How do recessions end?

0:00The recession is a necessary liquidation process, and any government interference in the recession prolongs it and makes it permanent. It doesn't allow the recession process, the adjustment process, to work. And also, in particular, the key thing that has to happen is resources have to shift out of capital goods and into consumer goods, and this means that wage rates and capital goods prices have to fall so that, relative to consumer goods, so that people will shift, the resources will shift. To prop the raise rates up, which is what the New Deal did, of course, to prop them up and prevent them from falling, totally destroys the whole adjustment process and prolongs the depression permanently, which is what happened in the 1930s.