Eighty years ago today

[Little-Acorn]

Eighty years ago today, on March 4, 1933, Franklin Delano Roosevelt was inaugurated as President of the United States. And the country began its long slide into socialism, which continues to this day.

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[avatar4321]

It basically started with Wilson. We just had a reprieve for the Harding/Coolidge economic boom.

[gabosaurus]

We just had a reprieve for the Harding/Coolidge economic boom.

Which, of course, led to the Great Depression. :cool:

[mundame]

It was irresponsible behavior by Wall Street that led to the Great Depression, just like irresponsible behavior by Wall Street and government that led to our Great Recession.

Looks like it's over now, though --- a robust Wall Street recovery is on, hopefully the rest of the economy will follow.

[fj1200]

Which, of course, led to the Great Depression. :cool:

Incorrect. Because it preceded the GD doesn't mean it led to the GD. Interventionism by Hoover, and continued by FDR, and poor decision making by the Fed led to the GD.


It was irresponsible behavior by Wall Street that led to the Great Depression, just like irresponsible behavior by Wall Street and government that led to our Great Recession.

Looks like it's over now, though --- a robust Wall Street recovery is on, hopefully the rest of the economy will follow.

Also incorrect. No one will state that WS was perfect back in those days but they certainly didn't pass new tariff laws.

[Tyr-Ziu Saxnot]

Eighty years ago today, on March 4, 1933, Franklin Delano Roosevelt was inaugurated as President of the United States. And the country began its long slide into socialism, which continues to this day.

.

FDR was one of the three worst presidents ever. And that because of his socialism that he put into play which has not stopped expanding in our government yet.--Tyr

[cadet]

Also incorrect. No one will state that WS was perfect back in those days but they certainly didn't pass new tariff laws.

Unbeknownst to them, the money fluxuates. So when things started going down everyone was pulling out with as much money as they could. Now we've learned from that mistake. And start buying while it's cheap.

And yes, it was FDR's fault, mostly. All of those "temporary" gov't solutions to help us get back on our feet, that ended up permanent.... You can probably just place the blame on every president thereafter for keeping them.

[fj1200]

Unbeknownst to them, the money fluxuates. So when things started going down everyone was pulling out with as much money as they could. Now we've learned from that mistake. And start buying while it's cheap.

Actually there was effort by those with money to buy after the initial downturn in '29, where there was a brief rally, but the actions taken by the government, higher taxes and Fed actions, just destroyed the value that might have been there.


And yes, it was FDR's fault, mostly. All of those "temporary" gov't solutions to help us get back on our feet, that ended up permanent.... You can probably just place the blame on every president thereafter for keeping them.

You can't blame what happened prior to '33 on FDR and to do so ignores how bad Hoover really was. Hoover of course is the only reason that FDR looks so good and provides an easy scapegoat to how the New Deal lengthened the GD. The lie being that Hoover was a laissez-faire Republican which is easily disprovable but still dominates the narrative.

FDR's reputation was rescued by WWII and his actions in opposing Germany. What is glossed over is that he needed to repudiate virtually every interventionist policy he implemented, and ignore his top advisors, in recruiting big business in developing the war machine needed to win.

[avatar4321]

Which, of course, led to the Great Depression. :cool:

You're a little confused. the Harding/coolidge policies lead to the greatest economic growth period of American history. Unemployment was literally at 2%. That's below full employment.

The great Depression was caused by Hoover and FDR trying to "fix" everything with government intervention. It's not a coincidence that Obama is using the same tactics to "fix" our current economic problems and the economic problems are prolonged.

Harding/Coolidge's policies turned the 1920 Depression to the greatest economic boom. Hoover/FDR turned the 1929 depression to a 12 year long ordeal.

History repeats itself, except this time we dont have any leaders like Harding/Coolidge to cut taxes and cut spending

[avatar4321]

It was irresponsible behavior by Wall Street that led to the Great Depression, just like irresponsible behavior by Wall Street and government that led to our Great Recession.

Looks like it's over now, though --- a robust Wall Street recovery is on, hopefully the rest of the economy will follow.

Over? It looks like it's just about to drop again. We have gas prices and deflation hurting us right now. Not to mention higher taxes across the board and out of control spending.

[Little-Acorn]

Incorrect. Because it preceded the GD doesn't mean it led to the GD. Interventionism by Hoover, and continued by FDR, and poor decision making by the Fed led to the GD.


FDR had nothing to do with the starting of the Great Depression. It was pretty much under way by the end of 1929, and FDR didn't become President until 1933.

A major contributor to causing the Great Depression, was various world governments (including but not limited to the United States) creating agencies to buy up loans at very low interest rates, essentially lowering interest rates so much that people took out huge loans everywhere, all at the same time, to expand businesses and buy stuff like crazy. Then when actual economies couldn't support the increased production of those expanded businesses, and people stopped buying stuff for a while because they had already bought too much, the businesses started failing, defaulting on their loans, laying people off who then couldn't repay their loans and mortgages, etc., and everything came crashing down.

Hoover was President when these events were in full swing, and when things went downhill. He began a few programs to "help" things, as did other world leaders in other countries as the Depressions spread worldwide (actually it started in other countries and spread to the United States). Those programs actually did more harm than good, and kept the economies from recovering.

When FDR became President, he initiated huge government programs to "help" further. They drained what little money was left from the economy, and turned a serious Depression into the Great Depression. FDR's (and other world leaders') govt programs prolonged the depression far beyond anything ever seen in history. After several years of the crisis, an unusual drought swept through the U.S. midwest, ruining many farms and making things worse (if that was possible). Previous economic crashes had been equally serious or even worse (The Panic of 1837 caused more than 50% unemployment, the Great Depression "only" got up to 25%), but for all the previous crashes, government stayed out of it and did not try to "help", and they all recovered in a few years.

The Great Depression became Great when government tried to "help", and did all the wrong things. This prolonged the Depression for more than a dozen years, and only the massive, frenzied production efforts for World War 2 put enough people back to work to make up for them.

[fj1200]

FDR had nothing to do with the starting of the Great Depression. It was pretty much under way by the end of 1929, and FDR didn't become President until 1933.

Glad we agree. ;)

[Robert A Whit]

It was irresponsible behavior by Wall Street that led to the Great Depression, just like irresponsible behavior by Wall Street and government that led to our Great Recession.

Looks like it's over now, though --- a robust Wall Street recovery is on, hopefully the rest of the economy will follow.

Milton Friedman won the Nobel prize proving that it was Government, specifically the Federal Reserve that caused the crash of 29.

FDR followed the Hoover policy but we know that it failed to work.

[gabosaurus]

FDR's reputation was rescued by WWII and his actions in opposing Germany. What is glossed over is that he needed to repudiate virtually every interventionist policy he implemented, and ignore his top advisors, in recruiting big business in developing the war machine needed to win.

FDR needed a way to enter World War II, both to save the economy and to repudiate his interventionist promises. Which is why he allowed the Japanese to bomb Pearl Harbor. Even know he knew it was coming.
Read about it. The whole thing is fascinating.

Some believe Shrub Bush did the same thing in Sept. 2001.

[fj1200]

FDR needed a way to enter World War II, both to save the economy and to repudiate his interventionist promises. Which is why he allowed the Japanese to bomb Pearl Harbor. Even know he knew it was coming.
Read about it. The whole thing is fascinating.

Some believe Shrub Bush did the same thing in Sept. 2001.

All very interesting. But doesn't make this...


Which, of course, led to the Great Depression. :cool:

... any less incorrect.

[Robert A Whit]

FDR needed a way to enter World War II, both to save the economy and to repudiate his interventionist promises. Which is why he allowed the Japanese to bomb Pearl Harbor. Even know he knew it was coming.
Read about it. The whole thing is fascinating.

Some believe Shrub Bush did the same thing in Sept. 2001.

FDR no doubt was very aggressive towards both Germany and Japan. Day of Deceit claims FDR planned the Jap attack. Each person will have to read the book and it's footnotes and attached proofs and decide for themselves.

Some who think that about Bush probably are having mental health treatments.

[gabosaurus]

The seeds of the Great Depression were planted in 1919 with depression spreading across Europe. There was also extensive too much planting and harvesting of crops through methods that later led to the Dust Bowl in Middle America.

American economic policies of the time were primarily laissez faire. Businesses were totally unregulated and for sometime things appeared to fine. American businesses reported record profits, production was at an all time high.
The problem was that while earnings rose and the rich got richer, the working class received a disproportionally lower percentage of the wealth. The uneven distribution of wealth became so bad that five percent of America earned 33% of the income. What this meant was that there was less and less real spending. Despite the fact that the working class had less money to spend businesses continued to increase production levels.
Too much of the American economy became "paper money" and existed only on bank notes. The American government at the time was too busy living it up and never noticed.
When the margin was finally called, the economy collapsed.

[avatar4321]

All very interesting. But doesn't make this...



... any less incorrect.

Doesnt make her new claim correct either.

[fj1200]

The seeds of the Great Depression were planted in 1919 with depression spreading across Europe. There was also extensive too much planting and harvesting of crops through methods that later led to the Dust Bowl in Middle America.

American economic policies of the time were primarily laissez faire. Businesses were totally unregulated and for sometime things appeared to fine. American businesses reported record profits, production was at an all time high.
The problem was that while earnings rose and the rich got richer, the working class received a disproportionally lower percentage of the wealth. The uneven distribution of wealth became so bad that five percent of America earned 33% of the income. What this meant was that there was less and less real spending. Despite the fact that the working class had less money to spend businesses continued to increase production levels.
Too much of the American economy became "paper money" and existed only on bank notes. The American government at the time was too busy living it up and never noticed.
When the margin was finally called, the economy collapsed.

A recitation of presumptions does not a cause of the GD make. The lie is that Hoover was laissez-faire; nothing could be further from the truth.


Doesnt make her new claim correct either.

I was just going to let it slide and point out the distraction. :)

[Robert A Whit]

The seeds of the Great Depression were planted in 1919 with depression spreading across Europe. There was also extensive too much planting and harvesting of crops through methods that later led to the Dust Bowl in Middle America.

American economic policies of the time were primarily laissez faire. Businesses were totally unregulated and for sometime things appeared to fine. American businesses reported record profits, production was at an all time high.
The problem was that while earnings rose and the rich got richer, the working class received a disproportionally lower percentage of the wealth. The uneven distribution of wealth became so bad that five percent of America earned 33% of the income. What this meant was that there was less and less real spending. Despite the fact that the working class had less money to spend businesses continued to increase production levels.
Too much of the American economy became "paper money" and existed only on bank notes. The American government at the time was too busy living it up and never noticed.
When the margin was finally called, the economy collapsed.

Business has long been very regulated. A rather well known suit that ended up in the Supreme court dictated to poultry producers that they had to produce this or that or else. The Supreme court knocked that down.

Some confuse making money with wealth.

Many lottery winners for instance got plenty of money and had wealth. But not knowing how to properly handle wreath, they ended up broke.

Generalizations put forth by Democrats wind up wrong and in essense are not more valuable than lies. The defeated Germany was wracked by the depression but most of the depression hit them the hardest. But it was Hayek that moved to England that tried to explain to the Keynesians why this would come back to bite them too.

I agree that the dust bowl happened but not only for poor farming practices. The severe heat waves and drought were to blame as well.

One might suppose that the outstanding economy of the 1920s could have staved off any depression. Sadly the Feds created a very tight money condition and that and Smoot Hawley tariff harmed the USA. This country was well off laissez faire by 1900. It got worse due to the 16th and 17th amendments.

Wealth is not income.

To explain this to you will take forever.

But to give it a short try.

A guy owns property in North Dakota in 1950. Land was very cheap.
Same man owns same land in 1970. Land still cheap and man has little wealth.

Same man owns same land by 2000. Land prices still cheap.

Oil in huge quantities suddenly discovered.

The man is very wealthy. And when he removes the oil, he has a large income. Had he known of the oil earlier on, he could have been wealthy sooner.

Another point is the way wealth is accumulated. Most wealth is not accumulated as the rich accumulate it.

The middle class is not doing something that automatically leads to great wealth. They work for hourly wages.

Take the huge farmer. If he has a lot of seeds on hand or buys them, he can create wealth from planing seeds creating a lot of wealth. He does not measure this in hourly wages. A sudden drought can wipe him out.

Much wealth is in stocks. And most of the middle class does not devote much into owning stocks.

When you measure the rich to the middle class, it is apples and oranges. They don't obtain very much way each of them uses. The non wealthy use a system to obtain funds that is vastly inferior to the ways of the rich.

You simply can't compare them to each other.

The rich are able to spend far more money than the middle class.

The working class got hurt due to tight money policies by the Feds and further hurt by Smoot Hawley. However, even the rich paid a high price. Stocks fell very fast and for some of the wealthy, wiped them off the map.

Milton Friedman puts this at the root of the problem. A very wise man headed the Fed reserve during the 1920s. Suddenly he died and his replacement ended up leading to policies of tight money. Friedman says the man that died would not have done that.

[fj1200]

The seeds of the Great Depression were planted in 1919 with depression spreading across Europe.

Actually the seeds of the depression of '20-'21 was planted at the end of the war to end all wars. Harding did not overreact and thus the strong economy of the 20's ensued.


A very wise man headed the Fed reserve during the 1920s. Suddenly he died and his replacement ended up leading to policies of tight money. Friedman says the man that died would not have done that.

Benjamin Strong. You might like Lords of Finance (http://www.amazon.com/Lords-Finance-Bankers-Broke-World/dp/0143116800).


It is commonly believed that the Great Depression that began in 1929 resulted from a confluence of events beyond any one person's or government's control. In fact, as Liaquat Ahamed reveals, it was the decisions made by a small number of central bankers that were the primary cause of that economic meltdown, the effects of which set the stage for World War II and reverberated for decades. As yet another period of economic turmoil makes headlines today, Lords of Finance is a potent reminder of the enormous impact that the decisions of central bankers can have, their fallibility, and the terrible human consequences that can result when they are wrong.

[Robert A Whit]

Thank you for the name of the head of the feds when times were good.

Benjamin strong is a virtual unknown to Democrats but when he died, it hurt the economy of the USA. I am going to read Lords of Finance as recommended to me. Only though if the public library has it. My library in my view is part of the so called liberal ideology since when I try to locate conservative books there, they are few in number. Books backing up liberals are easy to find.

[aboutime]

Not really a good thing to celebrate in my opinion. But, back then. Americans were looking for someone to trust, and FDR, despite his unwillingness to tell America he had Polio...became that leader they could trust.

As for it being MARCH 4th. My grandfather, long ago. Once told me March 4th was Old Soldier's Day..as in MARCH FORTH!

[Robert A Whit]

Not really a good thing to celebrate in my opinion. But, back then. Americans were looking for someone to trust, and FDR, despite his unwillingness to tell America he had Polio...became that leader they could trust.

As for it being MARCH 4th. My grandfather, long ago. Once told me March 4th was Old Soldier's Day..as in MARCH FORTH!

Why must you always start arguments?

[aboutime]

Why must you always start arguments?


What argument would that be Robert? Show us. Demonstrate what argument you are referring to with your words. Please?

I am really getting a good lesson from you. First time I've ever had such a confrontation..for no reason. With an ASS HOLE like you.

[Robert A Whit]

What argument would that be Robert? Show us. Demonstrate what argument you are referring to with your words. Please?

I am really getting a good lesson from you. First time I've ever had such a confrontation..for no reason. With an ASS HOLE like you.

Now you may get it. When you operate that way, and I ask you why you post the same way, you act all innocent.

And your name calling suits you.

You started this with me and I intend to finish it.

Watch you pretend you are innocent again. It is how you operate.

[Kathianne]

It was irresponsible behavior by Wall Street that led to the Great Depression, just like irresponsible behavior by Wall Street and government that led to our Great Recession.

Looks like it's over now, though --- a robust Wall Street recovery is on, hopefully the rest of the economy will follow.

While there were many underlying causes of the Great Depression, none played so great a role as the overvaluation of stocks leading up to 10/29.

So it may well be today. There are no visible reasons for the price of stocks to be where they are. Demand is nearly non-existent; unemployment is very high and folks have stopped looking for jobs; the government is going to fail with 'safety nets' anyone with a brain and ability to read knows that; the rest of the world is in worse conditions, currently, but that may well be short lived.

[fj1200]

While there were many underlying causes of the Great Depression, none played so great a role as the overvaluation of stocks leading up to 10/29.

So it may well be today. There are no visible reasons for the price of stocks to be where they are. Demand is nearly non-existent; unemployment is very high and folks have stopped looking for jobs; the government is going to fail with 'safety nets' anyone with a brain and ability to read knows that; the rest of the world is in worse conditions, currently, but that may well be short lived.

Disagree. Being "overvalued" is not a trigger for the "crash."


Our results support Fisher’s view. A conservative estimate of the fundamental value ofU.S. corporations in 1929—which assumes as low a value for intangible capital as observations
allow—is at least 21 times the value of after-tax corporate earnings (or 1.9 times gross
national product or GNP). The highest estimate of the actual 1929 market value of corporate
1stocks (based on samples of publicly traded stocks) is 19 times the value of after-tax corporate
earnings at their peak in 1929 (or 1.67 times GNP). This is strong evidence that Fisher was
right: stock prices in the fall of 1929 were a little low relative to fundamental values.
http://www.minneapolisfed.org/research/sr/sr294.pdf


Scott Sumner recently wrote (http://www.themoneyillusion.com/?p=19272), “studies have shown that stocks were not overpriced in 1929.” This observation surprises many people. They’ve been led to assume to stocks were wildly overvalued in 1929, but carefully looking at the evidence shows that that really isn’t the case.
While stocks did soar during the 1920s, so did earnings and dividends. Stocks exploded higher in 1929, especially after April. The Federal Reserve also stepped in by raising rates a few times.
http://www.crossingwallstreet.com/wp-content/uploads/2013/02/image1307.png

http://www.crossingwallstreet.com/archives/2013/02/how-overpriced-were-stocks-in-1929.html

Of course anything is always claimed as dramatically overvalued once the crash happens but a crash is almost predictable when the government starts a trade war under the guise of protecting the farmer and is immediately retaliated against by every major trading partner.

[Robert A Whit]

While there were many underlying causes of the Great Depression, none played so great a role as the overvaluation of stocks leading up to 10/29.

So it may well be today. There are no visible reasons for the price of stocks to be where they are. Demand is nearly non-existent; unemployment is very high and folks have stopped looking for jobs; the government is going to fail with 'safety nets' anyone with a brain and ability to read knows that; the rest of the world is in worse conditions, currently, but that may well be short lived.

I agree with FJ1200

But, so does Milton Friedman.


http://youtu.be/EY-HYUFlCPs

[Kathianne]

Hey, no problems here, Robbie. I'll bow to your better links. No doubt.

[Robert A Whit]

Hey, no problems here, Robbie. I'll bow to your better links. No doubt.

It helps that I have several of Milton's books on hand.

The video i posted however does not go into the detail that Free to choose does. Money Mischief is awesome in explaining how money works. Also, the book by Amity Shlaes is of immense help. Her book and I have read all these books is called the Forgotten Man. Well worth reading.

[fj1200]

It helps that I have several of Milton's books on hand.

The video i posted however does not go into the detail that Free to choose does. Money Mischief is awesome in explaining how money works. Also, the book by Amity Shlaes is of immense help. Her book and I have read all these books is called the Forgotten Man. Well worth reading.

I liked Forgotten Man, if you're a glutton for punishment you might try... (also likely available at your local library ;) )
The Great Depression: America 1929-1941 (http://www.amazon.com/Great-Depression-America-1929-1941/dp/0812923278)
I disagree with the author but a good perspective on the other side of the argument. I especially liked where he said the New Deal didn't really help end the GD. :cool: