Minneapolis Federal Reserve on to something?

Minneapolis Fed ^ | 7/8/09

[FromLori]

Abstract

Studying the experience of countries that have experienced great depressions during the twentieth century teaches us that massive public interventions in the economy to maintain employment and investment during a financial crisis can, if they distort incentives enough, lead to a great depression.

[GiovannaNicoletta]

for tommorrow

[FromLori]

Report...

Those who try to justify the sorts of Keynesian policies implemented by
the Mexican government in the 1980s and the Japanese government in the 1990s often quote
Keynes’s dictum from A Tract on Monetary Reform: “The long run is a misleading guide to
current affairs. In the long run we are all dead.” Studying past great depressions turns this
dictum on its head: “If we do not consider the consequences of policy for productivity, in the
long run we could all be in a great depression.”

[Wissa]

Sadly, I’m becoming more and more convinced that the goal of Obama and many of the democrats in congress is actually to destroy our economy, not to fix it.

[Last Dakotan]

A rock solid conservative buddy of mine is on that board.

[enduserindy]

“if they distort incentives enough, lead to a great depression.”

Fits so many current events, czars and agencies.

[PGalt]

I dunno.

Unproductive firms need to die. This is as true for the automobile industry as it is for the banking system.

The western hemisphere, 910,000,000 people of planet earth has been left with ONE automobile company FOMOCO on this side of the globe. With all of the natural resources and brainpower on this side of earth something is wrong. Isn't it ironic that the misdirected financial oligarchy still reigns supreme in spite of their disdain for everything not under their control?

[FromLori]

Yes very sad and all those UNFAIR Trade agreements pushed on the populace was a huge part of the destruction of America and I have nothing against free trade if it would have been fair but they were not fair to Americans at all. I was referring to the part of stimulous though and the fact that we are looking at a depression.

[PGalt]

I was referring to the part of stimulous though and the fact that we are looking at a depression.

I know. They make some interesting points, but I question the Minneapolis Fed's summation of the root cause.

[FromLori]

? I guess I am missing something.

Is it the part about bad government decisions you are referring to?

[PGalt]

The analysis of great depressions shows that the type of shock that starts the depression is less important than reaction to the shock by the economy and, in particular, the government.

Less important? The Fed is a major player in our current situation. They seem to be misdirecting root cause.

[FromLori]

Oh yes I hadn’t thought of that. I will say however that if our own filthy politicians had not allowed glass steagall to go and handed over the power? They are supposed to be the guardians and have failed miserably because of bribes etc. but I see what you mean. Did you read the article about the FED lie?

http://mises.org/story/3525

[PGalt]

I had not read that one. Thanks for the link, Lori. Thanks for all of your contributions to this forum.

/FR

[FromLori]

So nice of you thank you and your welcome.

[Miss Behave]

Thank you for another huge one, Lori. I’m sending this around to my peeps tonight and will catch up with it tomorrow. BumpMark.

[gusopol3]

I’m surprised how the US economy appeared to have weakened from about 1915 on to 1940.