The Forgotten Depression
1921: The Crash That Cured Itself

James Grant's story of America's last governmentally untreated depression: A bible for conservative economists, this "carefully researched history . . . makes difficult economic concepts easy to understand, and it deftly mixes major events with interesting vignettes"—The Wall Street Journal. In 1920-1921, Woodrow Wilson and Warren G. Harding met a deep economic slump by seeming to ignore it, implementing policies that most twenty-first century economists would call backward. Confronted with plunging prices, wages, and employment, the government balanced the budget and, through the Federal Reserve, raised interest rates. No "stimulus" was administered, and a powerful, job-filled recovery was under way by late 1921. Yet by 1929, the economy spiraled downward as the Hoover administration adopted the policies that Wilson and Harding had declined to put in place.