In his memoirs, Herbert Hoover described the reaction of his Treasury secretary to the Great Depression:
First was the “leave it alone liquidationists” headed by Secretary of the Treasury Mellon, who felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula:
“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.”
a. What does “liquidate” mean in this context?
b. Can these views help explain the Fed’s actions during the early years of the Great Depression? Briefly explain.