The Moderate Voice - Latest Comments in Great Depression 2.0, Meet New Deal 2.0

Re: Great Depression 2.0, Meet New Deal 2.0

SparkyJP — Sun, 19 Oct 2008 23:06:45 -0000

Marriner S. Eccles, was the Chairman of the Federal Reserve from 1934 1948

In his 1951 memoir Beckoning Frontiers, Eccles detailed what he believed caused the Great Depression.
Our current situation is eerily similar.

Eccles wrote:

"As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth — not of existing wealth, but of wealth as it is currently produced — to provide men with buying power equal to the amount of goods and services offered by the nations economic machinery.

Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

Re: Great Depression 2.0, Meet New Deal 2.0

Polimom — Wed, 15 Oct 2008 19:07:08 -0000

I think the Democrats need to be very very careful with this.

Rather than put up a whole new post, I wrote my own reaction here.

Re: Great Depression 2.0, Meet New Deal 2.0

DLS — Wed, 15 Oct 2008 18:24:57 -0000

"why NOT look at WPA style programs for roads, bridges and schools and TVA style programs to modernize our (barely) high tech infrastructure?"

It seems to be popular with some. Aside from finding the money to pay for all these things, I asked elsewhere, what will be the conditions for participation in these kinds of programs and what will that mean for costs? Namely, would we have pro-union "prevailing wage" rules, affirmative-action set-asides, hire-American rules, and so on?

I fear these would be the primary objectives in place of the kind of artwork we can see in the mural(s) in the Cincinnati train station, at some state houses, or in the bridges by Conde McCullough in Oregon that I like so much (yep, gummint stuff).

Re: Great Depression 2.0, Meet New Deal 2.0

DLS — Wed, 15 Oct 2008 18:09:25 -0000

You're equivocating, Green Dreams. Hands-off policy is anti-interventionist, even if repealing certain laws (by Dems as well as by the GOP) itself is a hands-on effort by definition. You are on firmer ground if you said that this was still a choice and even an effort favoring some interests over others -- the interests changing when Reagan Entered the Picture [begin ominous music], the favored scapegoat event (featuring the favorite scapegoat and straw man) of the likes of Thom Hartmann.

Re: Great Depression 2.0, Meet New Deal 2.0

JSpencer — Wed, 15 Oct 2008 18:08:04 -0000

I disagree the GOP has no ideas. For some time now they've had lots of ideas, they've just been BAD ideas, you know, ideas like unnecessary war, trickle down economics, choosing to ignore science, pandering to the ignorant, shilling for the rich, pretending environmental problems don't exist, etc.

If the democrats are serious about working for and representing the middle class, then more power to them. It's about time somebody did.

Re: Great Depression 2.0, Meet New Deal 2.0

DLS — Wed, 15 Oct 2008 18:05:55 -0000

Of course they will, Polimom! And to this day I fear misconstruction of the Ninth Amendment as the magic genie that will support demands to meet those fake "rights."

Re: Great Depression 2.0, Meet New Deal 2.0

Polimom — Wed, 15 Oct 2008 18:03:30 -0000

Just so long as they don't decide to dust off FDR's Second Bill of Rights.

Re: Great Depression 2.0, Meet New Deal 2.0

GreenDreams — Wed, 15 Oct 2008 17:53:41 -0000

Obviously, we need to cut welfare to the bone. Corporate welfare that is.

We handed them the keys to the kingdom, all the power and revered them as the "engine of the economy". That policy lies in tatters, whether or not the economy continues to tank. It did not increase jobs, did not increase our competitiveness globally, did not advance "brand America" or improve our trade balance, or "raise all boats" like that "rising tide" of irresponsible borrowing and "investment" was supposed to. None of these things happened, and the right, I guess, is too blinded by self delusion to see that what we have done IS government intervention. It was just intervention on behalf of the rich, the corporations, the lobbyists; in short, the short-sighted and criminally selfish who had no other desire than to grab as much wealth and power as possible with flagrant disregard for the consequences to the middle class and future generations.

We need over 1.5 trillion in infrastructure investment. We have let our house crumble. How will that happen? I assume the GOP idea is (a) ignore it some more and let our kids deal with the crumbling mess, or (b) borrow from China to rebuild and let our kids pay for it. Shockingly irresponsible.

Yes, if we need to invest in infrastructure, and if we need to bring down the unemployment rate, why NOT look at WPA style programs for roads, bridges and schools and TVA style programs to modernize our (barely) high tech infrastructure? We could actually have something approaching the same tech infrastructure as say, Korea and India.

Re: Great Depression 2.0, Meet New Deal 2.0

DLS — Wed, 15 Oct 2008 17:34:56 -0000

"we don’t have the economy we had in 1933"

I'd like to interject that in addition to refraining from remarking on other things to give others a chance to do it first -- an example being recommending trying propane-powered vehicles as one of the alternatives to gasoline if we wanted to reduce air pollution in our metro areas, something available right now that is proven to work, and work better than compressed natural gas (methane) -- I have long thought that in addition to seeking clean, safe, reliable water supplies in the underdeveloped world, why not also concentrate on something the federal government did here in the States in the 1930s and was successful at -- rural area (underdeveloped nation) electrification (and modernization of existing, pathetic systems in those nations).

OK, floor yielded.

Re: Great Depression 2.0, Meet New Deal 2.0

DLS — Wed, 15 Oct 2008 17:31:26 -0000

"A lot of experts think we are headed more towards 70s-style recession than 30s-style depression."

I'd say instead it would be more like a 1990s-style deflationary depression or spiral.

Bernanke is a student of the Great Depression and it seems to me the central banks and governments are acting forcefully to try to forestall deflation, even if details of, say, what the federal government in the US is doing don't seem like the right things to be doing in principle, or politically, or even economically (there is no unanimity on economic policy any more than there is on politics here). I was very disappointed to hear about the reaction in the stock market to Bernanke's statement (provided in the earlier posting I made), because the reaction was childish and was idiotic. It reminded me of the call-options buyers and day-trader types my buddy and I in Atlanta worked with -- they thought Greenspan was Einstein, until he made a remark critical of the economy or of investors; then the market would drop, then they would be shouting about what a dunce and a mischief-maker Greenspan was.

There is only so much that governments can do -- we cannot be made to borrow more money if we don't want to do this -- and whatever is done will take time, and it will be experimental.

Re: Great Depression 2.0, Meet New Deal 2.0

DLS — Wed, 15 Oct 2008 17:24:30 -0000

Irresponsible! This is not the second Great Depression and of course there is no need for a Second New Deal (a derivative -- pun intended -- of a dream long held, since the 1970s, by the Left who felt that "progress" was stalled after the 1960s).

Both the hype about the current economy and the subprime-mortgage-debt problem and housing-bubble end, and the incredible ambitions of advocates for government interventionism are ridiculous.

So is the childish response to Bernanke's statement today in New York -- _naturally_ there isn't going to be any kind of instant recovery of the economy, idiots!

http://online.wsj.com/artic...