Wednesday, September 28, 2011

Road construction ended the depression

The timeline is simple.  Hoover started to standardize American roads and build them with state-federal cooperation.  Roosevelt continued and expanded another 500,000 of paved roads.   Once we had roads, cars worked and the economy became uncongested.

Cause of the congestion?  Mass marketing  by broadcast radio, they congested America's downtowns; instantly and an immediately crashing the economy.  Technology shock of commercial radio.

What does this have to to with demand collapse?  Buying a chair could involve a one hour wait in traffic. Hence, the lower the price the more congestion, a reverse sloping demand curve. Economics is always about waiting in line.

Seems obvious to me. Most of the rest of the depression was the usual economists running around in hysterics.

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