Paul Krugman: "The answer, basically, is Big Government...."
The loose end in Krugman's article is why there weren't more Great Depressions back in the old days, before big government. The answers, I think, are two:
Business cycles are a disease of the post-agricultural economy--of the nonfarm economy. If you look back at the nonfarm unemployment rate before 1930, things look not as bad as the Great Depression but still pretty bad.
Most countries had a form of "big government"--a military large in size relative to its nonfarm economy and an activist, interventionist central bank--reaching far back into the past.
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