In 1959, during an interview with the late Mike Wallace, Ayn Rand, the author of “Atlas Shrugged”, said “A free market will not break down. All depressions are caused by government interference and the cure that is always offered is more of the same poisons that caused the disaster.”
After the stock market crashed on October 29, 1929, the government’s solution to the crisis was to raise the top tax rate from 25% to 63%. Successively this was increased to 79% and then to 94%, effectively choking off capital formation, investment, and the incentive to start new businesses.
Not until World War Two broke out in Europe in 1939 and threatened the security of the United States and its allies did Franklin D. Roosevelt reverse his failed policies that had stretched out the Depression, turning to private enterprise to build the airplanes, tanks, and guns that would be needed to defeat the Axis powers and, in 1941, the Empire of Japan. Capitalism saved America.
America suffered a little known shock to its economy on September 15, 2008, just a month and a half shy of Election Day, when around 11 AM the Federal Reserve noted a tremendous draw down of money market accounts in the nation to the tune of $550 billion dollars in just over an hour or so. The decision was made to close the accounts. Had they not done that, the Reserve estimated that by 2 PM the entire economy of the nation would have collapsed. Within 24 hours, the world economy would have followed.
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