The Great Depression - why did it end?

[Iriemon]

Ok, well the reality is that government interventions in the market cause and then worsen economic downturns. So you tell me how that helps people out of work, shelter, money, and food.

It keeps them ALIVE, Kevin.

That's the propaganda that the elite want you to believe, editec. But in reality, It keeps them poor and dependent. Welfare is cruel beyond words.

Poverty in the US dropped in half after the New Deal programs.

 

[Iriemon]

Ok, well the reality is that government interventions in the market cause and then worsen economic downturns. So you tell me how that helps people out of work, shelter, money, and food.

It keeps them ALIVE, Kevin.

It prolongs the agony, which means the people have to suffer longer.

As opposed to what? Letting them die? I know that is not what you mean, but how is health care being provided to an aged or disabled person who can't work prolonging their agony?

 

[Kevin_Kennedy]

I really hate to see us spending money to bail out the people that got us into this situation. But even more, I hate to think of what it would be like were we not making a concerted effort to prevent the Second Great Republican Depression.

As for your ideologically based economic theory goes, we did little in the First Great Republican Depression, and we suffered for it. Better proactive.

We were inactive during the first depression of the 20th century in 1921, and it lasted two years.

As was discussed earlierin the thread, 1920 wasn't a depression, but a mild post war retooling recession. Altogether difference than 1929; or 2008.

I don't think there was anything mild about the recession of 1920.

During and after World War I, the Federal Reserve inflated the money supply substantially. Once the Fed finally began to raise the discount rate—the rate at which it lends to banks—the economy slowed as it started readjusting to reality. By the middle of 1920, the downturn had become severe, with production falling by 21 percent over the next 12 months. The number of unemployed people jumped from 2.1 million in 1920 to 4.9 million in 1921.

The American Conservative -- The Harding Way

 

[Kevin_Kennedy]

It keeps them ALIVE, Kevin.

It prolongs the agony, which means the people have to suffer longer.

As opposed to what? Letting them die? I know that is not what you mean, but how is health care being provided to an aged or disabled person who can't work prolonging their agony?

Well the discussion wasn't necessarily about cutting healthcare, and I was speaking of the masses not one specific person who sees a benefit from some of these government programs.

 

[Toro]

I really hate to see us spending money to bail out the people that got us into this situation. But even more, I hate to think of what it would be like were we not making a concerted effort to prevent the Second Great Republican Depression.

As for your ideologically based economic theory goes, we did little in the First Great Republican Depression, and we suffered for it. Better proactive.

We were inactive during the first depression of the 20th century in 1921, and it lasted two years.

As was discussed earlierin the thread, 1920 wasn't a depression, but a mild post war retooling recession. Altogether difference than 1929; or 2008.

I'd disagree. 1920 was a fairly sharp recession. Policy after WWII was implemented specifically to avoid a repeat of the recession after WWI.

 

[Iriemon]

We were inactive during the first depression of the 20th century in 1921, and it lasted two years.

As was discussed earlierin the thread, 1920 wasn't a depression, but a mild post war retooling recession. Altogether difference than 1929; or 2008.

I don't think there was anything mild about the recession of 1920.

During and after World War I, the Federal Reserve inflated the money supply substantially. Once the Fed finally began to raise the discount rate—the rate at which it lends to banks—the economy slowed as it started readjusting to reality. By the middle of 1920, the downturn had become severe, with production falling by 21 percent over the next 12 months. The number of unemployed people jumped from 2.1 million in 1920 to 4.9 million in 1921.

The American Conservative -- The Harding Way

Year - GDP 1929$
1919 $70,271
1920 71,383
1921 68,355
1922 73,150
1923 82,994
1924 85,222
1925 87,359
1926 93,438
1927 94,161
1928 95,715
1929 101,444
1930 91,513
1931 84,300
1932 70,682
1933 68,337
1934 74,609
1935 85,806
1936 95,798
1937 103,917

Real GDP and GNP

Real GDP fell 4% in the 1920 recession; it fell over 30% in the great depression.

 

[Iriemon]

It prolongs the agony, which means the people have to suffer longer.

As opposed to what? Letting them die? I know that is not what you mean, but how is health care being provided to an aged or disabled person who can't work prolonging their agony?

Well the discussion wasn't necessarily about cutting healthcare, and I was speaking of the masses not one specific person who sees a benefit from some of these government programs.

So how does government programs that support the aged or disabled who can't work prolong their agony?

 

[Kevin_Kennedy]

As was discussed earlierin the thread, 1920 wasn't a depression, but a mild post war retooling recession. Altogether difference than 1929; or 2008.

I don't think there was anything mild about the recession of 1920.

During and after World War I, the Federal Reserve inflated the money supply substantially. Once the Fed finally began to raise the discount rate—the rate at which it lends to banks—the economy slowed as it started readjusting to reality. By the middle of 1920, the downturn had become severe, with production falling by 21 percent over the next 12 months. The number of unemployed people jumped from 2.1 million in 1920 to 4.9 million in 1921.

The American Conservative -- The Harding Way

Year - GDP 1929$
1919 $70,271
1920 71,383
1921 68,355
1922 73,150
1923 82,994
1924 85,222
1925 87,359
1926 93,438
1927 94,161
1928 95,715
1929 101,444
1930 91,513
1931 84,300
1932 70,682
1933 68,337
1934 74,609
1935 85,806
1936 95,798
1937 103,917

Real GDP and GNP

Real GDP fell 4% in the 1920 recession; it fell over 30% in the great depression.

I didn't say that the recession of 1920 was worse than the Great Depression, I merely stated that I would not consider it a mild recession.

 

[Kevin_Kennedy]

As opposed to what? Letting them die? I know that is not what you mean, but how is health care being provided to an aged or disabled person who can't work prolonging their agony?

Well the discussion wasn't necessarily about cutting healthcare, and I was speaking of the masses not one specific person who sees a benefit from some of these government programs.

So how does government programs that support the aged or disabled who can't work prolong their agony?

They may see some benefit out of the programs, however society as a whole may be worse off for the government sinking resources into those programs. There are people who are going to see some benefit out of the stimulus package, like those who are going to be paid to do the infrastructure building and those who are receiving funds for whatever else. However, the recession is going to be prolonged because of the stimulus. Therefore, the rest of us are going to have to suffer longer because these companies who may not be solvent on their own are now being propped up by the government and are destroying wealth.

 

[Old Rocks]

The infrastructure built by those people is going to disappear after they are paid? We are still using facilities built by the CCCs and the WPA. The building of infrastructure is an investment, if done wisely, will pay back many times the money spent on it.

There are many companies that would have been destroyed, in spite of being managed well, by the lack of credit, had things been allowed to continue as they were last fall. Your ideology seems to blind you to reality.

 

[Kevin_Kennedy]

The infrastructure built by those people is going to disappear after they are paid? We are still using facilities built by the CCCs and the WPA. The building of infrastructure is an investment, if done wisely, will pay back many times the money spent on it.

There are many companies that would have been destroyed, in spite of being managed well, by the lack of credit, had things been allowed to continue as they were last fall. Your ideology seems to blind you to reality.

I would say your ideology blinds you to basic economics, but that would be rude.

At any rate, where in the world did you get the notion that I said the infrastructure is going to disappear? No, that is completely absurd and I never said anything of the sort.

 

[Bfgrn]

The infrastructure built by those people is going to disappear after they are paid? We are still using facilities built by the CCCs and the WPA. The building of infrastructure is an investment, if done wisely, will pay back many times the money spent on it.

There are many companies that would have been destroyed, in spite of being managed well, by the lack of credit, had things been allowed to continue as they were last fall. Your ideology seems to blind you to reality.

Hey, AND that infrastructure improvement is beneficial to commerce...THE MARKET...

AND energy efficiency...less fuel burned in gridlock

AND the environment...less emissions into the atmosphere

AND health care...less illness due to pollution exasperated diseases.

AND businesses...less sick days of workers affected by those diseases...

AND businesses...less worker tardiness...

AND businesses...less transportation costs = more profit

AND consumers...less transportation costs = lower prices

AND...

 

[Kevin_Kennedy]

The infrastructure built by those people is going to disappear after they are paid? We are still using facilities built by the CCCs and the WPA. The building of infrastructure is an investment, if done wisely, will pay back many times the money spent on it.

There are many companies that would have been destroyed, in spite of being managed well, by the lack of credit, had things been allowed to continue as they were last fall. Your ideology seems to blind you to reality.

Hey, AND that infrastructure improvement is beneficial to commerce...THE MARKET...

AND energy efficiency...less fuel burned in gridlock

AND the environment...less emissions into the atmosphere

AND health care...less illness due to pollution exasperated diseases.

AND businesses...less sick days of workers affected by those diseases...

AND businesses...less worker tardiness...

AND businesses...less transportation costs = more profit

AND consumers...less transportation costs = lower prices

AND...

As I must continually remind so many of you, it doesn't matter if you agree with what the money is spent on or not as it is always harmful to the economy when the government takes money out of the private sector and reallocates it to where it does not belong. Some people will benefit, that is to be sure. But as Bastiat said, that is what is seen. What is not seen are those who have been harmed as a result of this government reallocation of resources. Perhaps that money, had the government not taken it, would have been spent on a book. Thus, the bookstore suffers because the money was not available to be spent on a book because the government took it and spent it on infrastructure.

 

[Bfgrn]

The infrastructure built by those people is going to disappear after they are paid? We are still using facilities built by the CCCs and the WPA. The building of infrastructure is an investment, if done wisely, will pay back many times the money spent on it.

There are many companies that would have been destroyed, in spite of being managed well, by the lack of credit, had things been allowed to continue as they were last fall. Your ideology seems to blind you to reality.

Hey, AND that infrastructure improvement is beneficial to commerce...THE MARKET...

AND energy efficiency...less fuel burned in gridlock

AND the environment...less emissions into the atmosphere

AND health care...less illness due to pollution exasperated diseases.

AND businesses...less sick days of workers affected by those diseases...

AND businesses...less worker tardiness...

AND businesses...less transportation costs = more profit

AND consumers...less transportation costs = lower prices

AND...

As I must continually remind so many of you, it doesn't matter if you agree with what the money is spent on or not as it is always harmful to the economy when the government takes money out of the private sector and reallocates it to where it does not belong. Some people will benefit, that is to be sure. But as Bastiat said, that is what is seen. What is not seen are those who have been harmed as a result of this government reallocation of resources. Perhaps that money, had the government not taken it, would have been spent on a book. Thus, the bookstore suffers because the money was not available to be spent on a book because the government took it and spent it on infrastructure.

Kevin, you need to take a course in Civics... it is no longer taught in schools...which explains your lack of understanding HOW a society works...

THEN...read about the role of the private sector, as defined during our founding father's days...

 

[Kevin_Kennedy]

Hey, AND that infrastructure improvement is beneficial to commerce...THE MARKET...

AND energy efficiency...less fuel burned in gridlock

AND the environment...less emissions into the atmosphere

AND health care...less illness due to pollution exasperated diseases.

AND businesses...less sick days of workers affected by those diseases...

AND businesses...less worker tardiness...

AND businesses...less transportation costs = more profit

AND consumers...less transportation costs = lower prices

AND...

As I must continually remind so many of you, it doesn't matter if you agree with what the money is spent on or not as it is always harmful to the economy when the government takes money out of the private sector and reallocates it to where it does not belong. Some people will benefit, that is to be sure. But as Bastiat said, that is what is seen. What is not seen are those who have been harmed as a result of this government reallocation of resources. Perhaps that money, had the government not taken it, would have been spent on a book. Thus, the bookstore suffers because the money was not available to be spent on a book because the government took it and spent it on infrastructure.

Kevin, you need to take a course in Civics... it is no longer taught in schools...which explains your lack of understanding HOW a society works...

THEN...read about the role of the private sector, as defined during our founding father's days...

Please enlighten me as to what you think I'm missing, since you say I lack some concept of understanding that you possess.

 

[Bfgrn]

As I must continually remind so many of you, it doesn't matter if you agree with what the money is spent on or not as it is always harmful to the economy when the government takes money out of the private sector and reallocates it to where it does not belong. Some people will benefit, that is to be sure. But as Bastiat said, that is what is seen. What is not seen are those who have been harmed as a result of this government reallocation of resources. Perhaps that money, had the government not taken it, would have been spent on a book. Thus, the bookstore suffers because the money was not available to be spent on a book because the government took it and spent it on infrastructure.

Kevin, you need to take a course in Civics... it is no longer taught in schools...which explains your lack of understanding HOW a society works...

THEN...read about the role of the private sector, as defined during our founding father's days...

Please enlighten me as to what you think I'm missing, since you say I lack some concept of understanding that you possess.

The main concept you're missing is a sound understanding of human nature. The recent economic tsunami, where unregulated greed proved the market can NOT operate without rules, oversight and regulations should be clear to you Kev.

The second; that our founding fathers designed a government OF and FOR people; individuals, not corporations.

The Boston Tea Party was as much a rebellion against corporations as it was a rebellion against oppressive government...

Nowhere in the Constitution is the word "corporation," for the writers had no interest in using for-profit corporations to run their new government. In colonial times, corporations were tools of the king's oppression, chartered for the purpose of exploiting the so-called "New World" and shoveling wealth back into Europe. The rich formed joint-stock corporations to distribute the enormous risk of colonizing the Americas and gave them names like the Hudson Bay Company, the British East India Company, and the Massachusetts Bay Colony. Because they were so far from their sovereign - the king - the agents for these corporations had a lot of autonomy to do their work; they could pass laws, levy taxes, and even raise armies to manage and control property and commerce. They were not popular with the colonists.

So the Constitution's authors left control of corporations to state legislatures (10th Amendment), where they would get the closest supervision by the people. Early corporate charters were explicit about what a corporation could do, how, for how long, with whom, where, and when. Corporations could not own stock in other corporations, and they were prohibited from any part of the political process. Individual stockholders were held personally liable for any harms done in the name of the corporation, and most charters only lasted for 10 or 15 years. But most importantly, in order to receive the profit-making privileges the shareholders sought, their corporations had to represent a clear benefit for the public good, such a building a road, canal, or bridge. And when corporations violated any of these terms, their charters were frequently revoked by the state legislatures.
http://reclaimdemocracy.org/personhood/edwards_morgan_corporate.html

The third missing piece is that the free market is NOT a free market...

Corporations are a good thing. They encourage us to take risks. They maximize wealth. They create jobs. They're a great thing, but they should not be running our government. The reason for that is they don't have the same aspirations for America that you and I do. A corporation does not want democracy. It does not want free markets, it wants profits, and the best way for it to get profits is to use our campaign-finance system -- which is just a system of legalized bribery -- to get their stakes, their hooks into a public official and then use that public official to dismantle the marketplace to give them a competitive advantage and then to privatize the commons, to steal the commonwealth, to liquidate public assets for cash, to plunder, to steal from the rest of us.

The domination of business by government is called communism. The domination of government by business is called fascism. And our job is to walk that narrow trail in between, which is free-market capitalism and democracy. And keep big government at bay with our right hand and corporate power at bay with our left.
http://www.sierraclub.org/pressroom/speeches/2005-09-10rfkjr.asp

 

[Kevin_Kennedy]

The history lesson was sound, however the economics lesson was not. This recent downturn is not the product of an unregulated market, it is the product of a highly regulated market with a central economic planner that creates the business cycle. I'm not sure how you can say that the market was full of unregulated greed, and then boldly state that the free market isn't a free market. Those are opposing concepts. Of course the market hasn't been free, that's why this downturn can't possibly be chalked up to deregulation.

And while it's true that the founders did believe that the government should have its hand in infrastructure, which is why they authorized this under the Constitution, it doesn't change basic economics whatsoever. Government spending always hurts the economy.

 

[Iriemon]

The history lesson was sound, however the economics lesson was not. This recent downturn is not the product of an unregulated market, it is the product of a highly regulated market with a central economic planner that creates the business cycle.

Which central economic planner or regulation made the decision for the financial institutions to invest so many trillions in securitized mortgage packages?

 

[Kevin_Kennedy]

The history lesson was sound, however the economics lesson was not. This recent downturn is not the product of an unregulated market, it is the product of a highly regulated market with a central economic planner that creates the business cycle.

Which central economic planner or regulation made the decision for the financial institutions to invest so many trillions in securitized mortgage packages?

The Fed's easy-money policies and the fact that Fannie Mae and Freddie Mac are government sponsored agencies made that possible.

 

[Iriemon]

The history lesson was sound, however the economics lesson was not. This recent downturn is not the product of an unregulated market, it is the product of a highly regulated market with a central economic planner that creates the business cycle.

Which central economic planner or regulation made the decision for the financial ?

The Fed's easy-money policies and the fact that Fannie Mae and Freddie Mac are government sponsored agencies made that possible.

How did the Fed or Freddie/Freddie require the institutions to invest so many trillions in securitized mortgage packages?