Wednesday, December 17, 2014 | 5:30 PM to 7:00 PM
The administrations of Woodrow Wilson and Warren G. Harding met a sharp contraction in output and employment by seeming to ignore it. In response to a virtual halving of commodity prices, and a more than 40% decline in stock prices, the government balanced the budget and (through the newly-instituted Federal Reserve System) raised, not lowered, interest rates. Yet, 18 months after the business cycle peak, the depression officially ended. Given these seemingly self-defeating policies, why did it ever end?
James Grant, financial journalist and historian, is the founder and editor of Grant’s Interest Rate Observer, a twice-monthly journal of the investment markets. He is, in addition, the author of five books on finance and financial history: Bernard M. Baruch: The Adventures of a Wall Street Legend (Simon & Schuster, 1983), Money of the Mind (Farrar, Straus & Giroux, 1992), Minding Mr. Market (Farrar, Straus & Giroux, 1993) and The Trouble with Prosperity (Times Books, 1996) and Mr. Market Miscalculates (Axios Press, 2008). John Adams: Party of One, a biography of the second president of the United States, was published in March 2005 by Farrar, Straus & Giroux as well as Mr. Speaker! The Life and Times of Thomas B. Reed, the Man Who Broke the Filibuster (Simon & Schuster). His new book, The Forgotten Depression, 1921: the Crash that Cured Itself, will be published in the fall by Simon & Schuster.