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The Truth About the Great Depression: How Big Government Made It Worse
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White Paper Series Title: "Reviving America: A Supply-Side Blueprint for Economic Freedom"

Part 1:
The Great Depression Revisited: How Government Intervention Created a Crisis and How Supply-Side Economics Could Have Prevented It

Author: the Conservative TAKE contributor
Date: April 9, 2025
Prepared for: Advocates of Free Markets, Fiscal Sanity, and American Prosperity

Executive Summary

This paper challenges the mainstream narrative that the Smoot-Hawley Tariff was the primary cause of the Great Depression. While tariffs worsened global trade conditions, they weren’t the root cause of the Great Depression. The real problem was timing, imposing high tariffs during a fragile economic downturn was bad policy. Not because tariffs are inherently harmful, but because they were stacked on top of monetary collapse and collapsing confidence. In a stronger economy, they might’ve been manageable. But in 1930, they added fuel to a fire already lit by the Federal Reserve and government overreach.

The evidence shows that monetary mismanagement by the Federal Reserve, destructive tax and regulatory policy, and massive expansion of government intervention, particularly through FDR’s New Deal, were the primary drivers of the Depression’s depth and duration.

From a supply-side economics perspective, the Depression was a predictable outcome of bad policy, not a failure of capitalism. This paper draws on the work of Milton Friedman, Anna Schwartz, Robert Higgs, and others to show how America could have avoided the Depression altogether if it had stayed true to limited government, sound money, and free markets.

I. The Real Causes of the Great Depression

A. Federal Reserve’s Catastrophic Monetary Policy (1929–1933)

According to Milton Friedman and Anna Schwartz in A Monetary History of the United States (1963), the Federal Reserve contracted the money supply by nearly one-third from 1929 to 1933. This was not a market failure; it was government incompetence.

  • The Fed raised interest rates in 1928–29 to curb stock speculation—too tight, too fast.

  • After the crash, it failed to act as a lender of last resort, letting thousands of banks collapse.

  • The result was a deflationary spiral—prices fell, wages fell, debts became unpayable.

Quote from Friedman:

“The Depression was the consequence of a monetary contraction by the Federal Reserve System that started in 1929 and continued until early 1933.”

This destruction of liquidity dried up investment and demand not because people stopped spending, but because the Fed sucked money out of the economy.

B. The Smoot-Hawley Tariff: Scapegoat, Not Catalyst

The Smoot-Hawley Tariff Act (1930) raised tariffs on over 20,000 imported goods. Keynesians and leftists love to blame it, but the data and historical timeline show it was not the trigger.

Facts:

  1. Stock Market Crash (October 1929) happened before Smoot-Hawley passed.

  2. International trade was only about 7% of U.S. GDP—not enough to collapse the economy.

  3. Yes, retaliatory tariffs hurt exports, but domestic spending and employment were already falling before the tariff was enforced.

  4. The Depression worsened after massive monetary contraction, not immediately after tariffs.

Sources:

  • Barry Eichengreen, Golden Fetters (1992) – notes that countries that stayed on the gold standard suffered worse declines than those that devalued.

  • Douglas Irwin, Peddling Protectionism (2011) – shows Smoot-Hawley had limited macroeconomic impact compared to monetary and fiscal errors.

Conclusion: Tariffs were poorly timed policy during an already fragile economic moment—not because tariffs are inherently bad, but because they added pressure when the real crisis was being driven by monetary collapse and federal mismanagement. In a healthier context, strategic tariffs can protect national interests, but in 1930, they were gasoline on a fire lit by the Federal Reserve and big-government overreach.

C. Fiscal Folly: Hoover and Roosevelt Raised Taxes

Both Herbert Hoover and Franklin Roosevelt increased taxes during a depression, which killed recovery.

  • Revenue Act of 1932 (Hoover): Raised top income tax from 25% to 63%

  • Revenue Acts of 1935, 1936, and 1937 (FDR): Introduced wealth taxes, corporate taxes, dividend taxes

  • This drained private capital from the economy, reducing business investment and job creation.

Source: Alvin Hansen, Fiscal Policy and Business Cycles (1941) – admits New Deal taxes slowed recovery.

D. FDR’s New Deal: Central Planning, Not Recovery

FDR’s New Deal was not stimulus. It was economic micromanagement. It introduced policies that froze markets, punished producers, and rewarded political allies.

Key Failures:

  1. National Industrial Recovery Act (NIRA, 1933)

    • Created cartels, set wages and prices by government decree

    • Crushed competition and was ruled unconstitutional in Schechter Poultry Corp. v. U.S. (1935)

  2. Agricultural Adjustment Act (AAA)

    • Paid farmers to destroy crops and livestock to raise prices

    • Starved the poor and created artificial scarcity

  3. Wagner Act (1935)

    • Empowered unions to demand higher wages, reducing employment

    • Small businesses couldn’t afford the mandates

  4. Public Works and Relief Programs

    • Created temporary jobs with no lasting value

    • Replaced private enterprise with government dependency

Robert Higgs in Crisis and Leviathan (1987) called this “regime uncertainty”—businesses froze hiring and investment because they feared more regulation, taxes, or seizures.

E. Empirical Evidence: The Recovery That Never Came

  • Unemployment never fell below 14% during the entire 1930s.

  • Private investment did not return to pre-1929 levels until after World War II.

  • GDP growth was artificially propped up by government spending, not private production.

FDR’s own Treasury Secretary, Henry Morgenthau, testified before Congress in 1939:

“We have tried spending money. We are spending more than we have ever spent before and it does not work... we have just as much unemployment... and an enormous debt to boot.”

II. How Supply-Side Economics Would Have Prevented It

A. Maintain a Stable Money Supply

  • Friedman’s rule: Keep monetary growth predictable and moderate.

  • No deflationary spiral, no bank panics, no wipeout of savings.

B. Cut Taxes to Encourage Production

  • Reward work, savings, and investment.

  • Let entrepreneurs rebuild without fear of confiscation.

C. No Price Controls, No Central Planning

  • Prices are signals. Government has no business setting them.

  • Let markets clear. Let competition allocate resources efficiently.

D. Poorly Timed Tariffs, Not the Idea of Tariffs Themselves

  • The economy was already collapsing due to deflation, falling demand, and tight Federal Reserve policy.

  • Tariffs added fuel to the fire by straining international trade right when global cooperation was needed most.

  • The Federal Reserve failed to respond, allowing monetary contraction and bank failures to continue unchecked.

  • Tariffs in a strong economy can protect key industries, but in a fragile economy, they can deepen a crisis.

  • Instead of protecting markets, Smoot-Hawley isolated them, damaging U.S. exports and worsening the downturn.

III. In the end... Freedom, Not Central Planning, Leads to Recovery

The Great Depression was not a failure of capitalism. It was a failure of interventionism. The Federal Reserve choked the money supply. Politicians raised taxes and stifled business. And FDR’s New Deal created a decade of stagnation, not salvation.

Had America followed the supply-side blueprint—low taxes, stable money, and limited government—the Depression would have been a short, sharp correction, not a prolonged disaster.

Key Sources 

  • Friedman, Milton & Schwartz, Anna J. A Monetary History of the United States, 1867–1960 (Princeton University Press, 1963)

  • Higgs, Robert. Crisis and Leviathan (Oxford University Press, 1987)

  • Irwin, Douglas A. Peddling Protectionism: Smoot-Hawley and the Great Depression (Princeton University Press, 2011)

  • Powell, Jim. FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression (Crown Forum, 2003)

  • Rothbard, Murray N. America’s Great Depression (Ludwig von Mises Institute, 2000 edition)

  • Eichengreen, Barry. Golden Fetters (Oxford University Press, 1992)

  • Morgenthau Diaries and Congressional Testimony (1939)


    In Part 2, tommorrow, we show how Reagan reversed 1970s stagnation with bold tax cuts, deregulation, and pro-growth policies, proving the power of supply-side economics in real time.

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Lafayette: The Fire and the Fog

Act 1: Foundations and Fault Lines

In a quiet chateau nestled in the green hills of Auvergne, a boy was born into a name older than most nations. Marie-Joseph Paul Yves Roch Gilbert du Motier—known simply as Gilbert to those who loved him—would grow to be one of history’s most celebrated revolutionaries. But from the very start, Lafayette's world was one of contradictions.

He was born into nobility, yet surrounded by stories of poverty and loss. His father, a decorated grenadier, was killed by a British cannonball before Lafayette ever saw his face. His mother, devastated by grief, fled to Paris, leaving young Gilbert to be raised by his stern but kind grandmother in the countryside. She taught him duty, discipline, and stories of battlefield glory. Under the watchful eyes of abbés and aristocrats, Lafayette soaked in the values of the French Enlightenment. Reason, liberty, the rights of man—these became the drumbeat of his youth.

But knowledge alone doesn’t make a man wise.

From the halls of Paris to the salons of Versailles, Lafayette learned to charm and maneuver. He married Adrienne de Noailles, a fourteen-year-old girl from one of France’s most powerful families. At sixteen, Lafayette was rich, married, and well on his way to joining the king’s elite guard. But behind the courtly elegance, something restless stirred in his heart. He longed for purpose—glory, as he called it. The kind that would echo through time.

So when whispers of rebellion across the Atlantic reached his ears, he was enthralled. America, a land fighting for liberty against the British—the very empire that had taken his father—became an obsession. Even when King Louis XVI forbade it, Lafayette defied him, sneaking across the sea to join George Washington’s struggling army.

From a worldly point of view, it was heroic. A young man leaving behind wealth, a pregnant wife, and privilege to fight for strangers. But beneath the idealism, there was a flaw—a subtle one, but dangerous.

Lafayette believed that man could save himself.

Through reason. Through revolution. Through liberty unanchored from any higher truth.

He didn’t yet understand what the Bible makes clear: that the heart of man is “deceitful above all things” (Jeremiah 17:9), and that liberty without virtue is just another form of chaos. Lafayette loved the idea of freedom, but he lacked a framework that could keep that freedom from becoming an idol. He was, in many ways, a knight in search of a cause—but without a compass pointing to God's moral order.

While Lafayette crossed the Atlantic in search of glory, Adrienne was left behind in Paris, pregnant and alone. She received glowing letters—tales of cannons and courage—but little concern for her own trials. She had married a boy still chasing the ghost of a father he barely knew.

In America, Lafayette was welcomed… reluctantly. The Continental Congress had seen too many glory-seeking Europeans hoping to play general. At first, they dismissed him. But when Lafayette offered to serve without pay, and when they read letters of praise from Benjamin Franklin, they reconsidered. Lafayette was given the honorary title of major-general—though he would command no troops.

He met George Washington soon after, and an unexpected friendship blossomed. Washington, a man of discipline and restraint, took the fiery Frenchman under his wing. Lafayette found in Washington a father figure, and in the American cause, a sense of belonging.

But even as Lafayette fought bravely in battle—earning respect and even suffering wounds—he never stopped chasing applause. And back in France, Adrienne suffered silently, raising children alone, enduring gossip about Lafayette’s rumored mistresses, and using her influence to protect his reputation.

She loved him. He often forgot to love her in return.

The story of Lafayette was already being written in two parallel threads: the public hero, adored on two continents, and the private man, blind to the cost others paid for his ambitions.

Even his noblest efforts—his fight for liberty, his calls to end slavery, his dreams of global reform—were built on a foundation that was subtly cracked.

He believed, as many Enlightenment thinkers did, that humanity was basically good, that progress was inevitable, and that the right ideas could fix the world.

But history—and Scripture—tell a different story.

"Unless the Lord builds the house, the builders labor in vain." (Psalm 127:1)

Lafayette’s foundation was bold. But it wasn’t biblical.

And the storm was coming.

Let me know if you're ready for Act 2: Fallout and Fractures. It will dive into the French Revolution, betrayal from both sides, Adrienne’s suffering, and the unraveling of Lafayette’s ideals.


Act 2: Fallout and Fractures


The smell of smoke lingered in the Paris air. The Bastille had fallen. The people roared. The king trembled. And in the center of it all stood Lafayette—beloved by some, cursed by others, and no longer sure who he truly was.

 

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Slavery, Union, and Constitutional Compromise: A Study of the Crittenden Compromise and the Corwin Amendment (1860–1861)

Abstract

This article explores two major political proposals advanced in the final months before the American Civil War: the Crittenden Compromise (1860) and the Corwin Amendment (1861). Both efforts sought to preserve the Union through constitutional concessions on slavery. We examine their content, motivations, political support and opposition, and how they reflected  (and ultimately failed to resolve) the irreconcilable tensions between North and South. Special attention is given to the evolving role of President-elect and later President Abraham Lincoln, whose principled opposition to slavery’s expansion shaped Republican resistance to compromise efforts. The article situates these proposals within a broader constitutional framework of federalism, natural rights, and the limits of amendment power.

I. Introduction

In the months following Abraham Lincoln’s election in November 1860, the United States faced an unprecedented crisis. Southern states began seceding from the Union, fearing that a Republican administration would restrict or abolish slavery. As secessionist sentiment grew, Congress and national leaders proposed several last-ditch efforts to avoid civil war through constitutional compromise. Among the most notable were the Crittenden Compromise, introduced in December 1860, and the Corwin Amendment, proposed in early 1861. Though differing in scope and content, both proposals reflect the extent to which the federal government was willing to entrench slavery in constitutional law in hopes of maintaining Union.

II. The Crittenden Compromise

A. Background and Purpose

On December 18, 1860, Senator John J. Crittenden of Kentucky introduced a series of six proposed constitutional amendments and four congressional resolutions, collectively known as the Crittenden Compromise. Crittenden, a member of the Constitutional Union Party, sought to calm Southern fears and avert secession by providing federal guarantees for slavery.

B. Main Provisions

The core elements of the compromise included:

  • A constitutional amendment reinstating the Missouri Compromise line (36°30′ N latitude), permanently prohibiting slavery north of the line and guaranteeing it south of the line in current and future U.S. territories (U.S. Senate Journal, 36th Cong., 2nd Sess., 1860).

  • A prohibition on Congress interfering with slavery in states where it already existed.

  • A federal guarantee for enforcement of fugitive slave laws.

  • A requirement that future constitutional amendments could not abolish or interfere with slavery in slaveholding states.

C. Reception and Defeat

The Crittenden Compromise was broadly supported by Southern politicians and some Northern moderates, but strongly opposed by Republicans, including Lincoln, who rejected any compromise that would allow the expansion of slavery into new territories. Through backchannels and private correspondence, Lincoln discouraged Republican senators from supporting the proposal (Basler, Collected Works of Abraham Lincoln, Vol. 4, p. 152).

The compromise ultimately failed in committee in January 1861, and its defeat accelerated Southern secession.

III. The Corwin Amendment

A. Introduction and Legislative History

In the aftermath of the Crittenden proposal’s failure and with several states having already seceded, Representative Thomas Corwin of Ohio introduced a new constitutional amendment intended to reassure the South. The Corwin Amendment passed the House on February 28, 1861, and the Senate on March 2, 1861, just days before Lincoln’s inauguration.

The proposed text read:

“No amendment shall be made to the Constitution which will authorize or give to Congress the power to abolish or interfere, within any State, with the domestic institutions thereof, including that of persons held to labor or service by the laws of said State.”
— Congressional Globe, 36th Cong., 2nd Sess. (1861)

B. Purpose and Scope

Unlike the Crittenden Compromise, which addressed slavery in territories, the Corwin Amendment focused exclusively on preserving slavery in existing states, permanently prohibiting Congress or any future constitutional amendment from interfering with state domestic institutions, including slavery.

It was a more limited proposal, intended as a symbolic assurance to slave states that the federal government would not abolish slavery where it existed, even under future administrations.

C. Lincoln’s Position

Though a longtime opponent of slavery’s expansion, Lincoln endorsed the Corwin Amendment in his first inaugural address on March 4, 1861:

“I have no objection to its being made express and irrevocable.”
— Abraham Lincoln, First Inaugural Address (1861)

Lincoln directed Secretary of State William Seward to send the amendment to the states for ratification. Some states, including Ohio and Maryland, ratified it, but the amendment never achieved the necessary approval from three-fourths of the states, especially as war broke out shortly after.

IV. Comparative Analysis

FeatureCrittenden CompromiseCorwin Amendment
ProposedDec 1860Feb–Mar 1861
ProposerSen. John Crittenden (KY)Rep. Thomas Corwin (OH)
Key ObjectiveAllow slavery south of 36°30′ in territoriesConstitutionally prohibit federal interference with slavery in states
Lincoln’s ViewOpposedSupported (as peace gesture)
StatusRejected in committeePassed Congress; unratified
Amendment NatureMultiple amendments and resolutionsSingle proposed amendment
Historical ResultFailed to prevent secessionSuperseded by Civil War and 13th Amendment


V. Constitutional and Originalist Considerations

A. Federalism and State Sovereignty

The Corwin Amendment affirmed the federalist structure of the Constitution, where states retained authority over domestic institutions, including slavery. Its logic aligned with the Madisonian view that powers not delegated to the federal government remained with the states (see Federalist No. 45).

B. Limits on Constitutional Amendment Power

The Corwin Amendment attempted to shield certain subjects from future amendment. Although Article V allows for limitations (as with the equal suffrage of states in the Senate), many legal scholars debate whether any constitutional amendment can permanently bar future amendments. This raises complex issues about constitutional entrenchment.

C. Slavery and the Founding Vision

The Crittenden and Corwin proposals represent divergent paths in response to a growing national crisis. While the Founding generation accepted slavery as a temporary evil (e.g., Madison at the Constitutional Convention), these 1860–1861 efforts reflect a move to permanently constitutionalize an institution many of the founders viewed as incompatible with natural rights.

VI. Conclusion

Both the Crittenden Compromise and the Corwin Amendment reveal the lengths to which American politicians were willing to go to preserve the Union through accommodation of slavery. However, their failure also underscores the irreconcilability of a republic founded on liberty with a system built on bondage. Abraham Lincoln’s careful balancing act was opposing slavery’s expansion while tolerating its existence where entrenched, framed the constitutional limits of compromise.

With the firing on Fort Sumter on April 12, 1861, the era of compromise ended. The actual 13th Amendment, ratified in 1865, would abolish slavery entirely,  reversing the direction of both earlier proposals and reaffirming the Declaration’s principle that all men are created equal.

Sources

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The Prophet of Progress: Woodrow Wilson's Road to Power and Ruin

Act I: Foundations and Fault Lines


Thomas Woodrow Wilson was born in 1856 into a deeply religious Southern Presbyterian family. His father, Joseph Ruggles Wilson, was a respected minister and educator. His mother, Janet—called Jessie—was a devoted Scottish churchwoman. From the outside, the Wilson home seemed soaked in Scripture and tradition, but beneath the surface, a different foundation was quietly forming.

As a boy, “Tommy” Wilson was clever but struggled to read until age twelve—what today might be considered dyslexia. Still, he grew to admire ideas and institutions more than people. Though he spent his childhood in the Confederate South during the Civil War, the conflict seemed to leave little mark on him emotionally. His loyalties remained Southern, though, and he absorbed the white supremacist thinking that had gripped post-war Democratic circles.

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