Saturday Open Thread: Black Tuesday Edition
by PubliusToday, in 1929, the stock market had its final crash, ushering in the Great Depression. (And, yes, it was government policy which ushered in the crash.)
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Imagine that, government caused another one….history is a great teacher
Now that Obumblers Bubble prematurely burst (Green jobs), and the US's credit has been downgraded, we may be in the makings of a depression. Our best friends, the Chinese are bound to run out of money to loan, and even so we're over the edge of ever being able to pay more than the interest- we're in deep dodo.
We need to get the goverment to run on fumes, and get non-union manufacturing back to the states. We have little of value to sell to other countries anymore. Our mineral resources are politically tied, and our ability to provide goods and services is dying with the tradesman. Our educational system is not bringing out new intellectual or skilled labor to replace them. But it's the only way our country can bring back the revenue that we so graciously gave to other countrys.
Or…..
we can start to drill and dig our way out.
while starting to teach manufacturing skills again.
Yeah the Government repealed Glass Steagal which was created following the depression in order to prevent financial meltdowns of that type happening again. Since it's repeal we have had two economic busts in under a decade.
The problem is not a matter of either/or though since it's the axis of the government and big business working together that hurts the market.
I dont see manufacturing coming back here, union or no-union although the former would be a better incentive than the latter, because third world and Chinese labor allows companies profits that they would never be able to replicate with any kind of an American workforce even if you were paying them minimum wage. For instance, and I have this on good authority, Nike's markup before it ousourced was near 100% on it's shoes but with a labor force based in Vietnam and Malaysia it's 400% and not to mention Nike was able to trim it's workforce since factory workers overseas are not direct employees but rather work for the contractor who owns the factory. They also dont have to deal with unions, health benefits, labor regulations, safety, etc.
I've even got to concede that green energy was a scam. Anyone with a brain in their head knows that there is currently no energy resource on the planet that has as much bang for the buck as petroleum. Green jobs and environmentalism in general is just a way to slow down the economy which runs because of oil. In the end we have no choice but to drill everywhere that we can. With the oil that's available there's no reason to even waste time with tar sands and shale and all the rest of it.
That is the bastard part about all this. The only way we can compete on consumer goods is to automate. Here's the problem with that. The work force required to maintain an automated factory vs a previously labor driven factory has got to be more educated, and more dedicated to keeping up with technology. It's also driving in a large way the class warfare that our country is experiancing in the #occupy movement. The middleclass is having a harder time staying middle class if they don't wish to keep up the the techy Jones. I love my Coworkers and want to see them succeed, but if they don't see the use to the information I try to give them, they just aren't going to sit through the lesson. Perhaps the enswer is to redirect the attitudes. Maybe I don't really have an answer after all.
Natural gas as well! tapping into that has no democratic conspiratic reprecusions, and hasn't found limits to it's uses… I'd love to be able to see upgraded technology utilizing its potential.
From some of the researching I have done the Glass-Steagall Act was repealed and twisted due to lobbying by the financial institutions. A number of other Acts, Gramm-Leach-Bliley and the Community Reinvestment, in recent years have caused the economic crisis in 2008. As much as I truly dislike Rep. John Dingell (D-Michigan) on most of his issues, he apparently understood what would happen to banking when the Gramm-Leach-Bliley Act would be passed by arguing that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.
The other drawback to automation is that you actually lose jobs too. I forget where I saw this but there were a number of out work steel workers protesting their lay-offs and the general economic malaise we're all living through and one of them said that the jobs of 10 men were now being done by one man and a room full of computers. Look at what the post office is going through; it's not a matter of government ineffiency its the internet that has beaten them and UPS and FED Ex do a better job of shipping packages. Although technology creates efficiency, safety, and in the end cheaper consumer goods it's effects on our workforce, especially as it applies to low paying jobs like administrative assistants, secretaries, receptionists, factory workers, etc. is something we are going to be dealing with from here on in. that coupled with outsourcing is going to be a serious problem in the future. One of my theories is that it's not going to come down to politics in the end but rather technology is going to completely change the economy. If I have one utopian vision it's that perhaps in the next half century new and better tech will allow us to have infinite resources and an answer to the condition of labor.
Exactly. With Glass Steagall we really see the axis of government and wall street working as Robert Rubin who spearheaded the repeal effort went from being a CEO for Goldman Sachs to a top economic advisor for Bill Clinton.
There has been a lot of debate about the Community Reinvestment Act and the part it played in the financial collpase and even if only a portion of the loans were made through CRA the banking/wall street lobby pushed for looser regulations for home mortgage qualifications because one, subprimes have higher interest rates, two, you can make more loans, and three due to the securitization chain lenders are not on the hook for the loans because they can sell them off to investment banks who then bundled them into CDO's, sold them to investors, and then hedged against them. This is not to say government meddling into the loan business didnt have a huge effect on us. Subprimes are similar to the coming disaster we're going to be facing with student loans; again you have the government handing out money to people who have no collateral, are bad risks, who are likely to default, especially now with the economy the way it is and so many people leaving school with expensive but generally worthless degrees. Obama has now, in order to win some favor from the OWS protesters who are his only chance for re-election, just made the situation worse by lowering the interest rates and saying that if the loan isnt paid within a certain amount of time it can be discharged. Who will wind up paying for the trillion dollar bubble? Everyone else.
The uptick rule was good as well. Tell me, why is it that every liberal that i know says capitalism does not work, then when I ask them what is glass steagall, the up tick rule, dodd frank, short sales, capital gains, progressive income tax, and the history of these subjects none of them have a word to say. They no nothing about any of these things. Then the drone takes over, Wall st Wall st, the rich are richer, there are no jobs……. yet when I discuss these issues with them, clearly pointing out the corruption of politicians and laws as the problem, they do not want to "argue" with me. They wish to impose socialism upon me, but they do not want to discuss it or argue about it, in fact none have been able to even tell me what socialism is, none could tell me what a democratic socialist vs a marxist leninist socialist ideology was. Yet they know capitalism does not work and socialism is the answer. Bring up the USSR, China, North Korea, and they say we just need a "little bit of socialism and those examples are extreme". I do not know if you are a lib, pinko, red, i see your rating is fairly negative, but you made a great point so I value your opinion.
From what i've heard we are sitting on an ocean of natural gas but once again there is obstruction in pulling it out of the ground. Like I said the blocking of coal mining, oil drilling and all the rest is less about the environment and more about trying to stall the economy and create the problems we are now dealing with in order to take political advantage of it.
A bubble leads to a bust, and the culprit was easy credit.
Tariffs would fix that right up.
That one one man in a room full of computers was the one man in ten that was willing to go out of his comfort zone and learn a new technique to his job. He would still require the skills needed to do his job, but now he has to be able to translate them, (and even if he goes so far as to program the computers- TEACH the machine his skills) into the automated machines. He'll hear his co-workers say they want to know- but he was the one going to the schools, working around the machines when they were ground floor etc… It does create a competition in employment that wasn't there before, BUT once again, the one who worked at learning the skill sets has the "unfair" advantage.
Additionally, if we streamline manufactureing and have other countries (as well as Americans) willing to look at American made goods again, there'll be more factories for misplaced workers to work at.
IF (oh that "Only if" clause) we hadn't been messing with the green tech business and instead worked at and invested in tapping into natural gas, we would have had it by now, and Obama would have had his reelection sewn up. That's the bubble he needed.
Admittiedly, I was working for a company that was able to take advantage of the money that Obama gave to all the solar panel companies (and got some great ideas by the way that could rescue the technology!) and then was fired by a rookie manager before the skids hit the floor on solyndra (God watching out for me again!) It's real easy to fall for all this crap even when you know that it's funny money that's pushing it…
We all know by now, where 'government policy' gets us….in over our head, because the government doesn't know how to anything right!!!!
The role of the government, according to the preamble of the Constitution:
Improve
From the preamble to the US Constitution:
1. To form a more perfect Union,
2. To establish Justice,
3. To insure domestic Tranquility,
4. To provide for the common defense,
5. To promote the general Welfare, and
6. To secure the Blessings of Liberty to ourselves and our Posterity.
In my opinion ALL politicians should hold regular jobs, and leave the people alone!! This is WHY our forefathers left Europe, to get out from under tyrannical regimes!!! And, yet, he we go again!!!!
this.
It seems like government is more interested in protecting the crony investors and it's own when financial crisis happen. It's almost is by design— they create a scenario where all those investors have stake in failing X Corp also have it in Z corp that simply can't fail, hence the bail-out to prevent the domino effect.
Back when I worked as a banker, investing in stocks and bonds meant you were at risk for losing it—unfortunately that doesn't apply to the politically connected Fat-Cats.
3 cheers for human nature! Hamster spin cycle history attack!
I watch many of the WH pressers and it's amazing how often Press Secretary, Jay Carney says, "we've come through the worst economic crisis since the Great Depression" in order to give the illusion that his boss is actually making things better. But then, he is compared to FDR and knowing what a mess he made of the economy til the US got fully involved with WWII, I think Obama is following his footsteps (well hopefully not the multi-term part that is).
it's sad that many people lost so much of their 401K in the last few years—this used to be completely unthinkable. In a way they probably experienced the same incredulous feeling those effected by the Great Depression did.
And, it was NOT government policy that got us out of the Depression! Indeed, FDR's progressive policies deepened and extended it.
After years of relentless attacks against the Constitution and in particular the First Amendment, and after five or six failed attempts, Senators McCain and Feingold finally got their stupid bill onto President Bush's desk. And the President signed it. The administration said that we don't believe it's constitutional, but we're going to sign it anyway and hope the Supreme Court knocks it down.
So who does the GOP nominate for President in '08, but the miscreant Senator McCain. So, in '08 there was no good choice for President.
Hopefully there will be a good choice in 2012. A good choice will be as far removed from McCain and Bush and Rove and Obama as he or she can get.
I was chatting with some friends a couple of months ago about the economy and the great depression came up. A young lady (21) stated she asked one of her HS teachers where all the money went during the depression and he did not know, I did not know either. After some reading I informed her couple of weeks later that the Federal Reserve tightened the money supply mean that there was less currency to move around the economy. Explaining how the Fed can tighten or loosen the money supply is not easy for me, it is probably difficult for a 21 YO to comprehend it too. How do you explain that banks today borrow money from the Fed at zero interest then buy Tbills and they actually make money doing this? It is no wonder average Joes are divided over big and small government, we have weaved a tangled mess that is almost impossible to point out a root cause of our economic troubles.
"……..Or…..we can start to drill and dig our way out.
while starting to teach manufacturing skills again……….."
So far this comment is the only one worth noting.
Maybe it's because, unlike the rest,……
you are not a dime store financier.
You're right. The crowd demanding to prescribe solutions understands little of the causes of our problems. And is willfully ignorant of the failed history of the solutions they demand.
Damn history repeating itself !!
Will liberals never learn ?
We are one interest rate spike away from disaster. That monster can't be kept at bay forever. The only way to try is to keep printing money — more and more inflation. The interest rate spike will happen eventually, for one reason or another. It will explode disastrously. In the meantime, we will accelerate inflation.
A fraction of our population are uninformed folks who will not respond well to these troubles. We already see radical troublemakers rising to exploit these people under these circumstances with the goal of toppling the entire system, hoping to replace it with some kind of commie abomination.
But status quo solutions will be wholly insufficient as well. Our best bet to cope with the coming disaster is a tsunami of genuine conservatives at every post in every level of government, and citizens that are braced for a long struggle.
Can you explain the point you are trying to make?
"one of them said that the jobs of 10 men were now being done by one man and a room full of computers"
So what? One man? Who made the computers? Who programmed the computers? Who manages the computers? If we produce more with fewer people then we produce more, you speak as if this is a bad thing, it is not.
Then you go on… "Look at what the post office is going through; it's not a matter of government ineffiency its the internet that has beaten them and UPS and FED Ex do a better job of shipping packages."
What does the Internet have to do with shipping packages? You said it yourself, UPS and FedEx do a better job. If they do then why do you think that is?
You say "Although technology creates efficiency, safety… it's effects on our workforce, … is something we are going to be dealing with from here on in."
What effects? What are you talking about?
Yes, creative destruction…failure…is an essential part of capitalism, isn't it. Investors and businesses that use poor judgment must be allowed to suffer the consequences. Sure it's not 100% perfect or fair. But resources get re-allocated to better use, lessons get taught, and not soon repeated. And none of it requires the inefficiency or cronyism of government involvement. Instead, we reward failure, and predictably, get only more and successively bigger failure in return.
I believe Bernanke attributes the Great Depression to insufficient Fed liquidity. So now he goes to the other extreme.
I'm no expert about all of it either. I know this much about root causes. It always traces back to excessive government / Fed meddling of one kind or another. Least government is best government, and that can only work with a moral people. We have gone way off track on both scores.
It's not really the liberals that need to learn, they are the ones who refuse to learn and never will.
The problem is those in the center – the 'independents' who sheepishly vote for the liberals time after time as they are told to do.
You know, the ones who don't have to buy gas for their car or pay their mortgages anymore.
In our case, the bubble (tech stocks) was not allowed to lead to a bust.
So we got another, bigger bubble (housing), and it was not allowed to lead to a bust.
So we're getting another, bigger bubble (government debt). And the plan so far is, we will not allow it to lead to a bust.
Too late. It's not going to work this time.
Just more cannilbalistic DeadMoCrapp…when will it ever end? Start at the top….purge the party of Death….
Excessive debt, that's either unsecured or secured by overpriced items (stock margins in 1929, housing in 2008, student loans 2011), is one of the hallmarks of a bubble. When this get followed up by stupid government interventions like Smoot–Hawley, Glass–Steagall or the American Recovery and Reinvestment Act, things continue to go downhill.
"I believe Bernanke attributes the Great Depression to insufficient Fed liquidity. So now he goes to the other extreme."
From my understanding of the media kudos aimed at Bernanke, you are correct, which indicates that Bernanke is the least qualified person in the room at the Fed meetings. Perhaps if Bernanke had become a politician instead of a banker, he would have imposed a tariff twice as high as Smoot Hawley, on the theory that the cause of the Depression was that the tariff wasn't high enough and thus didn't protect the particular sectors of the economy which the tariff was intended to protect.
But since he is a banker, he has no influence over fiscal policies and instead focuses on monetary policy, and in that respect he takes the exact wrong lesson away from the Depression.
Former Wall Street Journal editorial page associate editor Jude Wanniski points out that the money supply did indeed decline during the Depression, BUT that it was completely attributable to the fact that Smoot Hawley had collapsed world commerce,, therefore there was less money required to faciitate transactions, ie, a decline in the money supply. As I understand it, though the US was not on the gold standard at the time, there was still a connection to a commodity standard; it wasn't a totally fiat currency that could be printed without consequence.
While the tariff was collapsing world trade, Hoover's tax increases similarly caused a decline in economic activity and thus a need for money in circulation, which also contributed to the decline in ithe money suppy.
There is no shortage of 'experts' in the Obama administration that don't understand or simply refuse to learn the lessons of economic and political history.
Government policy did cause the great depression.
It spent a ton of money, and was running low on gold. There was a run on the dollar and the Fed was paying foreigners who were bringing dollars with gold. With gold running out, the Fed just contracted the money supply over and over and over. Until the market crashed.
Roosevelt confiscated the nation's gold (and defaulted on the government's debt) and then the Fed started expanding the money supply- with six tons of silver certificates. Then the worst of the depression was over.
They are only parrots of what they have heard some professor spout in class. They did NO
research into the cause and effect of the occurrences though, it would require too much time
and thinking.
.
Government caused the great depression then proceeded to keep it there until WWII began.
Free-range Knucklehead do-gooder's with misguided ideas that don't work…….
The government only repealed *part* of Glass Steagal – the part that prohibited banks and investment houses from being owned by the same parent company. The bill also created the FDIC when it was passed, and FDIC still exists, so the repeal was not of the entire bill. It was the Gramm-Leach-Bliley Act of 1999 that lifted the prohibition on parent companies owning both banks and investment houses.
The PARTIAL repeal of Glass-Steagal was not the cause of the housing market collapse and the concurrent financial crisis.
BTW – it was Clinton who signed Gramm-Leach-Bliley
Isn't it tragically comic that our leaders are fixated on the 1930s, where government meddling transformed a downturn into the Great Depression. And yet they learn nothing about the failures of government.
At the same time, they willfully ignore the grim downturn of 1920, which the country quickly overcame, essentially by getting government out of the way….slashing tax rates with a restrained Fed.
Sadly, our current situation is probably far worse than 1920, owing to incomprehensible levels of debt and entitlement commitments, and segments of society that are brainwashed and rendered dependent by decades of radical progressivism througout education, media and entertainment culture.
We have a long, difficult road ahead I'm afraid.
That's it In a nutshell.
Good questions. Of couse, we're in a competitive world, and the society that functions most efficiently wins. Most people migrate to jobs with higher-level skills. It's a virtuous cycle…mostly. I realize you and most everyone else knows this already.
The disturbing thing about all that for me is it leaves us with an achilles heel. Most people, myself included, are far less self-sufficient than in previous times. Throw some sand in the gears of our advanced economic machine, like disrupting the power or the internet connections, and things grind to a halt, leaving many helpless individuals. I am sure this thought has occurred to some of our enemies.
The video with Peter Schiff at OWS confirms this. Most are incapable of dialogue, of considering new information or of objective critical thought. They just regurgitate some radical pap from leftist professors or whomever, and when that is challenged and exposed as lame and illogical, they quickly resort to insults.
The partial repeal of Glass-Steagall Act from the enactment of the Gramm-Leach-Bliley Act and the Community Reinvestment Act were part of the problems which caused 2007 subprime mortgage financial crisis. These acts were crucial in the formation of "too big to fail" banks and financial institutions. The lack of enforcement and oversight of the Securities and Exchange Commission (SEC) and The Federal Trade Commission (FTC), both government agencies, were criminal to say the least. Actually, when it comes down to it the entire collapse of the economy was really brought on by greed and power.
Black Tuesday? That's RAAAAAAACIST! /sarc
When will they learn that their policies will never work?
Democrats Caused the Financial Crisis, It would appear they were looking for a repeat of the Great Depression. http://www.youtube.com/watch?v=ddExyFkfcfI&fe...
"The time is near at hand which must determine whether Americans are to be free men or slaves."
George Washington
And in 1940, after a second market crash in 37, the republicans tried to run a business man, Wendel Wilke, and the White House went on the attack and made him look like a right wing extremist who would take us back to the post war years. In fact Wilke took a moderate position, to keep what Roosevelt was doing that he thought was working and only modify a few things that weren't.
Sound familiar?
Then in 1941 . . .
Thats exactly what POL POT needed out of his 14 year old death squads, bet OWS has a death squad training camp up an running.
Politics is the art of lying believably . Anyone who trusts a politician would assume that a prostate digital exam is pleasurable or prep for a colonoscopy was enjoyable along with natural childbirth without any anaesthesia. I'd sooner face a mad dog than listen to most liars. A liar assumes that one doesn't have either the knowledge or wisdom to know a lie. I generally let anyone have enough room for self revealing , then I am hospitable to put his/her mind at ease. Then I do whatever is necessary to remedy or assume one is worthy of my trust. A sign beside my door says" caution: caustic personality" so be forewarned. Most of my friends have said that when the chips are down, they know me as a worthy friend or a terrible enemy. Some of the less familiar neighbors don't know what or when I accomplish my comings or goings. These deem me like the FBI, CIA or other secretive people. Truth is that I am as harmless as a Bengal tiger in heat. Psychologists can't figure me. God – given defenses always work for whatever the situation. He never sends his children into battle without the proper weapons. "In God We Trust"
Bill Ayers, another highly esteemed educator of our youth, recently shared his sage advice of revolution with some OWS members.
Ayers belonged to the Weather Underground in the 60s. An undercover federal agent in that group previously testified under oath that, at the time, group members figured one or two dozen million Americans would refuse to renounce capitalism, and would have to be shipped off to camps for liquidation. No joke. This is who they are. It is always who they are.
And this commie POS and his elite cohorts are the ones that have been indoctrinating students for decades, and the brainwashed youth and aged hippies are now mostly the ones raising chaos in the streets for OWS.
Isn't it great that our president has such friends and allies while we are in times of crisis?
Black Tuesday was October 29, 1929. FDR took office March 4, 1933. Those two events are 40 months apart. When FDR took office unemployment was 25%. In 1940 unemployment was 15%.
No it is below the office of the POTUS, which Obama soils regularly.
If we produce more with fewer people then we produce more, you speak as if this is a bad thing, it is not.
How does that change the fact that people lost their jobs? it doesnt.
The internet has nothing to do with shipping packages that's why I differentiated what Fed Ex and UPS do. The post office is becoming less needed because people are receiving less mail due to email, online banking, credit card, and other billing statements, etc. This is a fact. How are those post office jobs replaced?
"Although technology creates efficiency, safety… it's effects on our workforce, … is something we are going to be dealing with from here on in."
What effects? What are you talking about?
Technology is thinning the work force. Jobs like factory work, admin jobs, etc are all being phased out due to new technology.
If you like I can find the studies but there is a direct correlation between automation and new technology and a decrease in jobs. This has been going on throughout history and the evolution of technology. Every labor saving device leads to less human labor needed to complete a task.
"Technology is thinning the work force."
This is ridiculous. Just look at the invention of the transistor and then later the IC and subsequently the computer, and then the Internet and then the WWW has created literally entire industries and wealth and prosperity – and jobs for untold numbers of people.
If someone wants to succeed then the first thing they must do it quit complaining that no one us buying their buggy-whips.
You must be a buggy-whip manufacturer.
"less human labor needed to complete a task"
Again, so what? That means more tasks get done, not fewer people work.
Any other questions?
Yeah I know, down tickers, If you don't like the way history turned out you can always rewrite it I suppose, your only fooling yourself, though.
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