As some of you may recall, two of my first published articles are on the 1920-21 depression, so this is of some interest to me. Can't go tomorrow - I'm at home with a sick kid while mommy is away on business. The book isn't out yet so of course I haven't read it, but I found this claim of from the write up about the AEI event interesting:
"Grant considers 1920–21 to have been “the last governmentally untreated business depression in America,” yet “by late 1921, a powerful jobs-filled recovery was under way.” This history offers a sharp contrast to and skeptical look at the hyperactive central banking and regulation of our own time."The Fed wasn't active? In fact the Fed was so active during this episode that Marvin Goodfriend (formerly Richmond Fed, now Carnegie Melon) said of the events that "It is no exaggeration to say that the Fed was traumatized by its first use of interest rate policy."
It is nice he doesn't ascribe the recovery to Harding's fiscal stimulus because (1.) that came on the tax side after the recovery was underway, and (2.)... on the spending side the fiscal story is even more confusing to entertain because Wilson reduced spending much more than Harding but the timing is all wrong for people that want to make this an "expansionary austerity" story. That doesn't stop people from talking up Harding of course. I've got nothing against Harding really, I just don't think he has all that much to do with it. It's really a Fed + natural bounce-back story as far as I can tell.