From Thomas Sowell’s Intellectuals and Society

“In short, many things that the Federal Reserve, Congress and the two Presidents did (during the market crash of 1929) were counterproductive.  Given these multiple failures of government policy, it is by no means clear that it was the market economy which failed.  There is of course no way to re-run the stock market crash of 1929 and have the federal government let the market adjust on its own to see how that experiment would turn out.  The closest thing to such an experiment was the 1987 stock market crash, similar in size but not in duration to the 1929 collapse.  The Reagan administration did nothing, despite outrage in the media at the government’s failure to act.”

“What will it take to wake up the White House?” the New York Times asked, declaring that ‘the President abdicates leadership and courts disaster.”  Washington Post columnist Mary McGrory said that Reagan “has been singularly indifferent” to the country’s “current pain and confusion.”  The Financial Times of London said that President Reagan “appears to lack the capacity to handle adversity” and “nobody seems to be in charge.”  A former official of the Carter administration criticized President Reagan’s “silence and inaction” following the 1987 stock market crash and compare him unfavorably to President Franklin D. Roosevelt, whose “personal style and bold commands would be a tonic” in the current crisis.”

“The irony in this was that FDR presided over an economy with seven consecutive years of double-digit unemployment, while Regan’s policy of letting the market recover on its own, far from leading to another Great Depression, led instead to one of the country’s longest periods of sustained economic growth, low unemployment and low inflation, lasting twenty years.”