Bob Murphy has a great write-up over at the Campaign for Liberty about Misunderstanding the Causes of the Great Depression. Was the Great Depression caused by the stock market crash of 1929? Did capitalism fail?

As I said above, this decade-long slump was not the fault of a stock market crash, or even the malinvestments of the 1920s caused by the new Fed. A relatively free market can handle huge disruptions. E.g. if an asteroid smashed into Chicago in 1929, that might have caused a sharp economic downturn too, but it wouldn't have caused double digit unemployment 10 years later.

So what did cause the severity and length of the Great Depression? The New Deal. (And let's realize too that Herbert Hoover was no laissez-faire guy; he did a New Deal-lite in the latter half of his presidency, and bragged about his ignoring the "liquidationist economists" on his stump speeches running against FDR.)

The New Deal represented the most comprehensive "war on depression" ever waged by the US government. And, just like the War on Drugs and the War on Terror(ism), the war on depression waged by FDR gave us the worst depression in US history.

The entire post is well worth the read.

Meanwhile, back in 2008, Ron Paul has posted 5 short videos on the State of the Economy:

On Restoring Confidence in the Markets

On Market Intervention

On the End of Capitalism?

On Safety Nets

On Capital and Capitalism