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Old 10-04-2012, 16:13   #106
douggmc
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Quote:
Originally Posted by G19G20 View Post
Im afraid there was some misunderstanding if that's what you thought my post said. I thought I was pretty clear that all the gov't interventions in fiscal and monetary policy (ie New Deal, et al) made the problem of free spending in the early to mid 20s worse by not allowing bad decisions (aka malinvestment) to shake out of the system. WW2 did not end the Depression. The end of gov't intervention in the economy is what ended it.

Again, you can see clear parallels between that period and today's economy. The early to mid 20s would be parallel to the early to mid 2000's with loose monetary policy that led to speculative bubbles. 2008 would be akin to 1929. Now we have the same gov't and central bank intervention going on and it's making the problem worse by propping up the malinvestment instead of liquidating it and allowing the market to correct itself. The gov't and the Fed needs to get out of the way, not repeat the same bad policies that extended the GD.
OK ... I understand your timeline better now. I did misinterpret it a bit.

I think we are a bit on same page, but not quite. You attribute and draw a parallel between the 20s and early 2000s as loose monetary policy leading to speculation and a bubble. I would see the same parallel, but attribute it to not enough oversight and regulation (are we saying same thing/agreeing?). This let the engine spin out of control so to speak during the 20s/1980-2000s... an engine without a governor if you will. Hence my characterization of the 20s as laissez-faire ... and to a certain degree the late 80s through mid 2000s the same. Not enough APPROPRIATE oversight and regulation in the right areas.

I would agree that WW2 didn't end the depression too. I disagree with your characterization of what did. You say it was in spite of FDRs policies and government intervention ... and that only after they ended we recovered. I say it was because of it. It took awhile .. yes .. but just as the excessive laissez-faire conditions that create busts don't happen overnight, the implementation of corrective policies don't happen overnight either. It was the very policies of the FDR administration that REBUILT the middle class and lit a fire under the heart of what can be the really ONLY true driver of sustained and healthy growith ... A HEALTHY MIDDLE CLASS.

Last edited by douggmc; 10-04-2012 at 16:14..
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