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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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 Posted: Tue Nov 25, 2008 9:15 am Post subject: FDR prolonged Great Depression 7 years - UCLA economists |
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FDR's policies prolonged Depression by 7 years, UCLA economists calculate
By Meg Sullivan| 8/10/2004 12:23:12 PM
http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx
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Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.
After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.
"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies |
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| Cole and Ohanian calculate that NIRA and its aftermath account for 60 percent of the weak recovery. Without the policies, they contend that the Depression would have ended in 1936 instead of the year when they believe the slump actually ended: 1943. |
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| "This is exciting and valuable research," said Robert E. Lucas Jr., the 1995 Nobel Laureate in economics, and the John Dewey Distinguished Service Professor of Economics at the University of Chicago. "The prevention and cure of depressions is a central mission of macroeconomics, and if we can't understand what happened in the 1930s, how can we be sure it won't happen again?" |
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"The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened."
-UCLA-
LSMS368 |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Nov 25, 2008 9:22 am Post subject: |
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The Federal Reserve has done it again.
Bush/Obama are following the same failed socialist big government programs that Hoover/FDR used to create the first Great Depression (minus, thankfully, so far at least, the Smoot-Hawley tariff law).
Everyone is saying that this time the government will respond faster and do more. Economic research and theory both show us that this will make the second Great Depression even worse than the first. Of course, things could turn out a little better than the first GD if we can maintain free trade and avoid more wars.
Yata, I suggest you buy an old car to sleep in under that bridge. Get a nice warm sleeping bag and some extra blankets.
Or, just plan on working until you die and don't overcharge for your labor. You can keep teaching English in Korea with some kind of housing and food at some affordable level of pay. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Nov 25, 2008 9:53 am Post subject: |
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� WASHINGTON � The economy shrank more than expected in the third quarter and home prices fell to levels not seen since early 2004 as the government announced new plans to provide $800 billion to boost consumer spending and home buying.
Treasury Secretary Henry Paulson said key markets for consumer debt such as credit cards, auto and student loans essentially came to a halt in October, and that the new programs are aimed to get lending back to more normal levels.
Meanwhile, data released Tuesday provided further proof the country is almost certainly in the throes of a painful recession.
The Commerce Department's updated reading on the economy's performance showed gross domestic product shrank at a 0.5 percent annual rate in the July-September quarter, weaker than the 0.3 percent rate of decline first estimated a month ago, and the worst showing since the third quarter of 2001.
GDP measures the value of all goods and services produced within the U.S. and is considered the best barometer of the country's economic fitness.
Meanwhile, the Standard & Poor's/Case-Shiller national home price index released Tuesday tumbled a record 16.6 percent during the quarter from the same period a year ago. Prices are at levels not seen since the first quarter of 2004.
In an effort to increase the availability of home loans to borrowers, the Federal Reserve said it will purchase up to $100 billion in direct obligations from mortgage giants Fannie Mae and Freddie Mac as well as the Federal Home Loan Banks. The Fed also will purchase another $500 billion in mortgage-backed securities, pools of mortgages that are bundled together and sold to investors.
The $600 billion effort on mortgages came as the Fed also unveiled a new program to help unfreeze the market that backs consumer debt such as credit cards, auto and student loans |
We need to let prices and wages fall so that the economy can recover. We need to shake out decades of the Fed's socialist fiat money inflation. But the government is doing it again. They're trying to reinflate the bubble. This will just deepen and prolong the recession and change it, again, into a depression.
Another thing that's different this time is that a lot of the bailout money (hundreds of billions of dollars so far) is being channeled into the stock market to try to prevent its decline. This has been done secretly and indirectly, so far, mingled with other bailout funds, but if people realize what's happening, the public will run from the market and the crash will be worse. |
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mindmetoo
Joined: 02 Feb 2004
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