Krugman: Republicans demand disaster when they're not listened to, because Atlas Shrugged

[ErikJ]

16. Thanks for interesting link to Mellonesque-Liquidation.

Great Depression[edit]

Mellon on US stamp
Mellon became unpopular with the onset of the Great Depression. Herbert Hoover, in memoirs published decades later, wrote that Mellon advised him as President to "liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate... it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people." Hoover claimed credit for disregarding this advice and intervening in the market, though with little success.[14] There is no corroboration that Mellon ever said such a thing, however, and the claim that he did is inconsistent with his published speeches, which supported anti-recessionary measures by the Federal Reserve. As Treasury Secretary, Mellon was an ex-officio member of the Federal Reserve Board. There successfully urged the Fed to cut its discount rate after the stock market crash in October 1929, and supported subsequent rate cuts. [15] In November 1929, he recommended a cut of 1 percentage point in personal and corporate income tax rates. He supported Hoover's proposal to increase federal construction spending as an antirecession measure. [1]

In 1929–31, Mellon spent much of the time overseas, negotiating for repayment of European war debts from World War I. In 1928 Mellon issued a denial to allegations made by a speaker for the Democratic Party in North Carolina that he held an interest in a liquor distillery, and that he was the largest distiller in the world prior to Prohibition. In a letter written to the Republican executive committee of Mecklenburg County, North Carolina, Mellon admits having stock in a distillery, but that he had disposed of all interest in the company prior to becoming Secretary of the Treasury.[16]