10 Myths About FDR and The Great Depression
6. Speculation Caused the Crash
While reckless speculation on the stock market undoubtedly contributed to the great crash, it was not the only factor. Government policies which kept interest rates low and encouraged reckless borrowing and lending were at the heart of the speculation crisis. In addition, economists of the Austrian school believe that government manipulation of the money supply via the Federal Reserve contributed to volatile economic conditions. The truth is a few greedy bankers on Wall Street did not cause the stock market to crash in 1929, a combination of reckless government policies created an environment ripe for exploitation and failure. The commonly held belief points the finger of blame at free market activity in an attempt to justify government intrusion and regulation of the economy.
