THE FIRST NEW DEALER:

Fifteen Minutes Of Pain: New research is rewriting the story of the 1930s (Amity Shlaes, 04.30.09, Forbes)

1920s growth, it turns out, wasn't illusory; it was real real. From rising companies to low unemployment to increases in GDP, the decade was a prodigious one. The Greenspan of the period, Andrew Mellon at the Treasury, presided over a series of tax cuts that pulled the top rate on the income tax down to 25%. These rate cuts generated government surpluses. In the last years, the stock market did move too high--but certainly not high enough to cause 11 years of misery.

As for President Hoover, his tenure was marked not by laissez faire or respect for private property--indeed, Hoover had labeled property a "fetish" before he became president. The Great Engineer was in fact the Great Intervener, meddling in multiple areas, raising taxes and backing tariffs, to the economy's detriment. Mistrusting the stock market as unreal, Hoover berated short-sellers and exhorted businesses to keep wages high when they could ill afford it.

International, monetary and banking factors all played a role in creating the Depression, but the counterproductive Hoover mattered as well. As economist George Selgin has noted, the most absurd of the Hoover increases was a 2% levy on checks, which caused people to further drain money out of their bank accounts so they could pay their bills, untaxed.