Government actions were taken and they very much helped create what is now known as the roaring twenties. The post-World War I crisis was a homemade problem: The effects of the World War ending were misjudged. During the War, farmers in the USA enjoyed the rising crop prices, since agricultural production plummeted in Europe, while demand was at an all-time high. They expanded their buisness in response to the rising crop prices, but did so by taking loans. When the war ended and production recovered in Europe, the prices dropped quickly, creating a crisis for the farmers.

At the same time, the soldiers returned home. The primary sector, at the time, was still the biggest market for unexperienced manual labor. But that sector was already struggling, so most of the soldiers became unemployed. In addition, the government responded to the ongoing inflation caused by World War I, by drastically increasing the interest rates. This fiscal move turned out to be a big mistakes, by promoting leaving capital at the banks instead of investing it aswell as stopping struggling buisnesses from getting the necessary loans.

The response was as quick as it was easy: Stop the high interest fiscal policy and protect your local market by introducing harsh taxes on foreign imports. (Fordney-McCumber Tariff/Emergency Tariff) The lowered interest rates promoted investments and provided the economy with reasonable conditions for loans while the agricultural sector recovered due to the tariffs on foreign products. In addition, the government started new infrastructure projects all over the country to reduce the high unemployment rate.

To sum it all up, they responded by undoing their mistakes while also employing classic tricks, fiscal spending (Infrastructure) and protectionism. James Grant promoted the idea of a crisis that healed itself in his 2007 book, promoting laissez-faire. He doesn't really take into account that the entire problem that turned a minor crisis into a quickly escalating problem was homemade, a mistake in the Federal Reserves monetary policy that was fixed by undoing the mistakes and slightly pushing the economy into the right direction again.