Boom-busts were a feature of markets. Under consumption caused the depression. WWII ended the Great Depression. All three Keynesian beliefs were inaccurate. Only the Austrian Business Cycle Theory got it right.
Artificially lowered interest rates mislead investors. The Federal Reserve’s policy of cheap money creates mal-investments. The cause of boom-busts is this commercial credit expansion that is not backed by real pools of private savings.
Herbert Hoover’s policies prolonged the Great Depression. His agricultural policy was a disaster. Raising tariffs an average of 59% on more than 25,000 items hurt. Lots of tax increases crippled businesses. Hoover sought prosperity through central planning, as did his successor, FDR, who also knew nothing about how wealth was created.
Lecture 14 of 14 from Tom Woods' The Politically Incorrect Guide to American History lecture series.