About the forgotten great recession of 1920-1921

ZeroHedge has published a guest post (PDF, anonymous it seems) discussing free market and Austrian economics principles along with the great recession of 1920-1921. If you're not familiar with this recession, there's a good reason: that's a recession that was solved very swiftly, with absolutely no government intervention. It's a study case which Tom E. Woods often talk about.

I would like to just quote the two following quotes from Harding, the US president at the time.
Here is his Republican nomination speech:

Gross expansion of currency and credit have depreciated the dollar just as expansion and inflation have discredited the coins of the world. We inflate it in haste, we must deflate in deliberation. We debase the dollar in reckless finance, we must restore in honesty. Deflation on the one hand and restoration of the 100 cent dollar on the other ought to have begun the day after the armistice, but plans were lacking or courage failed…We will attempt intelligent and courageous deflation, and strike at government borrowing which enlarges the evil, and we will attack high cost of government with every energy and facility which attend republican capacity. We promise that relief which will attend the halting of waste and extravagance and the renewal of the practice of public economy not alone because it will relieve tax burdens but because it will be an example to stimulate thrift and economy in private life…There hasn’t been a recovery from the waste and abnormalities of war since the story of mankind was first written except through work and saving, through industry and denial, while needless spending and heedless extravagance have marked every decay in the history of nations…

And his Presidential inaugural speech:

The economic mechanism is intricate and its parts interdependent, and has suffered the shocks and jars incident to abnormal demands, credit inflation, and price upheavals. The normal balances have been impaired, the channels of distribution have been clogged, the relations of labor and management have been strained. We must seek the readjustment with care and courage. Our people must give and take. Prices must reflect the receding fever of war activities. Perhaps we never shall know the old levels of wages again, because war invariably readjusts compensations, and the necessaries of life will show their inseparable relationship, but we must strive for normalcy to reach stability. All the penalties will not be light, nor evenly distributed. There is no way of making them so. There is no instant step from disorder to order. We must face a condition of grim reality, charge off our losses and start afresh. It is the oldest lesson of civilization.

If only there hadn't been such a regression in terms of choice of society where FDR and Obama are praised and the likes of Harding completely forgotten.