This article argues one of many theories as to why the Great Depression lasted as long as it did. In this case, the thought is that it was due to the National Industrial Recovery Act (NIRA) that was passed in 1933. This piece of legislation (that was later ruled unconstitutional by the Supreme Court and reversed) allowed, even encouraged, the formation of monopolies in various industries in exchange for a promise to increase wages and benefits for workers.
Of course, it is documented all throughout history that efforts to control the free markets usually end in negative and unforeseen consequences. In this case, unemployment stayed high because businesses could only afford to pay high wages and benefits for a few workers. In addition, no competition meant no innovation...sentencing that era to stagnation.
Why Did The Great Depression Last So Long? - Forbes.com: "What prevented the normal forces of supply and demand from working? The main culprit appears to be government policies that restricted competition."
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