The Forgotten Depression

Full Name
The Forgotten Depression: 1921: The Crash That Cured Itself

The Forgotten Depression is an extensive account of the deep economic slump of 1920–21. It tells the story of America’s last governmentally-untreated depression; relatively brief and self-correcting, it gave way to the Roaring Twenties. Grant argues that well-intended federal intervention, notably the White House-led campaign to prop up industrial wages, helped to turn a bad recession into America’s worst depression. He offers the experience of the earlier depression for lessons for today and the future. This is a powerful response to the prevailing notion of how to fight a recession.

"Mr. Grant is an excellent writer, and The Forgotten Depression is a carefully researched history of this dramatic episode. . . . Mr. Grant's chronicle makes difficult economic concepts easy to understand, and it deftly mixes major events with interesting vignettes. . . . People who believe in the inadequacy of the current macroeconomic orthodoxy will find him to be an articulate spokesman."

The Wall Street Journal

“Learned, beautifully written, and timely.”

Llewellyn H. Rockwell, Jr., Chairman, the Mises Institute

“Grant engagingly tells the tale of this extraordinary episode, which has been shoved down the memory hole because it doesn't comport with reigning economic orthodoxy.”


The Forgotten Depression is a loving tribute to laissez-faire . . . Grant pens his tale with a wry humor reminiscent of John Kenneth Galbraith in The Great Crash. . . . a timely reminder that our forebears knew of other, more efficacious, remedies to cure financial hangovers than the hair of the dog.”


“A riveting and instructive tale. . . . the depression of 1920-21 has not received the scrutiny it deserves. The instructive lesson of the story is that the federal government “met the downturn by seeming to ignore it—or by implementing policies that an average 21st-century economist would judge disastrous”—and the hands-off approach actually worked. . . . Once read, The Forgotten Depression will be hard to forget.”


“Grant unearths a forgotten depression to pose the iconoclastic argument that the government’s best response to economic turmoil is to keep its hands off. A veteran financial writer, Grant handles abstruse issues with a light touch and a sure hand, gleaning wisdom in such unexpected figures as Charles Dawes, first director of the federal budget, and Warren G. Harding.” 

Charles Rappleye, author of Robert Morris and Herbert Hoover, a Biography (forthcoming)

“Are markets self-correcting? What, if any, role should government play when the Hidden Hand falters? Even as much of the world struggles through The Great Recession, James Grant offers a libertarian dissent from interventionist dogma. You don’t have to agree with Grant’s economics to admire the rigor of his thought, the grace of his prose, or the sweep of his argument contrasting what went right in the 1920s, and wrong in the 1930s. This is a true rarity, a first-rate work of history that is as relevant as the morning headlines.”

Richard Norton Smith, author of On His Own Terms: A Life of Nelson Rockefeller and An Uncommon Man: The Triumph of Herbert Hoover

“Grant makes a strong case against federal intervention during economic downturns.”

Pittsburgh Tribune Review

“It is a matter of libertarian faith that the Great Depression was prolonged rather than alleviated by Keynesian economic policy, and Grant's intent is clear: The invisible hand reigns supreme, the market knows what's good, and government meddling usually ends badly. . . . interesting reading indeed.”

Kirkus Reviews

"[An] amusing economic history of the Progressive Era."

Publishers Weekly