The Great Depression of 1920 and the Recovery No One Remembers

In episode 33, Lucas and Luna revisit the forgotten depression of 1920-21—a severe recession that saw unemployment hit 11.7%, industrial production drop 23%, and wholesale prices collapse by 40%. Unlike the 1930s, the government slashed spending, raised interest rates, and did almost nothing. The result? A rapid V-shaped recovery. The hosts examine the mechanics: the Federal Reserve’s sharp discount rate hikes, Treasury Secretary Andrew Mellon’s spending cuts, the collapse of the postwar commodity bubble, and the dramatic wage and price adjustments that cleared labor and goods markets. They also explore why this episode has been weaponized in modern policy debates, and why the comparison with 1929 is far more complicated than advocates suggest. A tight, data-driven look at a depression that ended in 18 months—and what it does and doesn't teach us about austerity, monetary tightening, and recovery. #DepressionOf1920 #AndrewMellon #FederalReserve #PostwarRecession #VShapedRecovery #AusterityDebate #MonetaryTightening #CommodityBubble #DiscountRate #WholesalePrices #WarrenHarding #LaborMarket #EconomicHistory #Economics #BusinessPodcast #FexingoBusiness #PastRecessions #LessonsFromHistory Keep every episode free: buymeacoffee.com/fexingo