that it's the same thing all over again.

Also, I think that the root causes are the causes of the depression which followed. I think I'll dodge the question "are we living in the second great depression?" because mathematically we must be, even if it doesn't seem like it.

But what was the cause, or causes, and what played the largest part?

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Originally posted by dreamtrove:
Well, one thing's clear: Wars create national debt.

This was interesting



There has been a taxburden shift in corporate america from the profits to the payroll. This seems extremely regressive to me, instead of taxing the most successful corporations, we are now taxing the ones with the most workers

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Originally posted by dreamtrove:
Once the capital has dried up, the depression is a result of the lack of jobs caused by the no capital to hire anyone. But the part I don't get is where the lack of capital is coming from.

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The 1920's were a time of unbelievable prosperity. The stock market was going through the roof and the United States seemed to have the formula for limitless prosperity. However, the same formula that generated all of that profit would also be the cause of Black Tuesday.

Investment during the 1920's was based on the unstable basis of margin buying. Investors bought borrowed money from their brokers, who went to banks for that money. When stocks failed and investors needed to default, the money was permenantly lost.

However, adding to the crash of '29 was the slowing economy. The desire for consumer durables (expensive items refrigerators, radios, and automobiles) went down as Americans became satisfied with what they had. This in turn affected the companies and workers that produced these items. A downward spiral was set in motion.

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Originally posted by dreamtrove:
What this theory lacks is evidence, not that I have evidence to the contrary, but where do you find this data?

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Here is a large set of data showing income distribution in the USA since 1900. If you look at the top 0.01% (for example) you will see that the current distribution is approaching levels not seen since 1928. www.nber.org/data-appendix/w8467/w8467-app.pdf

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