“Why did the country sink further into depression [after the stock market crash]?  Farmers and coal workers had suffered all through the 1920s from low prices, and the farmers were the first group in the 1930s to plunge into depression.  But other economic sectors also lurched out of balance.  Two percent of the population received about 28 percent of the national income, but the lower 60 percent got only 24 percent.  Businesses increased profits while holding down wages and the prices of raw materials.  This pattern depressed purchasing power.  Workers, like farmers, did not have the money to buy the goods they helped to produce.”

Hmmm.  After dismissing plans to systemically remove this section from the textbook of every student, I put together a very brief overview of the Austrian business cycle and presented this version to the students as my lecture on the subject.

As juniors in high school, most of my students are economic novices.  That is to say, both explanations were drawn onto a tabula rasa.  The overwhelming comment from my classes centered on two stark realities: 1) “we’ve already discussed similar economic downturns previously and this one sounded very similar” (ergo why didn’t we learn); 2) “this sounds a lot like toda” (ergo why didn’t we learn).  Ironically, Mises had a daily article yesterday about the economic downturn in 1819, following a similar theme.

Generally, the Austrian theory appealed to most students.  As we move into the New Deal, most students will struggle with the idea that the government cannot be a savior.  As our textbook will trump the various New Deal program up, I will balance it with Hazlitt’s first chapter (the lesson).

In hard times, insolvent debtors are a large class.  They constitute an interest and are able to attract public attention, so that social philosophers discuss their troubles and legislatures plan measures of relief.  Insolvent debtors, however, are an insignificant body when compared with the victims of commonplace misfortune, or accident, who are isolated, scattered, ungrouped and ungeneralized, so are never made the object of discussion or relief.  In seasons of ordinary prosperity, persons who become insolvent have to get out of their troubles as they can.  They have no hope of relief from the legislature.  The number of insolvents during a series of years of general prosperity, and their losses, greatly exceed the number and losses during a special period of distress.

Indeed these are the forgotten men, of as Sumner corrects, the man who is never thought of.

Who are the forgotten men of 2009?