Do you remember where you were?

I mean, do you remember where you were in October 1929?

The Brits usually do this better than we do: some comic relief while the financial crisis continues to lurch forward. It's impossible to get through these things without some gallows humor.

There's no stopping Biden's gaffe-o-matic:

When the stock market crashed, Franklin Roosevelt got on the television and didn't just talk about the princes of greed," Biden told [Katie] Couric. "He said, 'Look, here's what happened."

'Cuz when the stock market crashed in 1929, FDR had already become president, and there was a television in every living room -- really :) There's a real point there, somewhere: the level of political eloquence and plain-speaking has, on the whole, dropped noticeably since then. And it's not a forte of our current president or, actually, almost any of our current politicos.

But this brings up a more serious point. Another one of those encrusted, hoary myths is that the 1929 stock market crash "caused" the Great Depression, even though the American economy wasn't in depression territory before 1932. It was, however, already in recession at the end of 1928, according the the National Bureau of Economic Statistics, founded in 1920, an outgrowth of the World War One era's burgeoning interest in statistics and planning.

It would be more accurate to say that the stock market in late 1929 was, relative to an economy already in recession, wildly overvalued by speculative excess (by a factor of about six to eight, an overvaluation not seen since then). The crash was a sharp correction to that overvaluation.

Meantime, what was a severe recession need not have become the "Great" Depression. It didn't, for example, in Britain and France. But the string of bank failures that started in late 1930 ensured that it would. By early 1933 (when Roosevelt actually became president), one US bank in three was shut. Following exactly the wrong policy, the Federal Reserve caused the money supply to contract by about a third, and a severe deflation followed (about a 40% drop in prices), ruining debtors -- like home mortgagors.* Instead of keeping their money in banks, people started putting it under mattresses, where it did no good.

It's not so much that these monetary and banking failures caused the Great Depression; they were the Great Depression. Of course, they caused more negative developments, like 26% peak unemployment, and prompted governments in reaction to essentially shut down international trade and raise taxes in a vain attempt to balance their budgets -- making everything even worse.

POSTSCRIPT: Why do these financial crashes seem to happen in the autumn? Is it the falling leaves, perhaps? The end of summer and intimations of mortality?

POST-POSTSCRIPT: The cure has been found for wild financial market behavior: estrogen. Seriously: that, plus some old guys.
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* Deflation is hell on debtors: they have to pay back fixed money amounts in dollars that are worth more and more each day that passes. Creditors love deflation for just that reason.

Conversely, debtors love inflation: they pay back fixed money amounts in dollars that are worth less and less as time passes. Creditors, and indeed, investors and savers generally, hate inflation for the same reason.

The conflict between debtors and creditors is one of the great perennials, a key "class conflict," if you like, in American history, going back to the days of Hamilton and Jefferson.