Contrary to his statement, the Fed was not taking advice from Andrew Mellon in the early 1930s. As Murray Rothbard points out in America’s Great Depression, the Fed did try to reflate, but it did no good.

Furthermore, Bernanke’s response is not logical. He earlier agreed that there was price fixing during the Great Depression, but then claims that the Fed listened to Mellon and “liquidated” everyone. Had there been the liquidations, there would have been no depression. One cannot both have price fixing and not have price fixing simultaneously.