What we didn’t learn from the depression

Sanin · 05-06-2008, 01:03 AM

The stock market crash of 1929, which marked the beginning of the Great Depression of the United States, came directly from wild speculation which collapsed and brought the whole economy down with it. But, as John Galbraith says in his study of that event (The Great Crash), behind that speculation was the fact that "the economy was fundamentally unsound." He points to very unhealthy corporate and banking structures, an unsound foreign trade, much economic misinformation, and the "bad distribution of income" (the highest 5 percent of the population received about one-third of all personal income).
A socialist critic would go further and say that the capitalist system was by its nature unsound: a system driven by the one overriding motive of corporate profit and therefore unstable, unpredictable, and blind to human needs.

-A People's History of the United States

Howard Zinn

Sound familiar? Except now the top .1 percent of the population make 25% of the personal income. We still have that unsound foreign trade, economic misinformation, and unhealthy corporate and banking structures. Even worse now though is the prevalence of credit card debt.

Nietzsche13 · 05-06-2008, 01:12 AM

Source of Great Depression was the Federal Reserve. They contracted the supply of money intentionally to cause the events in question.

Right now they are doing the opposite by increasing the supply of money by much more than the rate of growth of the economy. This causes inflation and a weakening of the dollar.

Ezra Pound · 05-06-2008, 01:18 AM

Can we make a Zombie Andrew Jackson?

Throatpoker · 05-06-2008, 01:22 AM

It was because of the massive inflation created by the Federal Reserve, the US trying to bail out England, and the beginning of the New Deal (which if you read a bit, you'd know was started by Hoover and then continued by FDR).

Quote:

Originally Posted by Ezra Pound

Can we make a Zombie Andrew Jackson?

That would kick ass, but then we'd be overrun by hordes of libertarian ghouls.

Sanin · 05-06-2008, 01:23 AM

Quote:

Originally Posted by Nietzsche13

Source of Great Depression was the Federal Reserve. They contracted the supply of money intentionally to cause the events in question.

Right now they are doing the opposite by increasing the supply of money by much more than the rate of growth of the economy. This causes inflation and a weakening of the dollar.

Different path to the same place. If you can't afford anything because your money is worthless then you get depression.

Throatpoker · 05-06-2008, 01:26 AM

The money's being devalued because of the people that want the government to "control" the economy, that just shows their ignorance of the subject. Capitalism wasn't (and isn't) the problem, Corporatism is.

Sanin · 05-06-2008, 01:33 AM

Quote:

Originally Posted by Throatpoker

It was because of the massive inflation created by the Federal Reserve, the US trying to bail out England, and the beginning of the New Deal (which if you read a bit, you'd know was started by Hoover and then continued by FDR).

That would kick ass, but then we'd be overrun by hordes of libertarian ghouls.

Oh I'm sorry I don't read. I only pulled that quote from whadya callit ... a book

: Hoover didn't start the new deal. By definition the New Deal was a program proposed by FDR. Hoover was a opponent of wasteful policies. Thinking a problem better does not however fix it.

**GermanBJJ** · 05-06-2008, 01:34 AM

The Great Depression was no different than the depressions of old (which happened without central banks or evil conspiring financiers or big government conspiracies.)

Irrational exuberance followed by massive deflation.

Sanin · 05-06-2008, 01:35 AM

Quote:

Originally Posted by Throatpoker

The money's being devalued because of the people that want the government to "control" the economy, that just shows their ignorance of the subject. Capitalism wasn't (and isn't) the problem, Corporatism is.

The problem is that in our current economy there is little difference between the two. Going a step further the line between corporatism and government is getting blurred everyday.

Nietzsche13 · 05-06-2008, 01:36 AM

Quote:

Originally Posted by Sanin

Different path to the same place. If you can't afford anything because your money is worthless then you get depression.

Yes, but times have changed and the international factor is in play. Still, the role of a nation's currency is the single biggest economic factor.

BTW, Zinn's book is one of my favorites.