Great Depression Guide

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Imagine you are the German economic minister in 1929. What would you have to done to fix the economy
 
1) Don't Waste Money Propping up Junkers' Estates
If it's politically feasible to do so, I would've tried to avoid subsidies for the Junkers' estates and redirect the funds towards unemployment benefits, or try to use the Osthilfe (Eastern Aid) Scandal for political gain to discredit the Junkers in the eyes of the electorate. In 1929 the government used emergency funds to keep bankrupt Junkers' estates afloat, and it became a major scandal in late 1932 when it leaked that many of the recipients spent the money on luxuries like new cars and vacations.

A similar, quid pro quo scandal exposed President Hindenburg and many of his close associates when news leaked that a group of industrialists bought out the indebted Hindenburg family estate then gave it back to him for free in return for political influence. Hindenburg held Schleicher responsible for the story leaking, but a savvy cabinet member could have covered it up and blackmailed Hindenburg and the agrarian lobby to get something in return.

2) A better handling of the 1931 Austrian Banking Crisis. Germany and Austria announced a customs union without prior notice to the other powers, which was seen as the first step toward an anschluss. France, the country with the 2nd largest gold reserves at the time (US was #1) pulled out its money out a major Austrian Bank called Creditanstalt. Creditanstalt had major investments throughout the former Habsburg areas of central Europe, and the banking collapse in Austria and Hungary spilled over into Germany and made the depression worse.

If Germany coordinated a bailout of Creditanstalt with the other powers that wouldn't be seen as a step towards anschluss. If the central Banks of the US, UK, and France were willing to serve as lenders of last resort by providing emergency credit to the Reichsbank (Weimar Germany's Central Bank), it may have been possible to lessen the deflation in Germany during the Depression. Pages 12-20 and the appendix of this report (PDF) on the history of German monetary policy in the Weimar era.

3) Use unemployment benefits strategically to secure re-election for the democratic parties.
This economic history paper (Averting the Nazi Seizure of Power: A Counterfactual) models a scenario where, after the July 1932 elections (when the Nazis became the largest party in the Reichstag), the government in power targets unemployment benefits towards districts with the most rapid increases in support for the NSDAP in such a manner that the NSDAP is reduced to the second largest party, behind the SPD. This could be even be financially feasible without a net increase in government spending in Berlin.

A more politically savvy government might have been able to target unemployment aid in order to secure reelection, the paper mentions that this is essentially how Roosevelt designed the New Deal. As long as the NDSAP and KPD combined don't have a majority, then Weimar democracy can limp through the depression alive. A presidential government's cabinet or article 48 decrees could be overruled by a majority in the Reichstag, so a chancellor of a minority government like Brüning needed to be tolerated by a majority of the Reichstag (the willingness of the SPD, the largest party for a time, to not oppose him was key to his government's survival). From July 1932 onwards, the NSDAP and the KPD had a majority in the Reichstag that they could use to bring down any government or presidential decree.

4) Bonus: Adopt a constructive vote of no confidence in the Reichstag
This move would benefit the democratic primaries in the Weimar coalition at the expense of the extremists, and give them breathing room to carry out policy without the governing coalition falling from power. Prussia's state legislature had a constructive vote of no confidence, so any majority vote to remove a government would have to replace it with a new one. Because of this the Weimar coalition held onto power until it was removed extralegally in the Preußenschlag.
 
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