Myth or Fact? The Great Depression was caused by a failure of the free market and was resolved by government intervention.

Myth.
Many think Herbert Hoover was an advocate for the free market and let it get out of hand which caused the great depression, which was then cleaned up by Roosevelt with his New Deal act. This is not so. Roosevelt's New Deal act was very much a continuation of policies and laws that Hoover was putting into play years before the great crash.

 During the years that followed the crash, the idea that business men were causing all the economic down turn caused laws to be passed which essentially punished the successful. It created the proverbial "robin hood" out of the govt, but without much good to the people.

Lawrence Reed notes in his essay "Myths of the Great Depression" that "Two UCLA economists—Harold L. Cole and Lee E. Ohanian—observed that the policies of President Franklin Roosevelt extended the Great Depression by seven long years. 'The economy was poised for a beautiful recovery,' the authors show, 'but that recovery was stalled by these misguided policies.”