Posted on 06/15/2009 6:49:39 AM PDT by FromLori
Because hyperinflation will keep wage rates high enough that minimum wage laws won't matter.
During the worst years of the Great Depression, unemployment hit 25 percent. Our current calamity is so often compared to that era that it worth asking: will things get that bad?
Economist Robert Murphy says they won't. Our government won't make the same high wage policy mistake that cripled the jobs economy in the 1930s, and even if stickiness in wages (due to minimum wage hikes or government support of unions) inflation will actually push wages higher.
From the Mises Institute:
The single biggest blunder Herbert Hoover made was insisting that businesses maintain wage rates after the stock-market crash in October 1929. Hoover adhered to an "underconsumptionist" theory of the business cycle, in which a small shock to business could end up cascading into a full-blown depression if market forces were left to their own devices. In Hoover's view, the worst thing businesses could do in 1930 would be to slash wage rates, because then workers would have even less money to buy products; there would be a downward spiral into oblivion.
The problem was that the United States was still on a gold standard, and so the Fed couldn't inflate the economy with new paper money with reckless abandon (the way it has done in subsequent recessions). When Americans began panicking and pulling their money out of the banks, the overall quantity of money (measured by aggregates such as M1 or M2) fell sharply, declining by about a third from 1929 to 1933.
Unfortunately, this isn't quite the good news that it seems. Murphy predicts that the economy will stall out while we experience the worst price inflation in US history. He calls this "hyperdepression."
(Excerpt) Read more at businessinsider.com ...
Well hell, we’ll all be millionaires in no time...
Too bad it won’t be enough to buy a car...
Don’t you believe it.
This country is losing jobs at an incredible rate.
Much faster than at any other time in our history even the Great Depression.
It would not surprise me if the government is trying to cook the books over the true unemployment figures especially not counting those people who have just given up in despair of ever finding a job.
Those folks are never counted into the figures the government provides.
Part of the reason for what is happening is the anti-business, anti-success, anti-profit mindset of the Obummer administration. Another factor is their insane massive tax and spend policies which are ruining this country financially.
Yeah, we can reeeeeeaaaally count on the government to pay attention to history and not repeat any of the mistakes of the past.
Even if hyperinflation keeps wages high, that doesn’t do anything for the debt markets, housing markets, foreign currency markets, etc.
The 'true' unemployment rate is already well over 15% and going up.
The June numbers are going to be really, really ugly.
Yup worth a thousand words!
The Weimar solution.
I have tried to explain to some dumb democrats that $10 bread is coming thanks to their great leader. One agreed it was coming, but blamed it on Bush and the Republicans. With these dimwits, blaming it on Republicans is so much better than dealing with the problem.
I wouldn’t count on our government learning from history.
“Well hell, we’ll all be millionaires in no time...”
The mortgage, however, would be paid off in an eyeblink! The ones who’ll lose in that scenario will be those with paper money, or stocks. Stocks will die in a hyperinflationary scenario, as they should. I’m not quite sure how companies will pay higher salaries, if they’re not turning a profit...but we’ll see.
Real estate, commodities, and precious metals. Sounds good to me! (I bet grain futures are surging right now due to poor crop outlooks...)
It won’t reach Depression levels. When this mess finally blows up, it will far exceed Depression levels. I see 40% unemployment and violent social upheaval.
The main reason was the mass offshoring/outsourcing of our manufacturing and technological sectors over the 12 years or so. Now the white collar sectors are being hit. The last 8 years were fake. People were living off the housing boom profits which was nothing but a grand ponzi scheme.
Well if you have a variable rate loan it won’t be so pretty.
Rarely does income keep up with inflation, especially hyperinflation.
Unless, that is, the government and courts step in and allows the financial institutions to change the mortgage contract terms to adjust for inflation to protect the mortgagor. That's illegal you say? The rule of law has been subverted in the recent financial and auto industry collapses. The government has already said that the financial industry and auto companies are too big to fail, but you and I.....we aren't. My economics professor predicted this 30+ years ago. I have no reason to doubt he will be proven correct.
“With these dimwits, blaming it on Republicans is so much better than dealing with the problem.”
The libtards seem mentally and emotionally unable to deal with adversity in any other way. All that is bad must be the fault of Republicans. They can’t wrap their twisted little minds around it any other way.
Finally, a catastrophe that could actually benefit me...
People are forgetting that there were no two parent incomes back in the 30’s. Women were a disticnt minority in the workforce. This is the main reason that the depression was so bad.
Yeah, but I just bought a 24" Viewsonic at Costco for $219 last week. Plus, I scored a great deal on 12 g. shells and some more 22LR at WallyWorld. I am getting ready to out the door for another day of spending. I just got my "Old guys" dole. We have become spoiled by "easy money". I
I am also spending money on canned goods and staples. Coffee, I've got 30 bags to drink or barter. I am buying some coffee beans to vacuum pack. At some point, a bag of coffee may buy a tank of gasoline!
I live in Gaults Gulch.
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