The stock market crash of 1937

This is a notable event because it is the second worst crash in US history, and one not anticipated by that famous economist John Maynard.  (The worst was not in 1929, but 1930-32.)

It was apparently caused by a premature tightening of both monetary and fiscal policies.  The Keynesian doctrines had not yet become mainstream even within the advisory circles of Pres. Roosevelt.

Moral lesson for today:  Pres. Obama has to be careful in his struggle with the fiscal “orthodoxy” of the Republicans.  If he loses, there goes another crisis.

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