This is How The Government 'ALWAYS' Responds to a Financial Crisis
Ken McElroy Show
Ken McElroy
4.7 • 712 Ratings
🗓️ 23 September 2025
⏱️ 32 minutes
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Summary
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Transcript
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| 0:00.0 | Recessions aren't new. We've been through them before and we're going to go through them again. |
| 0:09.2 | It's actually not important what causes a recession as much as how they get us out of a recession. |
| 0:15.9 | Yeah, I think what we want to discuss today is not whether we're in one or going to be in one, |
| 0:21.0 | even though obviously we're going to be touching on that. But more importantly, |
| 0:24.5 | if you go back in history and take a look at what caused a recession or depression, |
| 0:29.0 | because we're going to start there, but also what the Fed's responsibility and what they did after |
| 0:34.9 | that. And then, of course, what the policies were. And I think that's really |
| 0:39.2 | important. So that'll kind of lead us to, you know, where we are today. Yeah, absolutely. |
| 0:45.2 | You know, we're going to do a little history lesson. And I think some of this is very, very |
| 0:49.3 | interesting. So we're going to start with the Great Depression because this was really the biggest financial downturn since the Fed was created in 1913. |
| 0:58.2 | This is the first time they had to respond to anything. |
| 1:01.8 | So the stock market crashed in 1929, the Dow Jones fell nearly 90%. |
| 1:08.1 | Yeah, by the way, guys, as Daniel touched on the fact that the Fed was created in 1913, |
| 1:12.9 | guess what else was created in 1913, the IRS. So isn't that interesting? So the IRS was created |
| 1:21.2 | in February of 1913 and the Fed was creating in December. And so in one year, the IRS provided the government a spending, a way to spending through income tax. |
| 1:34.6 | And also at the same time, the Fed was created, which enabled them to expand or contract the money supply, as we know now. |
| 1:42.3 | But I thought it was a very interesting year. |
| 1:43.9 | And this was their first challenge. Yeah, this was their first challenge. And went all the |
| 1:48.0 | depression. And we're going to talk about why that happened, actually. So the Dow Jones fell nearly |
| 1:53.2 | 90%. Imagine that from the peak right now, if the stock market fell 90%. People would freak out. |
| 1:59.8 | Now, we had 9,000 banks failed during the 1930s, |
| 2:04.1 | and families lost savings overnight because their deposits weren't insured yet. So you had a |
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