By Thomas Sowell, Brief, Patriot Post, Vol. 08 No. 31, 28 July 2008

Markets were also blamed for the Great Depression of the 1930s and New Deal politicians were credited with getting us out of it. But increasing numbers of economists and historians have concluded that it was government intervention which prolonged the Great Depression beyond that of other depressions where the government did nothing. The stock market crash of 1987 was at least as big as the stock market crash in 1929. But, instead of being followed by a Great Depression, the 1987 crash was followed by 20 years of economic growth, with low inflation and low unemployment. The Reagan administration did nothing in 1987, despite outrage in the media at the government’s failure to live up to its responsibility, as seen in liberal quarters. But nothing was apparently what needed to be done, so that markets could adjust. The last thing politicians can do in an election year is nothing. So we can look for all sorts of ‘solutions’ by politicians of both parties. Like most political solutions, these are likely to make matters worse.”