Stock markets began falling in 1916, despite War profits, because investors feared the approach of national Prohibition. Prohibitionist States had never been beacons of economic success–rather the contrary. The Crash arrived with the Volstead act the night of January 16th, 1920, and sure enough, the depression arrived. Yet two years later a fairly swift recovery had set in, (link) mainly on account of popular nullification. (link)
This changed radically after the fanatically dry Ku-Klux Klan abandoned the Democratic party after “Whiskey Al” smith ran for president in 1928. Back then inauguration day was March 4th, and by March 2, the lame-duck Congress had gotten president Coolidge to sign the Jones Five & Ten law making beer a federal felony good for 5 years in the slammer and over half a million dollars in fines at current gold prices. With typical American humor Illinois papers that gloomily predicted a Dry Autocracy were soon advertising (non-Irish) Autocrat coffee. (link)
Federal Prosecutor Willebrandt had meanwhile weakened 4th and 5th Amendment protection to make way for really enforcing the first coercive amendments to the Constitution–the 16th importing the communist platform graduated income tax and the 18th, jointly yielding to the mystical fanaticism that loosed the Comstock Laws, Panic of 1893 and Panic of 1907–as apocalyptic plagues upon the former Land of the Free. Her tell-all exposé was published in August and September, 1929, as a syndicated column titled “The Inside of Prohibition.” (link)
Luckily for America, we still had unsubsidized elections and the Liberal Party’s 1931 repeal plank was published in time for the Democrats to copy it into their 1932 platform. (link) After Republican asset forfeiture enforcement brought on a Great Depression and Hoover’s Moratorium on Brains helped Hitler gain power in Germany, that wet plank walloped God’s Own Prohibitionists right out of the ballpark for the next five elections. (link)
Get the complete story in Prohibition and The Crash on Amazon Kindle in two languages. After this you’ll be able to explain to economists exactly how fanaticism and loss of freedom wrecked the U.S. economy.