The Great Depression: America, 1929–1941
The Great Depression: America, 1929–1941 () is a 1984 history of the Great Depression by acclaimed historian Robert S. McElvaine. In this interpretive history, McElvaine discusses the causes and the results of the worst depression in American history, covering the time from 1929 to 1941. He examines the causes of this cataclysmic event, its impact upon the American people, and the political, governmental, and cultural responses to it. He comes down firmly in favor of the "demand-side" argument that maldistribution of income in the 1920s having left the bulk of potential consumers with too small a share of national income to buy all that mass production was putting on the market was the principal cause of the collapse. Building on his innovative use of letters written by "ordinary" Americans during the Depression that were collected in his first book, "Down and Out in the Great Depression", McElvaine takes readers into the experience of Depression victims to an extent never before achieved.
Causes of the Great Depression
Keynes argued that if the national government spent more money to help the economy to recover the money normally spent by consumers and business firms, then unemployment rates would fall. The solution was for the Federal Reserve System to "create new money for the national government to borrow and spend" and to cut taxes rather than raising them, in order for consumers to spend more, and other beneficial factors. Hoover chose to do the opposite of what Keynes thought to be the solution and allowed the federal government to raise taxes exceedingly to reduce the budget shortage brought upon by the depression. Keynes proclaimed that more workers could be employed by decreasing interest rates, encouraging firms to borrow more money and make more products. Employment would prevent the government from having to spend any more money by increasing the amount at which consumers would spend. Keynes' theory was then confirmed by the length of the Great Depression within the United States and the constant unemployment rate. Employment rates began to rise in preparation for World War II by increasing government spending. "In light of these developments, the Keynesian explanation of the Great Depression was increasingly accepted by economists, historians, and politicians".