Posted on 11/20/2007 11:28:46 AM PST by fweingart
In March 1929, the Harding-Coolidge era came to an end. The eight years had witnessed the greatest peacetime prosperity of any nation in history: America in the Roaring Twenties. Early that March, Calvin Coolidge handed the presidency over to Herbert Hoover, who had just pulled off a third straight Republican landslide.
"I do not choose to run," said Coolidge, who could easily have won a second full term. Silent Cal went home. Hoover, whom he privately derided as "Wonder Boy," presided over the Crash of '29 and the first three years of the Great Depression.
History holds Harding, Coolidge and Hoover responsible for the Depression, with Treasury Secretary Andrew Mellon, and Reed Smoot and Willis Hawley of Smoot-Hawley fame, as accessories. As Voltaire observed, history is a pack of lies agreed upon.
Two men debunked the myth that the low-tax, high-tariff policy of the 1920s brought on the Depression. The more famous is Milton Friedman, who proved to the satisfaction of a Nobel Prize committee that the Depression was a monetary phenomenon. The Fed had opened the sluices, and the money had swamped the stock market.
When Wall Street crashed, there came a run on the banks by men who had bought on margin, a depositors' stampede, a bank collapse, a wipeout of uninsured savings and the loss of a third of the money supply, lifeblood of the economy. The Fed never gave the nation the needed transfusions. Hoover and FDR, misdiagnosing the crisis, raised taxes and wrote up new regulations, which was like putting a body cast on a patient in shock from the loss of a third of his blood
The Smoot-Hawley myth, repeated by John McCain in the Detroit debate, was demolished by Alfred Eckes of Ohio University, Reagan's man at the FTC and America's foremost authority on the history of trade and tariffs, in his 1995 "Opening America's Markets."
The point of this brief history: The recent hand-off from Alan Greenspan, the maestro of the Global Economy, to Fed Chairman Ben Bernanke may turn out to have been a lateral far behind the line of scrimmage, leaving Bernanke holding the bag for a recession for which he is no more responsible than was the hapless Hoover.
Last week, the stock market saw 4 percent of its value wiped out. Oil reached nearly $100 a barrel. The dollar fell to record lows against the Canadian dollar and the euro. The price of gold was $850 an ounce, signaling inflation and a worldwide lack of confidence in the Fed's ability or determination to defend the world's reserve currency.
The Chinese, with $1.4 trillion in reserves, perhaps 80 percent in dollar assets, indicated they may dump dollars and move into euros. Merrill-Lynch took an $8 billion hit. Citibank is signaling massive losses from its subprime mortgage debt. General Motors reported an operating loss of $1.6 billion for the quarter and a whopping $39 billion charge that is among the biggest profit hits ever reported
Where does this leave Bernanke? On the horns of a dilemma.
Exposure of all that subprime debt going rotten on the books of our biggest banks, the staggering losses being reported, the inability of homeowners to refinance or borrow any further against their equity, the credit crunch -- all argue for an easy money policy to get capital back into the economic bloodstream.
Thus the Fed has cut interest rates from 5.25 percent to 4.5 percent, thus the howls for deeper cuts, thus the market anticipation of another cut, though the Fed has said no more.
But the Fed is responsible not only for the national economy. It is responsible for defending the dollar, which represents the real savings and wealth of the nation. And that dollar has lost more value in seven years than in any similar period in modern history. A euro, worth 83 cents the year Bush was elected, has risen in value to $1.47.
As the dollar sinks, exporters may cheer rising sales, but at home we will soon find that the prices of all those imported goods from Europe and Asia down at the mall are starting to rise. U.S. soldiers, diplomats, tourists and businessmen overseas are already feeling the pain of a falling dollar.
If a recession is generally a sign the Fed should loosen up, a run on the dollar is a sign the Fed should tighten by raising interest rates to make dollars and dollar-denominated assets more attractive.
But the Fed's raising of interest rates would push up the rates on mortgages, credit cards and auto loans, and push millions of marginal folks into bankruptcy and the country into recession, a disaster for the Republicans.
But, given their free-trade fanaticism and free-spending ways, that fate would not be undeserved. Say a prayer for Ben Bernanke. He may have to eat the football that scrambling quarterback Greenspan tossed to him far behind the line of scrimmage.
Way to go, Homey!!! (grin)
Can we export Congress?
Fine. Worry away. We worried about total thermonuclear annihilation since 1955. It's about time somebody took the watch.
I think the one on PBS has crashed and burned!!! At least the McLaughlin Group doesn’t appear on Channel 6 in Sacramento anymore. Old McLaughin and PJB were really gettin into the anti-war, anti-jew, anti-Isreal, anti-American thing to a scary degree. I think they were both suffering from severe cognitive impairment, trying to qualify for a claim under their Long-Term Care Insurance policies!!! Phhhhhhhhhhhhht!!!
Well, he didn't go goose-stepping down Unter den Linden.
Looking at Hunters percentages there must not be many smart Americans.
***His ask price doubled yesterday at Intrade, the contracts have started to move. As of today, you couldn’t get 40 to 1 odds on my scenario that at 5% polling and getting to the debates in Iowa should reflect a 4% Intrade price, you’d get 20 to 1 odds . Fred’s numbers at Intrade continue to drop, so I suppose that means he’s becoming an even better bargain if you really feel he’s going to turn around.
.
.
Why the smart money is on Duncan Hunter
http://www.freerepublic.com/focus/f-news/1926032/posts
Posted on 11/15/2007 3:43:17 AM PST by Kevmo
But he did consider moving to Nazi Germany; and he did happily accept a medal from his personal friend the Fuhrer, which he never returned; and he did subsequently go back to the US and use his personal prestige to argue against US involvement in a war against Nazi Germany.
Which is close enough.
Tuesday, November 20, 2007
1 US Dollar = 0.68217 Euro
1 Euro (EUR) = 1.46590 US Dollar (USD)
Small multi purpose tractors came in around the early 1920’s. Farmers in the flat lands of the mid west could plant 400-500% more acres. The former profitable, smaller eastern farms could no longer compete. As a result, the agricultural sector of our economy, over 20% at that time, was in a depression by 1927. Ford did not produce any tractors in the US that year.
The transportation sector of our economy also took a huge hit because of the huge increase in productivity caused by the internal combustion engine. Even a 20-30 HP truck could do the work of many horses and wagons. Plus they could do it faster.
Economies can deal with smaller incremental changes, but rapid change, caused by the internal combustion engine, overwhelmed our economy.
When a down turn in manufacturing combined with the recessions/depressions in the farming and transportation sectors, we got the start of the Great Depression.
Both Hoover and FDR made changes that either made things worse or prolonged the depression.
Most economists scoff at the idea that an increase in productivity could cause a depression, but there has never been a time in economic history when the productivity increased such a large amount in such a short period of time.
In the meantime, the government takes the 2.0% economic growth and lops off 0.1% for “core inflation” and states GDP rose 1.9%. Never mind if they deducted the true inflation rate, you would see that we are already in a recession.
No, I didn’t say you misread Friedman, but maybe you’re misreading me now?
It’s widely acknowledged that one of the chief causes of the *crash* of the stock market (or rather, the huge runup prior to the crash, take your pick) was “easy money” via the FED, which worked its’ way into the market for speculation, usually on margin.
Remember when a can of coffee held a pound of coffee?
I thought free-trade was suppose to deflate prices.
“Pat’s a charlatan. When he was running for pres. one of his major planks was that manufacturing was being shipped over seas. Meanwhile the moron was driving a Mercedes.”
************
Pat predicted massive trade deficits in the 1990’s, now were approaching 1 trillion dollars per year. Whats it at now? 800 billion?
The automobile added to the overall productivity but also made the Florida land speculation possible in the 20's. The plunging prices there didn't help the economy. After the depression got going the Fed loosened money (contrary to the article), but it was too little compared to the 10 or 20% deflation at the time. Then they tightened, the government raised taxes, lots of other stupid mistakes.
The analogy today is that the internet and anonymous finance made real estate speculation rather widespread. The economy will take the same deflationary hit that it did then, although it is more diverse so not all sectors will turn down.
“Well, he didn’t go goose-stepping down Unter den Linden.
But he did consider moving to Nazi Germany; and he did happily accept a medal from his personal friend the Fuhrer, which he never returned; and he did subsequently go back to the US and use his personal prestige to argue against US involvement in a war against Nazi Germany.
Which is close enough.”
***********************
2 days after Japan bombed Pearl Harbor, the America First Committee (including Limbergh) honorably disbandoned. Unlike Democrats today, when a Republican is an isolationist, they aren’t traitors.
During the war Limbergh unnoficially taught bomber crews how to run their engines lean, to have a longer range. He was a patriot.
So he liked the Stuka and the ME109, who wouldn’t, those are kickass planes. He’s just a boy with his toys, doesn’t matter what country they are made in. I think even Chuck Yeager test flew a german planes, does that make him a traitor?
what? Thats like saying PC’s would cause a depression. Automobiles made business more efficient like the PC.
it clearly has a similar effect in speeding up change and has to be changing the path money takes through the economy in a analogous way (with the stock market recognizing this fact by pumping up the value of Amazon, Google, etc)...
...the Internet must be hugely disruptive for some market niches that once had it made (Blockbuster anyone?)
We have had the sub-prime housing market meltdown, now effecting credit markets, and very soon auto loans - whose next, as oil is almost $100 a barrel, and the Dollar is at a record low?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.