Approach
Since not only laymen but also experts in this field are talking about the chance of another Great Depression, I’m going to start my work examining the course of the Great Depression of the 1930s. Then I also want to take a glance at the depression of 1837, since it shows up a different way of dealing with a depression of major significance. Finally, after having dealt with these two crises, I want to see which aspects regarding both the causes of the depressions and the reactions to them that could also apply to the current Financial Crisis.
With good reason I will especially concentrate on banking and the Federal Reserve System and determine where the flaws of the whole system are. To find out some of the mistakes that were done during the 1920s and 1930s I will mainly refer to Thomas J. DiLorenzo’s “How Capitalism Saved America”, which includes two chapters about what went wrong before and during the Great Depression.
Furthermore, I’m going to evaluate the different actions and ideas of politics during the Financial Crisis regarding their practicability, their prospects of succeeding and their fairness to different groups of people. Here I will refer to several newspaper articles and Henry Hazlitt’s “Economics in one lesson”. Finally I will discuss how such crises might be prevented in the future.