The 1937 Recession That Hit During a Recovery

In 1937, the US economy was finally climbing out of the Great Depression. Then it fell off a cliff. This episode unpacks the 'recession within a depression' — how FDR's policy pivot, premature austerity, and Fed tightening snuffed out a recovery that was just finding its footing. We look at the specific trigger: the Federal Reserve doubling reserve requirements in 1936 and 1937, and the Treasury's simultaneous move to sterilize gold inflows. Why did policymakers think tightening was safe? And what does 1937 teach us about withdrawing stimulus too early — a lesson that haunted the 2009 recovery debates and still echoes in fiscal policy today. Lucas and Luna walk through the numbers, the personalities (Marriner Eccles, Henry Morgenthau), and the bitter irony of a depression within the Depression. #GreatDepression #1937Recession #FDR #FederalReserve #MarrinerEccles #HenryMorgenthau #FiscalPolicy #MonetaryPolicy #Austerity #NewDeal #ReserveRequirements #GoldInflows #DepressionWithinDepression #EconomicHistory #Economics #FexingoBusiness #BusinessPodcast #LessonsFromHistory Keep every episode free: buymeacoffee.com/fexingo