That 1937 feeling all over again

BDBoop

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Jul 20, 2011
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Don't harsh my zen, Jen!
That 1937 feeling all over again | Reuters

(Reuters) - Federal Reserve Chairman Ben Bernanke, an expert on the Great Depression, once promised that the central bank would never repeat its 1937 mistake of rushing to tighten monetary policy too soon and prolonging an economic slump.

He has been true to his word, keeping interest rates near zero since late 2008 and more than tripling the size of the Fed's balance sheet to $2.85 trillion. But cutbacks in government spending may end up having a similarly chilling effect on the economy, and there is little Bernanke can do to counter that.

I think Congress is going to have to actually - Oh, I don't know ... do their JOB??
 
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The point is that it’s now time — long past time — to get serious about the real crisis the economy faces.

The Fed needs to stop making excuses, while the president needs to come up with real job-creation proposals. And if Republicans block those proposals, he needs to make a Harry Truman-style campaign against the do-nothing GOP.

This might or might not work. But we already know what isn’t working: the economic policy of the past two years — and the millions of Americans who should have jobs, but don’t.

PAUL KRUGMAN: Market drop reflects what others ignore | PressDemocrat.com
 
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Controlling interest rates is what causes all these crises. If Ben Bernanke wanted to grow the economy, he would burn down the Federal Reserve and quit.
 
That 1937 feeling all over again | Reuters

(Reuters) - Federal Reserve Chairman Ben Bernanke, an expert on the Great Depression, once promised that the central bank would never repeat its 1937 mistake of rushing to tighten monetary policy too soon and prolonging an economic slump.

He has been true to his word, keeping interest rates near zero since late 2008 and more than tripling the size of the Fed's balance sheet to $2.85 trillion. But cutbacks in government spending may end up having a similarly chilling effect on the economy, and there is little Bernanke can do to counter that.

I think Congress is going to have to actually - Oh, I don't know ... do their JOB??
The central bank did not rush to tighten monetary policy during the Great Depression, so Bernanke is an expert in historical inaccuracy. Immediately following the late October 1929 crash, the NY Fed began slashing rates. It kept periodically cutting until it got to 1.5%, which was the lowest rate in Fed history to that point.

Now it's true, in October 1931 the NY Fed abruptly changed course, because the Bank of England the month before had severed the pound's link to gold, and worldwide investors were fearful of a similar move by the US authorities. In order to stem the outflow of gold, the Federal Reserve did indeed find its hand forced and it had to jack up its rates.

But the point is that the Fed had implemented record "easy" policies from November 1929 through September 1931, some 22 months after the onset of the Great Depression. For nearly two years, the same easy money and big spending policies Keynesians advocate today were followed, and they failed miserably.

Furthermore, Throughout the period we are considering, the highest the New York Fed ever charged banks was 7 percent. And the only time it did that was smack dab in the middle of the 1920–1921 depression. That depression ended within a year. Interest rates were also raised to end stagflation and the economic disaster of the 70s and early 80s, and resulted in economic growth.
 
Difference being the TARP and Stimulus did their job, averting a depression, and corporations, banks and the rich have record amounts of cash on hand. The problem is to get the do-nothing, block everything Pubs in congress to pass some of the jobs bill andtrade pacts languishing for no reason (except they want him to fail,the bought off a-holes)- and get the GD Pub a-holes to hire and loan...$%^&*#@ #$^&&%@#!! tyvm
 
We need to retire Obama and at least half of the remaining RINOs and Democrats. Give me 4 years with a real Conservative President and a Gingrich Congress and you will never vote for a Democrat again
 
That 1937 feeling all over again | Reuters

(Reuters) - Federal Reserve Chairman Ben Bernanke, an expert on the Great Depression, once promised that the central bank would never repeat its 1937 mistake of rushing to tighten monetary policy too soon and prolonging an economic slump.

He has been true to his word, keeping interest rates near zero since late 2008 and more than tripling the size of the Fed's balance sheet to $2.85 trillion. But cutbacks in government spending may end up having a similarly chilling effect on the economy, and there is little Bernanke can do to counter that.

I think Congress is going to have to actually - Oh, I don't know ... do their JOB??
The central bank did not rush to tighten monetary policy during the Great Depression, so Bernanke is an expert in historical inaccuracy. Immediately following the late October 1929 crash, the NY Fed began slashing rates. It kept periodically cutting until it got to 1.5%, which was the lowest rate in Fed history to that point.

Now it's true, in October 1931 the NY Fed abruptly changed course, because the Bank of England the month before had severed the pound's link to gold, and worldwide investors were fearful of a similar move by the US authorities. In order to stem the outflow of gold, the Federal Reserve did indeed find its hand forced and it had to jack up its rates.

But the point is that the Fed had implemented record "easy" policies from November 1929 through September 1931, some 22 months after the onset of the Great Depression. For nearly two years, the same easy money and big spending policies Keynesians advocate today were followed, and they failed miserably.

Furthermore, Throughout the period we are considering, the highest the New York Fed ever charged banks was 7 percent. And the only time it did that was smack dab in the middle of the 1920–1921 depression. That depression ended within a year. Interest rates were also raised to end stagflation and the economic disaster of the 70s and early 80s, and resulted in economic growth.

The Fed did little otherwise to keep the banking system liquid during the Great Depression. Bank reserves dropped by a third. The ratio of money in circulation to deposits was low in 1930. It then soared after the Bank of the United States failed in September of that year. People were hiding money in cans and their mattresses instead of sticking it in the banks.

It is not insignificant that the Fed raised interest rates in 1931. The rate increased from 1.5% to 3.5% to stem the outflow of gold when Britain went off the gold standard. That was a disastrous mistake and shouldn't be trivialized.

It should also be noted that the government ran fiscal deficits of 1%-2% of GDP up until 1932, when the deficit rose to 4%. For reference, George W Bush never ran a deficit less than 1.5% of GDP, and Reagan routinely ran deficits of 3% to 4%. So the "Keynesian" policies were hardly stimulative.
 
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Obama is trying to duplicate the FDR Depression play for play so I think an "Undistributed Profits Tax" is next,.

Those greedy fat cat corporations are withholding money from the government! They must pay!
 
That 1937 feeling all over again | Reuters



I think Congress is going to have to actually - Oh, I don't know ... do their JOB??
The central bank did not rush to tighten monetary policy during the Great Depression, so Bernanke is an expert in historical inaccuracy. Immediately following the late October 1929 crash, the NY Fed began slashing rates. It kept periodically cutting until it got to 1.5%, which was the lowest rate in Fed history to that point.

Now it's true, in October 1931 the NY Fed abruptly changed course, because the Bank of England the month before had severed the pound's link to gold, and worldwide investors were fearful of a similar move by the US authorities. In order to stem the outflow of gold, the Federal Reserve did indeed find its hand forced and it had to jack up its rates.

But the point is that the Fed had implemented record "easy" policies from November 1929 through September 1931, some 22 months after the onset of the Great Depression. For nearly two years, the same easy money and big spending policies Keynesians advocate today were followed, and they failed miserably.

Furthermore, Throughout the period we are considering, the highest the New York Fed ever charged banks was 7 percent. And the only time it did that was smack dab in the middle of the 1920–1921 depression. That depression ended within a year. Interest rates were also raised to end stagflation and the economic disaster of the 70s and early 80s, and resulted in economic growth.

The Fed did little otherwise to keep the banking system liquid during the Great Depression. Bank reserves dropped by a third. The ratio of money in circulation to deposits was low in 1930. It then soared after the Bank of the United States failed in September of that year.

It is not insignificant that the Fed raised interest rates in 1931. The rate increased from 1.5% to 3.5% to stem the outflow of gold when Britain went off the gold standard. That was a disastrous mistake and shouldn't be trivialized.

I don't think it was a mistake. More and more I'm convinced the Fed knew exactly what they were doing in sabotaging the US economy.
 
That 1937 feeling all over again | Reuters

(Reuters) - Federal Reserve Chairman Ben Bernanke, an expert on the Great Depression, once promised that the central bank would never repeat its 1937 mistake of rushing to tighten monetary policy too soon and prolonging an economic slump.

He has been true to his word, keeping interest rates near zero since late 2008 and more than tripling the size of the Fed's balance sheet to $2.85 trillion. But cutbacks in government spending may end up having a similarly chilling effect on the economy, and there is little Bernanke can do to counter that.

I think Congress is going to have to actually - Oh, I don't know ... do their JOB??

We didn't elect them to "do their job"...we elected them to avoid the other guy from getting elected:repeat:repeat:repeat.
If they did their job - you wouldn't vote for them ever again. You wouldn't like the result.
 
If anything, it's more like 1932.

It appears to be more like 1937. 1932 was just before the absolute bottom of the Great Depression.
I still say '78.

Economic stagnation, inflation running wild (though no political operative is admitting what anyone who walks into a grocery store or buys gasoline can readily recognize), total lack of leadership, and businesses waiting it out until the country can get an economic dilettante, who is clearly in way over his head, out of 1600 Pennsylvania.

All we need now is polyester disco suits to make a comeback.
 
If anything, it's more like 1932.

It appears to be more like 1937. 1932 was just before the absolute bottom of the Great Depression.
I still say '78.

Economic stagnation, inflation running wild (though no political operative is admitting what anyone who walks into a grocery store or buys gasoline can readily recognize), total lack of leadership, and businesses waiting it out until the country can get an economic dilettante, who is clearly in way over his head, out of 1600 Pennsylvania.

All we need now is polyester disco suits to make a comeback.

DON'T touch da hair!!!!

manero.jpg
 
It appears to be more like 1937. 1932 was just before the absolute bottom of the Great Depression.
I still say '78.

Economic stagnation, inflation running wild (though no political operative is admitting what anyone who walks into a grocery store or buys gasoline can readily recognize), total lack of leadership, and businesses waiting it out until the country can get an economic dilettante, who is clearly in way over his head, out of 1600 Pennsylvania.

All we need now is polyester disco suits to make a comeback.

DON'T touch da hair!!!!

manero.jpg

Er, um, well, I happen to have owned and wore a white suit pretty much like that...there's a picture...locked in a bank vault.
 

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