Doesn’t the human race EVER learn? Why must we continually have to go through the same pains, trials and tribulations that our parents, grand parents and great grand parents went through? Same with the automobile industry. Same with how our nations handle their affairs– economics included. Even politics. Forever, politics.
1928: Times were “Terrific”. The “Roaring Twenties” they called them. After a short, sharp, 18 month long economic recession in 1920 – 1921, where the deadwood and dry brush was cleaned from the U.S. economy by an economic forest fire, new growth came along and prospered.
Even so, Chevrolet had come in at number one, selling 1,193,212 cars against Ford’s slow ramp-up of production of 607,592. Willys-Overland and sub-marque Whippet were third at 315k cars, with Hudson and sub-marque Essex at 282,203 following at number four. The total new vehicle market in the United States was 4,361,579.
Henry Ford finally listened to his son, Edsel, replacing the ubiquitous Model T “Flivver” with a new Model A car styled somewhat like a shrunken Lincoln. Yes, the great Henry Ford nearly destroyed his own nascent auto company with his stubborn demand that no change be made to what had been successful for so long. The Model T was his alter-ego, emphasis on ego. Finally, the market spoke and he at long last heard – at huge cost to his son who possibly alienated his father from that time on.
By August 1929, car sales dropped precipitously – even prior to the Great Depression which began on October 29. Even so, 1929 new vehicle sales amounted to 5,337,087. August car sales gave a warning that nobody heard.
1930 sales: 3,510,178 (a 34.2 percent drop year on year).
1931 sales: 2,472,359 (a 29.5 percent drop year on year)
1932 sales: 1,431,469 (a 42.1 percent drop year on year, a 73.2 percent reduction in sales compared to 1929. An auto market only a quarter the size of four years before).
1933 sales: up 38.7 percent year on year, to 1,447,018. (Still only about a third of the size of 1929).
1934 sales: up 45.5% year-on-year, to 2,669,963 (a 45.5% increase year-on-year). An auto market less than ½ the size of 1929.
The Great Depression dragged on until 1942, only interrupted by the great build-up of war materiel for America’s entry into World War II. Recently, only a year or so ago, people in charge of “The Fed” reluctantly admitted that the actions – or inactions – of their forbearers had not only caused, but exacerbated the Great Depression. “We’re sorry, we won’t do it again.”
So what are they doing now? Pretty much the same lever-pulling “never mind that man behind the curtain” antics that caused the ruination of the nation some 79 years ago. Throwing more paper money into a fire does nobody any good.
And things in 2008 are moving much faster than 1929. We have mountains of cash being thrown into a fire. The bail out with taxpayer money is for the sole “benefit” of the elite wealthy bankers.
Reminiscent of the Titanic, but instead of ladies and children getting the life-boats, it’s first class male bankers passengers, only, thank you – and the rest of you get locked into the hold to go down with the ship. Tough shit. We’re suddenly aware, as a people, that the politicians sworn to protect and “serve” us all have just locked us into a doomed ship and given the life rafts to others.
Are bank holidays next? Iceland’s economy has totally collapsed just within the last few days, the world’s economy is ever more interwoven. Messrs. Smoot and Hawley are ghosts now, but they are likely to begin haunting us again with protectionism rearing its head, further exacerbating the depth, length and longevity of the oncoming tsunami, just as happened in the 1930’s.
Much like our current “choices” between Presidential candidates, we can choose protectionism and certainly wreck our country, or choose a free market and watch it continue to be wrecked as it has been over the prior 40 years, when corporate managers began to decide to export jobs overseas in earnest. Is there a third way?
Yes. Ron Paul and others have been warning about the possibilities of all of this happening, and was ignored or received derision.
The underlying problem? As always, with humanity: a lack of morals. Corporate managers wanting more power and money at the expense of others. Union leaders and members wanting more power, money, less work and more influence at the expense of others. Politicians wanting more of everything and no accountability. Likewise bankers and financiers.
So how will this all affect Detroit, Inc? We’ll surmise about what might be happening very soon, in our next installment.
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menno: nearly all academic macro-economists will tell you that your comparison of the current economic situation with the Great Depression is very much off. And Ron Paul, with all his merits, believes in Austrian economics – which is a type of economics that virtually no scholarly articles have been published about in the last 30 years, and that has its base in the 30s and 40s. To stay in car terminology: Ron Paul’s sense of economics is stuck in VW Beetle territory.
The notion that protectionism will certainly wreck our economy however is considered a near certainty among economists.
While I’m not fan of protectionism, no one has come up with another way to keep the tide of globalization from washing all our jobs overseas. We can’t all work at Wal-Mart.
There has to be a winner in this industry in the US. I think it will be Ford. GM is too big for its market share, Pontiac, Buick, and GMC have to go. GM will be Chevy and Cadillac after they pay all the P B and GMC dealers off. Ford already has a two brand structure, they have no independent Mercury dealers, so there is no cost in eliminating that brand. The only economical way for GM to get to two brands is backruptcy. Maybe it will work maybe not. Chrysler is done, Nissan will buy them and make Dodge trucks and Jeeps. So Ford will be the winner, at 2.50 a share its a good buy too. The current climate will just shake the tree, with lots of fallout. History will be repeated yet again.
And things in 2008 are moving much faster than 1929. We have mountains of cash being thrown into a fire. The bail out with taxpayer money is for the sole “benefit” of the elite wealthy bankers.
Not entirely true. What we learned from the Depression is that you must, must, MUST keep people gainfully employed. Once the workforce starts contracting, the death-spiral of reduced consumer spending takes hold until, well, I’m not sure. We had a war last time to break us out of it.
It stinks to essentially pay out Wall Streeters, but it hurts to let hundreds of thousands of jobs fail because available cash is evapourating. If the captains of industry and government have an iota of sense (I know, I know) their goal should be to stabilize employment to the point where wed have sustainable consumer spending with a solid foundation. You do not want freefall.
Ron Paul and others have been warning about the possibilities of all of this happening, and was ignored or received derision.
Ron Paul and other libertarians are precisely wrong on how this should be handled, but yes, the wa. Market corrections are always brutal, and the point of government regulation is to minimize said brutality by a) preparing for it in advance and b) discouraging rampant profiteering that’s beneficial to the captains of industry but harmful to everyone. Good regulation is best. Poor regulation and no regulation are functionally equivalent at times like this.
What happened here was that, in the hunt for profit, government let go the reigns and allowed the cart to run clean into a brick wall. No one, but no one, was going to challenge the free-market ethos when times were good–or worse, things got too far before the problems were noticed and they didn’t want to be the regulatory pinprick that burst the balloon.
Alan Greenspan is going to be looked on very, very badly in all this.
Robbie, thanks for your comments.
Here’s my video response: Old school 1930’s tech.
http://www.youtube.com/watch?v=UKf4dsn9Zs0
vs. 1970’s tech.
http://www.youtube.com/watch?v=caOqD54oxRA
(OK these are only for irony & humor, see my 2nd comment below!)
A quick search inside WSJ.com will show that Icelandic banks have been on ‘thin ice’ (couldn’t resist) for some time – due their own poor risk management. The goings on this past month can only be blamed for giving them the (eventual) nudge over the edge.
See, that’s what happens when a country is full of people with no last name….. (and you thought I could not find anything derogatory to say about Iceland)
While I’m not fan of protectionism, no one has come up with another way to keep the tide of globalization from washing all our jobs overseas. We can’t all work at Wal-Mart.
It would be nice if developed countries were as stringent in enforcing human rights and environmental standards in their second- and third-world trading partners as they are with WIPO or IMF enforcement.
Of course, that’s socialism..
Doesn’t the human race EVER learn?
No. Humans always think that they’[re better and smarter than their ancestor, but having GPS and blackberries does NOT make us smarter. If anything, it just exacerbates our “herd” attitude.
And in an era where studying history is looked down, and where people (and in particular politicians) use history only as soundbites, I predict we’ll be in ever increasing trouble, as we’ll forget the painful lessons of the past.
Although I despise greed, I believe it’s actually arrogance that led us where we are now, i.e. the belief that we’re making the right decisions while in fact they are generally subjective, reptilian-brain decisions.
Re: Ron Paul. I’m not overtly familiar with his brand of libertarianism, but I can talk about the founder of classical economics: Adam Smith. While he makes a lot of sense, his assumptions mean that his theory cannot be applied in practice, just like marxism. The invisible hand works only if the participants to the market have access to objective information (1) and take rational, objective decisions (2).
For a very long time, 1, was impossible. With the rise of the internet, it is now possible. However, the sad truth is that most of us are too dumb or lazy to check for information and facts. I spend maybe 1 hour a month looking after my 401(k), which is not nearly enough to gain meaningful information.
Thus, 2 is pretty much out of the picture. But even with instant access to perfect information, we’d still make stupid decisions. I mean, EVERYBODY knew that house prices couldn’t go up forever, but we all though we could “beat the market”.
Ahh yes, economists: they can tell you why the last depression occured but not how to avert the next one. It seems the Dismal Science is not science after all.
The Beetle vs. Commodore Youtube video comparisons tells us exactly nothing. Are you asserting that 1930s technology was superior to 1970s based on a couple of video which don’t even tell us the relative speeds of the two crash tests?
The action by today’s governments is in marked contrast to what happened at the onset of the great depression. Back then the government mindset was to let things crash and burn as the magic of markets would cure all. Today we have massive intervention. I would argue that the deregulatory fervor which started with Reagan was let to run to excess and brought us where we are today.
Newsweek recently published a very interesting article by Francis Fukuyama on this subject:
http://www.newsweek.com/id/162401/page/1
As for trade and the boogieman protectionism: It seems obvious to me that over time no large economy can consistently import more than it exports and live to tell the story. Vigorous trade is good, what with the doctrine of comparative advantages and all, but imbalanced trade is simply unsustainable. We are now in the midst of a melt-down where a number of clearly and obviously unsustainable group behaviors are coming to an end all at once. Spending more than you earn, whether on a personal level or in global trade, cannot persist over the long term.
Is the problem deregulation or lack of enforcement? Is the problem deregulation or spcial-interest regulations to support certain industries, geographic locales, or poltical pressure groups?
Also, trade is only one variable. Nations themselves can be sources or sinks of wealth so it is simplistic to say that a negative balance of trade cannot go on forever. Whether a negative balance of trade is a good idea is another thing but it is not, in and of itself, an unstable situtation.
Morea: Ahh yes, economists: they can tell you why the last depression occured but not how to avert the next one.
Economics is the classic example of a pseudo-science. It is great at explaining past behavior, but worthless at predicting future behavior. Same thing with psychiatry.
And in an era where studying history is looked down upon….
This is an era when “smart” is looked down upon. Can’t be seen to be smart, that’s elitist.
That pisses me off. When did intelligence become a liability in a leader? We vote people in who a) don’t make us feel stupid by virtue of seeming less intelligent than we are, and b) on the grounds that they’re the kind of person we’d want to go to drinks with.
Look, if I was voting for the leader of the free-goddamn-world, I don’t want him to talk or think like Forrest Gump.
Hi John.
The videos were not to be taken as serious commentary, but more ironic and humorous.
In other words, a lot of people are stressed right now, and it’s probably better to laugh, than to cry.
Even President Hoover tried pulling levers, followed up by Roosevelt doing it even more so, and nothing helped.
Contrast the Great Depression – where two Presidents (the first, eventually not immediately) tried intervening in every way possible to end it – and only seemed to make it worse – against the 18 month long short, sharp recession/depression of 1920-1921 where the bankers were left to sort out the problem themselves, or die trying.
I’m not a sage with all the answers, I’m only trying to put one view forward and encourage commentary, independent thinking and friendly debate.
I have to completely agree with you about unbalanced trade. Balance is the key word, here, isn’t it? Another way of saying it would be responsible behavior, or even good stewardship.
Thanks for commenting.
By the way, a colleague of mine kind of freaked out about the relative safety of the old Beetle (since he does drive one as a daily use vehicle) until I showed him that crash video. The post 1967 Beetle with collapsing steering column is not so much a death drap as most other cars engineered even in the 1970’s, 1980’s or 1990’s, in some cases. Or, even now, if you’re talking about Chinese-marque cars.
As for the Holden, well, I think the speed was “up there” (unknown though) – and it sure tells me that if I’m kidnapped by the Aussie mafia and stuffed into a trunk (boot?), I might come out alive in a wreck… (tongue in cheek).
John Horner: Spending more than you earn, whether on a personal level or in global trade, cannot persist over the long term.
Exactly right, John!
Seems like our elected
prostitutesofficials thought it would be a great idea to mortgage the country to China. And if we sent all that cash to OPEC, it is still no problem. Dubya will ask them nicely to pump more oil. And if that doesn’t work, he may even send the heavy gun in to negotiate. Too bad Cheney couldn’t pull it off, either.Of course, it won’t be long before some Kool Aid drinker claims it all part of a ingenious plan: why spend money fighting Al Qaeda when you can just kill it by eliminating its funding? And if you happen to kill the global economy in the process, well… you gotta break some eggs to make an omelet, don’t you?
We are now in the midst of a melt-down where a number of clearly and obviously unsustainable group behaviors are coming to an end all at once.
This is a big enough challenge strictly in economic terms, but the political aspects are much more difficult. Politicians have to give up their biggest “unsustainable behavior”: telling the people only what they want to hear. Horner’s completely right that these “unsustainable behaviors” have to go, but like the bad credit, there’s no telling where they end.
The first politician who tells the people what the NEED to hear is the first politician who loses his/her re-election. Good luck with that.
Help the man on the street? No. It is reminiscent of the Titanic. More men from 1st class were saved than children from 3rd class.
Engineer, it’s pretty much a given that most politicians worldwide are prostitutes. What’s up for debate, to paraphrase Churchill, is their price.
If only it were not so. That would be my wish.
Ron Paul and others have been warning about the possibilities of all of this happening, and was ignored or received derision.
The underlying problem? As always, with humanity: a lack of morals.
Yes and no.
The underlying problem with American elections is the outdated electoral college. Until it is eliminated, American elections will continue to be about manipulating the map.
With apologies to Leonard Cohen, democracy is still not coming to America…
Engineer – the electoral college is designed such that the smaller populated states don’t get completely trampled by the big states. I don’t know why you would be in favor of pure democracy, it’s worked wonders in Venezuela?
Yes, a straight “one-man, one-vote” would be best. That way we can demand nation-wide recounts and the Chicago Machine can run up the vote with homeless alcoholics…
Hindsight is always 20/20. Might I suggest that the world is not so clear cut as you have stated. Case in point: how many of us armchair quarterbacks have lost a bundle in the stock market over the last few weeks or watched our 401K waste away. Predicting such large scale world events is not as simple as learning from history. Even the Oil crisis, now winding down, was not the given that many made it out to be.
If we lived our lives, or invested our money like the next great depression, oil crisis, financial crisis was just around the corner, we would all be living in huts as the world would grind to a halt.
It is not true that either the Great Depression or the current economic mess are the result of a purely laissez-faire approach to the economy.
After October 1929, President Hoover took an activist approach to the economic situation, and some of his actions are widely credited with turning what should have been a short and sharp recession into the Great Depression. Candidate Roosevelt then took office, and instituted policies that, if anything, PROLONGED the economic downturn.
A big misconception is that the stock market crash of 1929 “caused” the Great Depression. It did not. The economy had been softening throughout 1929, prior to the crash. The crash itself was a needed correction to excessive stock market speculation that had been growing since 1927. Much like this year’s decline in home prices is a much-needed correction to the completely unsustainable increase in home prices we’ve witnessed since about 2001 or so.
Contrary to popular belief, President Hoover did not sit by and attempt to “let the market take its course.” He tried to prop up failing companies through the newly formed Reconstruction Finance Corporation (does this sound familiar?), instituted some public works programs (not bad, in and of itself, but obviously not enough to prevent the economy from faltering) and jawboned businesses into keeping wages high.
But the crisis deepened for two big reasons. One, the Federal Reserve was inexperienced in handling this type of situation, and believed that inflation was the main concern. Unfortunately, prices were deflating, so the federal government was essentially treating the patient for a fever after he had frozen to death.
Two, President Hoover and the Republican Congress passed the Smoot-Hawley Tariff designed to “protect” American industries. Other countries retaliated with their own protectionist measures. World trade was throttled, and the economic crisis deepened. Smoot-Hawley hit the American auto industry hard, as there was a thriving overseas market for American cars in the late 1920s. Just as the domestic auto makers were faced with the downturn in their home market, they were also hit with a decline in exports when they could least afford it. The devastation caused by Smoot-Hawley was one reason that the Roosevelt Administration worked to increase free trade.
Contrary to popular belief, Roosevelt and Hoover differed very little in how they believed the government should handle the economy. The primary difference between the two candidates was that Roosevelt favored direct relief to individuals (what today we call unemployment insurance and welfare), while Hoover opposed these measures. As governor of New York, Roosevelt presided over the only state in the union that had enacted these measures.
Roosevelt had his own problems – his theories on how gold prices impacted the economy were as nutty as anything put forward by today’s Gold Bugs; his National Recovery Administration was based on the silly idea that competition was BAD for consumers and had been partly responsible for the economic crisis; and many of his punitive taxes discouraged business formation and job growth just when the economy needed them the most.
Fortunately, the U.S. Supreme Court did him a favor by striking down as unconstitutional the National Industrial Recovery Act that had created the National Recovery Administration, and by 1938 even members of his own party were revolting against many of his economic policies.
Today’s problems are hardly the result of a laissez-faire approach to the economy; if anything, they have their roots in attempts to expand credit availability and home ownership to the poor. This led to lax lending standards – under government pressure – and soon spread to throughout the economy. George W. Bush rode into town touting the “ownership society” and made things worse. And the attempts to strengthen regulation of Fannie Mae were primarily fought by…congressional Democrats, with admittedly very little resistance from Congressional Republicans. Just ask Barney Frank…
(Maybe the new regulation we need is to go back to old lending standards, but that would us back where we were in about 1989, when ACORN and other groups were wailing that such practices constituted discriminatory “redlining.”)
Soon, everyone was jumping on the expanded credit bandwagon. GM, for example, discovered that it could inflate sales figures and keep the lines running by offering financing to anyone with a pulse. Pushing looser credit was easier than improving the vehicles, consolidating or pruning unnecessary brands or working with the UAW to get costs under control. Before, many of these people would have been (properly) directed to the used car market, or told to take public transportation.
Now we are rediscovering that many people should never have bought a house in the first place, or should have bought a much less expensive one. And some auto companies cannot survive if only people who can afford a new car can get the loans to buy them. But we can’t stop housing prices from falling, and we can’t indefinitely prop up companies (here’s looking at you, GM) that just aren’t viable in their present form.
I don’t know, gamper, I think that when I followed the advice of guys at
http://www.dailyreckoning.com/index.html
and yanked my 401k monies out of the stock market when it was 14,000 or so, then put them in bonds – pulled them when they said that was no longer viable – and bonds crapped out after that – then put my money into cash & high risk gold stocks 75%/25%.
I’m “winning” in the same way that some guy in a tsunami is “winning” by being the person to be dragged the least distance away from shore.
The guy who loses least, wins. In this environment.
BTW the dow just went under 9000.
Here’s an interesting read for you.
http://www.lewrockwell.com/dilorenzo/dilorenzo59.html
I disagree with one thing – I AM going to vote, and I’m going to vote for the party which Ron Paul suggests. It’s the Constitution Party (known in Michigan as the U.S. Taxpayer Party).
I’m still free to do that. I’m going to look at the glass and see it half full, instead of half empty as this writer Dilorenzo. Otherwise, I have to agree with what he’s written, personally.
Well said, Geeber.
If anyone can point out to me laissz-faire in the America after 1873, please do so.
Honda_Lover: Engineer – the electoral college is designed such that the smaller populated states don’t get completely trampled by the big states. I don’t know why you would be in favor of pure democracy, it’s worked wonders in Venezuela?
Adub: Yes, a straight “one-man, one-vote” would be best. That way we can demand nation-wide recounts and the Chicago Machine can run up the vote with homeless alcoholics…
Snap out of it, guys! This isn’t 1787. We are not trying to encourage people to move to the Wild West. The purpose of the electoral college has expired.
In today’s system the president gets elected by a few hundred votes in FL or a few thousand in OH. Call that fair? Instead of the small states getting tramped (as everyone seems so concerned about), the entire country is getting tramped by a handful of swing states. The biggest states in the union (CA, NY and TX) do not matter (except for funding purposes) because we all know which way they will vote. No wonder we’re electing such quality personnel.
As for Venezuela, or Zimbabwe, or any number of countries where elected officials when beserk: the problem is not “one man, one vote”, it’s “power corrupts, and absolute power corrupts absolutely”. One of the key principles in the US is separation of power. Take that away, and you have chaos. Just think what the current administration would have done…
As for concerns about voter fraud in Chicago: the same issue has been raised in OH, where it might have done a lot to decide the last election. Not saying that it did, but it could have.
Engineer – the Constitution doesn’t care that CA/NY/TX already have their minds made up. The system doesn’t take into account mood-swings.
Engineer: Snap out of it, guys! This isn’t 1787. We are not trying to encourage people to move to the Wild West. The purpose of the electoral college has expired.
The electoral college was not designed to encourage westward expansion. It was implemented because, among the original 13 colonies, the smaller ones (Rhode Island) feared undue influence over the outcome of elections by the bigger states (Pennsylvania and Virginia at that time).
Engineer: The biggest states in the union (CA, NY and TX) do not matter (except for funding purposes) because we all know which way they will vote.
That’s less an argument for abolishing the electoral college than for state residents not voting predictably in every election.
Engineer: As for concerns about voter fraud in Chicago: the same issue has been raised in OH, where it might have done a lot to decide the last election. Not saying that it did, but it could have.
The difference being that, based on history, the structure and character of the government in question and the scope of the allegations, the charges against Chicago have some credibility, while the Ohio charges, when examined closely, tend to fall into the tinfoil-hat category.
I,for one think that ‘living within your means’ is what everyone is touting since the market collapse.
But what are our examples of this..where is the reward for this…where is the “feel good” for this?
the consumer sure doesn’t have many examples ,with savings accounts paying what..1% interest,and our own elected officials writing bad checks..
I for one would love to get a new car,but have other priorities,like making massive credit card debt,just like our government..and now that I cant buy a car with 800 million payments to keep the monthly cost low…oh well there goes the industry!
Engineer – the Constitution doesn’t care that CA/NY/TX already have their minds made up. The system doesn’t take into account mood-swings.
My point remains. It’s absurd that the big three is relegated to the sidelines in a presidential election.
The electoral college was not designed to encourage westward expansion. It was implemented because, among the original 13 colonies, the smaller ones (Rhode Island) feared undue influence over the outcome of elections by the bigger states (Pennsylvania and Virginia at that time).
There is a word for having larger numbers dictate to smaller numbers: democracy.
That’s less an argument for abolishing the electoral college than for state residents not voting predictably in every election.
As a resident of CA I’d love to change that. Other than nuking San Francisco, I can’t think of any way to change it, though. Giving all of CA’s electoral college votes to one party makes no sense. (All you millions of voters who chose the other party: Too bad.) I’m sure residents of TX and NY feel the same way. Your advice then has no practical value.
The difference being that, based on history, the structure and character of the government in question and the scope of the allegations, the charges against Chicago have some credibility, while the Ohio charges, when examined closely, tend to fall into the tinfoil-hat category.
Be that as it may, the likelyhood that a few Chicago drunks could swing a presidential election is extremely remote.
I guess meteorology isn’t science either. I will stop there lest I get scene as being elitist.
As for predictions of this doom and gloom, I believe that prognosticators have accurately predicted 14 of the 5 last recessions.
Maybe we should all stop paying so much attention to Presidential contendors, and pay more attention to the real problem – Congress. Try thinking of a serious problem that we have had over the last eight years that Congress didn’t have a hand in. If you can find one, ask yourself if Congress did anything worthwhile to stop it either.
We are certain that we will get one of the people on one of the tickets (snipers on both sides have likely been practicing). It’s about time we figure out how to mitigate the damage by voting out career politicians at every chance. I am seriously considering voting against all incumbents and any previous office holders who I am not thrilled about.
I am also considering not pulling the lever on many races where I see no differrence in the choices. I suppose it’s a pipe dream, but wouldn’t the parties shape up a bit if millions of us went in to the booth, and only voted for the dog catcher.
“In today’s race, the incumbent got 33% of the vote, but he is only losing by 2 percent. Apparently, many voters simply didn’t like their choices. Amazing! Back to you, Bob.”
Engineer – I hate democracy. I prefer a republic.
I like the dog catcher idea!
maybe Ron Paul?
or…Paris Hilton….
The problem is with congress and the senate.
The president is the LEAST of our problems!
Term limits please,please,please….
Get the pac supported,in trenched lifetime politicians out of office so we have a chance to make America the world standard,not the worlds ‘fall guy’
psarhjinian :
October 9th, 2008 at 1:43 pm
And in an era where studying history is looked down upon….
This is an era when “smart” is looked down upon. Can’t be seen to be smart, that’s elitist.
That pisses me off. When did intelligence become a liability in a leader? We vote people in who a) don’t make us feel stupid by virtue of seeming less intelligent than we are, and b) on the grounds that they’re the kind of person we’d want to go to drinks with.
Look, if I was voting for the leader of the free-goddamn-world, I don’t want him to talk or think like Forrest Gump.
Well, right now the smart guys (Obama/Biden) seem to beating Old and Dumberer (McCain/Palin). So maybe this pattern is ending.
(Even if you don’t like their policies, I think it’s clear that Obama and Biden are more “intellectual” than McCain and especially Palin.)
I’d blame Government in general for the Great Depression much more than the Federal Reserve. Especially the Smoot-Hawley Act.
Psar: I’d say what we should have learned is that we must, must let the correction take place, and must, must not go protectionist. (I don’t see any reason to believe that government make-work hastened recovery, though it had useful effects in keeping people busy as opposed to just handing them food and hoping they stayed out of trouble when otherwise idle.)
There’s a reason the rest of the world recovered so much faster than the US, and it ain’t that they had a better version of the WPA.
Robbie: “But it’s not popular” is a lousy argument against the Austrians, especially given the fall from grace of the Keynesians.
(And one reason Austrians don’t get published? They’re not doing shiny mathematical models and trying to predict next week’s economic activity. Such things look great in journals and make economics look more scientific… but not doing them is hardly a rational basis for dismissing the Austrians as a whole.)
I am seriously considering voting against all incumbents and any previous office holders who I am not thrilled about.
Here’s the problem, courtesy of the beloved New York Times: Mr. Bland goes to Washington, written in the aftermath of the 2006 midterm election.
It comes down to this: any experienced politician sees his experience become a liability (”In 1975 you voted for a tax increase…”). Is it any wonder that the last two presidents were one term governors, without much of a record to speak of? Is it any wonder some see Sarah Palin as McCain’s saviour?
As I said, the dice is loaded in a way that gives us quality personnel…
Honda_Lover: Engineer – I hate democracy. I prefer a republic.
Semantically correct. But WTF does it mean in real life? Does America become a beacon of hope for nations stiving to copy her republican ideals? Weak…
I would argue that the deregulatory fervor which started with Reagan was let to run to excess and brought us where we are today.
I agree. Reagan was just a salesman for this stuff championed by Milton Friedman et al. He was too lazy to be involved in his own administration let alone thinking things through and developing a plan to a sought objective. Supporting this view is the vigorous way he has been sold since leaving office. Bullshit, sufficiently repeated, becomes received wisdom along with its mantras like unions are bad. Huge deficits be damned; deficits from pissing billions away on wars and tax cuts for the rich don’t matter, but money spent in providing health care for kids or investing in public education is bad; can’t have deficits you know. Reagan was a likable guy with a nice smile who looked good in a suit and knew how to sell bullshit provided a compliant media. The compliant media part is a piece of cake in the US since media members who actually do their job and challenge or even question the bullshit du jour are castigated. (Just more liberal media communist stuff.)
But it’s important to understand that lots of people at the top have done very well building to this meltdown. Check into the annual returns of some of these private equity and hedge fund outfits, prior to the past few weeks. Tweaks to the tax code unnoticed by nearly all but the beneficially affected have been hugely important. Wagoner’s $15 or so million per year is a pittance to these people.
Things are different from 1929. Then, the US was ascending; not now. And now we have hellacious foreign debt, the world is pissed at us and tired of our domination and rightfully fearful of our power in the hands of the likes of Cheney and a puppet. So they have both emotional and logical reasons to want our power to be reduced. Plus, as said above, in 1929 people expected to work for their success and advancement. Look at random pictures of shirtless soldiers in WWII vs. what we see plodding along in a mall. Even many of those who bother to finish high school are functionally disabled due to ignorance and laziness.
The morals of those we elect to represent us really tell the whole story.
Ron Paul…the Buickman of Politics.
Rather than trying to ditch the electoral college, I would suggest a system where each state awards it’s electors proportionally by congressional district along the lines of what Maine and Nebraska do rather than the winner takes all scheme in place everywhere else. The overall winner of the state there still gets the two electors who are analogous to the Senators, so there would still be some bonus for taking the overall win in a state.
This way we would have Presidential campaigns which really do need to run a 50 state strategy. Austin, Texas would suddenly have a real say in the outcome, as would upstate New York and the California central valley.
Well, right now the smart guys (Obama/Biden) seem to beating Old and Dumberer (McCain/Palin). So maybe this pattern is ending.
I think that has a lot to do with Bush’ burning bridges than anything else. Were McCain following a less distasteful administration, he’d be far more saleable.
I stand by the point: the number one critique leveled at Gore, Kerry and now Obama (or, if you’re Canadian, against Stephan Dion) is that they’re. too academic, too elitist, too smart.
As opposed to, you know, George Bush. Regardless of the man’s actual ability, it’s his perceived salt-of-the-earth, don’t-seem-too-smart personality that swung a lot of voters. And I find that despicable.
I’d say what we should have learned is that we must, must let the correction take place, and must, must not go protectionist.
I’m not saying don’t let the correction happen. I’m saying anticipate it and reduce it’s impact. Had Greenspan started deflating the bubble years ago and slowing tightening credit, we might not have had the bonanza years we did, but we’d also have avoided the utter cratering of the economy.
Now, though, it’s too late. The correction might well be worse than anything we can contrive ourselves. Taking money our of circulation is about the worst thing you can do in these circumstances, and since you can’t pry a dollar out of a rich investor in these times, the government more or less has to step up to the plate.
It’s the same with fuel prices: if we had tightened CAFE and/or introduced gentle increases in the price of fuel, we (and the automakers) might have been spared the pain of a spike in the price in fuel. But no, we rode cheap gas until we couldn’t get off, then hit the wall.
Reaganomics needs to die, I agree.
Today’s banking meltdown is NOT a product of deregulation. Quite the opposite.
There were regulators and regulation all over the mortgage backed securities. They were created by regulation, they were okayed by regulation, and they were given a stamp of approval by highly regulated ratings agencies. The large financial firms now failing ALL got approval from several regulating bodies on how they accounted for the values of those securities.
It was a case of BAD regulation, not DEregulation.
Reagan lowered taxes drastically, and it worked. Reagan used leadership skills and the tax cuts (which raised revenues) to rally this country’s military and industry in order to force the Soviets into quitting the cold war. GIVE THE MAN HIS DUE.
The whole deregulation thing tagged along for the ride, and is not really understood or properly utilized by most modern Republocrats. The point is that overregulation is BAD. Overregulation is a natural product of too much government. The idea that anything can be made better by deregulation is false, believed by no one of consequence, and, as far as I can tell, NEVER been tried.
What passes for deregulation is simply a change from one set of regulations to one supposedly less onerous set that supposedly allows more free market influence. Unfortunately, they mostly botch the job because politicians are allergic to risk. The key phrase to look out for is “market mechanisms”. Whenever you hear that, think about the California energy deregulation, and then vote no. It has NOTHING to do with free markets, and everything to do with policy wonks thinking they are smarter than God and the rest of humanity.
I have twice opened a business. Having learned about the deluge of government bureaucrats and thugs that immediately take an interest in every part of my life, I won’t likely do it again. Sorry about your children, YOU HIRE THEM.
Been saying pretty much the same thing for years. Have been told to STFU for years. Now I have the satisfaction of saying, “I told you so.”
“Everything is going to burn.
We’ll all take turns.
I’ll get mine too.
This monkey’s gone to heaven.”
Today’s banking meltdown is NOT a product of deregulation. Quite the opposite.
The Gramm-Leach-Bliley Act passed in 1999 and pretty much opened the gates so that anything went in banking. It’s not a Republican vs. Democrat thing; they were almost all in favor of it. The bill passed the Senate 90-8 and the House 362-57. But that’s just one of the major milestones on the path to hell that we’ve taken. The rating agencies, S&P etc. have been too busy collecting fees from the companies they’ve rated to be honest in their ratings. And when things got tense, a realistic rating would have resulted in required shoring up of assets which some couldn’t do; so they let it slide. William Martin would have taken away the punch bowl, but Greenspan let the party go on. And the public borrowed and spent. Happened before and it’ll happen again on some, probably necessarily lesser, scale. Lesser because we’ll be poorer as a nation. Then we can watch the Chinese have their party.
I suspect climate change and/or one or more epidemics will take our minds off this stuff though before long.
psarhjinian :
I stand by the point: the number one critique leveled at Gore, Kerry and now Obama (or, if you’re Canadian, against Stephan Dion) is that they’re. too academic, too elitist, too smart.
One of William F. Buckley’s most prescient observations was that it would be better to be governed by 400 random Bostonians than the faculty of Harvard University. Americans mostly agree with that.
Of course, that’ll most likely change this November. It’s the nature of elections that the Democrats would one day be in charge. We’ll see if responsibility keeps them sane. The ghost of Smoot-Hawley is restless…
One of William F. Buckley’s most prescient observations was that it would be better to be governed by 400 random Bostonians than the faculty of Harvard University. Americans mostly agree with that.
We’re not talking about the faculty of Harvard versus four hundred random people, we’re talking about people deliberately voting for someone who makes them feel smart by appearing stupid.
It’s pandering to the intellectual insecurities of the average voter. And it’s sets an awful, awful social precedent.
The Gramm-Leach-Bliley Act passed in 1999 and pretty much opened the gates so that anything went in banking.
while the law may have changed the regs weren’t reduced at all just changed. but the expectation never did and that meant, if things turned to custard (of course dear boy they never would), that the government would help out.
If things were really deregulated and government said you’re on your own chum (Ha) than this depression/recession/WTF would have never have happened
FA Hayek was an Austrian economist.