[From H. L. Mencken, “What Is Going On In the World”, The American Mercury, March, 1932.]
“The psychic effect of the depression, it seems to me, is generally a good one. It has made multitudes distrust such charlatans as Hoover and [Secretary of the Treasury Andrew W.] Mellon who were quite willing, three years ago, to credit them with the magic of saints and archangels. It has busted a long line of popular wizards, running from Henry Ford to [head of Bethlehem Steel] Charlie Schwab, and from [economist] Irving Fisher to [newspaper editor] Arthur Brisbane, all of them as hollow as jugs. It has taught people the difference between speculative values and real values. It has hastened the death of sick industries, and proved the vigor of sound ones. It has blown up the old delusion that the amount of money in the world is unlimited, and that every American is entitled to a police captain’s share of it.
“Best of all, it has taught millions that there is really no earthly reason why there should be two cars in every garage, and a chicken in the pot every day. A few years back we were all leaping along after the pacemakers, and making shining fools of ourselves. Life in America had become an almost unanimous effort to keep up with the Joneses, and what the Joneses had to offer by way of example was chiefly no more than a puerile ostentation. So many luxuries became necessities that the line separating the one from the other almost vanished. People forgot altogether how to live well, and devoted themselves frantically to living gaudily.
“It seems to me that the depression will be well worth its cost if it brings Americans back to their senses. Once they rediscover the massive fact that hard thrift and not gambler’s luck is the only true basis of national wealth, they will discover simultaneously that a perfectly civilized and contented life is possible without the old fuss and display.”
Further reading: Murray N. Rothbard, America’s Great Depression, 5th Edition.