A Muzi wrote:
>> still just me <[email protected]> may have said:
>>> Let's see: massive recession with stagflation and credit markets
>>> tumbling, $700b pointless war continuing, imported labor (direct and
>>> indirect) eliminating most US based jobs, the Constitution and Bill of
>>> Rights apparently no longer observed... no matter who we elect, at
>>> least it can't get much worse.
>
> Werehatrack wrote:
>> Au contraire. IMO, it can and it will, regardless of who wins. The
>> real question is whether we will elect another Hoover who, oblivious
>> to the concerns of the people whose plight he (or she) does not truly
>> understand or actually care about, will do nothing effective to start
>> making the significant changes that will be needed to build the base
>> for a less wasteful, more responsible future. And make no mistake;
>> digging out of the mess will take more than 8 years.
>
> Or another Roosevelt who can take a minor dip and make all-time horrible
> suffering and destitution of it.
> You'd expect more of Bernanke - he wrote on this specifically. But no.
Yes, he did, He's a smart guy, and apparently the Great Depression is
one of his favorite subjects, but he blamed the Federal Reserve, not the
president:
Bernanke from:
http://foreignpolicy.com/story/cms.php?story_id=3272
"A closer look reveals that the economic repercussions of a stock market
crash depend less on the severity of the crash itself than on the
response of economic policymakers, particularly central bankers. After
the 1929 crash, the Federal Reserve mistakenly focused its policies on
preserving the gold value of the dollar rather than on stabilizing the
domestic economy. By raising interest rates to protect the dollar,
policymakers contributed to soaring unemployment and severe price
deflation. The U.S. central bank only compounded its mistake by failing
to counter the collapse of the country’s banking system in the early
1930s; bank failures both intensified the monetary squeeze (since bank
deposits were liquidated) and sparked a credit crunch that hurt
consumers and small firms in particular. Without these policy blunders
by the Federal Reserve, there is little reason to believe that the 1929
crash would have been followed by more than a moderate dip in U.S.
economic activity."
Another important factor:
"The Hawley-Smoot Tariff (or Smoot-Hawley Tariff Act) was signed into
law on June 17, 1930, and raised U.S. tariffs on over 20,000 imported
goods to record levels, and, in the opinion of most economists, worsened
the Great Depression. Economists have now generally regarded this Tariff
Act (i.e., tax increase on imported goods) as the greatest policy
blunder in American economic history, coming as it did after the 1929-30
recession and preventing the economy from a full, natural recovery which
had already started by the Spring, 1930."
"The act pioneered by Senator Reed Smoot, a Republican from Utah, and
Representative Willis C. Hawley, a Republican from Oregon. President
Herbert Hoover had asked Congress for a downward revision in rates, but
Congress raised rates instead. While many economists urged a veto,
Hoover signed the bill. Hoover had, during the 1928 campaign, pledged to
help beleaguered farmers by, among other things, raising tariff levels
on agricultural products."
"Milton Friedman, leader of the Chicago School, argued that the Federal
Reserve System did not cause the Great Depression, but made it worse by
contracting the money supply at the very moment that markets needed
liquidity. Since its entire existence was predicated on its mission to
prevent events like the Great Depression, it had failed in what the 1913
bill tried to enact.[58] Friedman explains his hypothesis on the cause
of The Great Depression and the role the Federal Reserve played in it in
his book and documentary series "Free to Choose". An excerpt of his
hypothesis:"
""Why didn't this system prevent The Great Depression after 1929?
Because from 1929 to 1930 after the stock market crashed, the Federal
Reserve system allowed the quantity of money to decline slowly thereby
throttling the monetary structure...If the Federal Reserve had stepped
in, bought government securities on a large scale, provided the cash,
the depositors would have found that they could've got their money and
they would have stopped asking for it.. Instead, believe it or not, the
system stood idly by while banks crashed on all sides. ""
"This is also the current conventional wisdom on the matter, as both Ben
Bernanke and other economists such as the late John Kenneth
Galbraith--the latter being an ardent Keynesian--have upheld this
reasoning."
"The Federal Reserve, by design, is not controlled by the President or
the U.S. Treasury; it is primarily controlled and owned by its member
banks and the chairman of the Federal Reserve."
Your guru Hayek blamed the Great Depression on the inflationary boom
cycle of the 20's, which he thought made the Depression inevitable.
There you have it: 3 Republican administrations (Harding, Coolidge,
Hoover), a bubble market (unregulated stock market), no organized labor
or social welfare system and the greatest man-made catastrophe in
American peacetime. "Laissez-faire" boom/bust* and the little guy starves.
And this was Roosevelt's fault how? Not even your voodoo economists
would claim that.
Now we've got Iraq and the sub-prime mess. Bankers and Republicans,
what's not to like? It always happens when greed and corruption run the
show.
*Laissez-faire is just a euphemism for "business-friendly". What's good
for Halliburton is not good for America.
