A Voice From the Past-Gov't Intervention

[QUINNSCOMMENTARY]

What does history teach us, a great deal, most of which is ignored or dismissed out of hand.

For those of you who see the federal government as the answer to our problems as opposed to allowing the market to work out the fundamental problems in the current economy consider this letter to the editor of the WSJ.

Great Depression Holds Lessons, but What Are They?

Andrew Wilson is right: The New Deal did not end the Great Depression ("Five Myths About the Great Depression," op-ed, Nov. 4). No less an authority than FDR's Treasury secretary and close friend, Henry Morgenthau, conceded this fact to Congressional Democrats in May 1939:

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong . . . somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises . . . I say after eight years of this Administration we have just as much unemployment as when we started . . . And an enormous debt to boot!"

Indeed, FDR's market-suffocating policies are almost surely what put the "Great" in Great Depression. :-5

[gmc]

Some of the causes are also remarkably similar.

The Main Causes of the Great Depression

Arguably it was also made worse by the protectionism that followed.

[QUINNSCOMMENTARY]

gmc;1054072 wrote: Some of the causes are also remarkably similar.

The Main Causes of the Great Depression

Arguably it was also made worse by the protectionism that followed.


This part is certainly the same, except the credit buying over the last ten to fifteen years was not on necessities but on luxuries thus leading people to live a false standard. Add to that the use of homes as cash machines by taking out equity and you have the underpinnings for our problems.

"One obvious solution to the problem of the vast majority of the population not having enough money to satisfy all their needs was to let those who wanted goods buy products on credit. The concept of buying now and paying later caught on quickly. By the end of the 1920's 60% of cars and 80% of radios were bought on installment credit"

[gmc]

QUINNSCOMMENTARY;1054099 wrote: This part is certainly the same, except the credit buying over the last ten to fifteen years was not on necessities but on luxuries thus leading people to live a false standard. Add to that the use of homes as cash machines by taking out equity and you have the underpinnings for our problems.

"One obvious solution to the problem of the vast majority of the population not having enough money to satisfy all their needs was to let those who wanted goods buy products on credit. The concept of buying now and paying later caught on quickly. By the end of the 1920's 60% of cars and 80% of radios were bought on installment credit"


So's this part I think.

A major reason for this large and growing gap between the rich and the working-class people was the increased manufacturing output throughout this period. From 1923-1929 the average output per worker increased 32% in manufacturing8. During that same period of time average wages for manufacturing jobs increased only 8%9. Thus wages increased at a rate one fourth as fast as productivity increased. As production costs fell quickly, wages rose slowly, and prices remained constant, the bulk benefit of the increased productivity went into corporate profits. In fact, from 1923-1929 corporate profits rose 62% and dividends rose 65%10.

The federal government also contributed to the growing gap between the rich and middle-class. Calvin Coolidge's administration (and the conservative-controlled government) favored business, and as a result the wealthy who invested in these businesses. An example of legislation to this purpose is the Revenue Act of 1926, signed by President Coolidge on February 26, 1926, which reduced federal income and inheritance taxes dramatically11. Andrew Mellon, Coolidge's Secretary of the Treasury, was the main force behind these and other tax cuts throughout the 1920's. In effect, he was able to lower federal taxes such that a man with a million-dollar annual income had his federal taxes reduced from $600,000 to $200,00012.


Although I am not familiar enough with the states to actually argue the case fully.

[QUINNSCOMMENTARY]

gmc;1054426 wrote: So's this part I think.



Although I am not familiar enough with the states to actually argue the case fully.


Check this out as well. The End of Prosperity