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Old 04-10-2009, 09:02 AM
 
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I suppose any of what's purported by experts could be argued, but we've been through quite a few recessions now. I wonder if the frequency we've had them the past 40 yrs could be chalked up to ham handedness from the Fed, or are there too many moving events to even make an assessment? Ron Pauls theory points to avoidance of paying the piper.

Once the link loads click onto the paragraphs and audio will come on.

http://www.nytimes.com/interactive/2...l?ref=business
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Old 04-10-2009, 09:48 AM
 
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I didn't read the NYT article but if you think the "recessions of the last 40 years" have been bad, you might want to check some economic history of the United States. Panics and depressions tended to occur pretty regularly about every fifteen years. These were not the slight and short downturns we've had since the late 1930s, these were pretty ruinous affairs.

As part of the New Deal we enacted "Glass-Steagall" (separated merchant and investment banking), put in the FDIC (to protect bank deposits), and the Securities and Exhange Commission (put big restrictions on margin trading and regulated the sale of securities). While a lot of the New Deal was designed to be, and was, short term, these were long term and served their purposes very well.

Unfortunately the era of "no regulation is good regulation" ushered in the "greed is good" era and the repeal of Glass-Steagall (mid-wifed by Phil Graham, signed by President Bill Clinton) opened to floodgates to the "wild west" mentalitiy that has prevailed for the last 10 years or so and LED DIRECTLY TO THE SITUATION WE'RE IN TODAY.

No downturn of the period 1942-2008 can compare in severity to what we experienced between 1782/83(?) and 1932.

golfgod
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Old 04-10-2009, 09:15 PM
 
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I recall breezing through a book mentioning that era but never got into it too deeply. I think the exotic products were the real death blow, even more so than deregulation + insufficient capital reserve settups. That and smarmy math, and I SURE hate smarmy math.
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Old 04-10-2009, 09:43 PM
 
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I repped you but had to put a couple of comments in:

Quote:
I think the exotic products were the real death blow, even more so than deregulation
Can't have "exotic" products if there's regulation.


Quote:
insufficient capital reserve settups
Regulation and oversight can tell the banks to get their reserves up.

Quote:
That and smarmy math
AKA, greed. When the regulators are willfully blind the smarminess will prevail. "Bad money will always drive out the good".

golfgod
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Old 04-11-2009, 11:12 AM
 
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Exotic products as in... FDA allowing a drug to be introduced into medicine or our food supply without ever testing it out and without the companies being held liable for the damage they do because laws on the books want to limit liability. Supreme court justices installed mean to tell people when they lose intangible or intrinsic value, here is your class action suit check for ten cents after the fact. Perversions of justice only erode america until there is no more america.
I'm very worried about where we are and where we're going as a nation. I wish Obama could wave a magic wand and restore accountability standards for all parties concerned. We're paying for their mistakes with our very lives every day.
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Old 04-11-2009, 11:18 AM
 
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List of recessions in the United States - Wikipedia, the free encyclopedia
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Old 04-11-2009, 04:23 PM
 
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I think it's healthy for everyones sanity to remember the seasonal aspects of our lives. We cannot avoid winter, but we can be prepared as individuals. I'm afraid our civilization hasn't really encouraged individuals to be prepared so much as it's fostered dependence-- the people are in service to preserving civilization at the expense of individuals. This philosophical criticism... how do we change our structures and methods present tense to reflect a healthier balance?

Obama is trying to fix a moving car. He's putting out global fires with promisary notes. The terms and conditions of participating in civilization have gotten untenable. I'm very worried about the greater good being trampled underfoot.
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Old 04-11-2009, 04:26 PM
 
27,890 posts, read 35,048,653 times
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Quote:
Originally Posted by golfgod View Post
I didn't read the NYT article but if you think the "recessions of the last 40 years" have been bad, you might want to check some economic history of the United States. Panics and depressions tended to occur pretty regularly about every fifteen years. These were not the slight and short downturns we've had since the late 1930s, these were pretty ruinous affairs.

As part of the New Deal we enacted "Glass-Steagall" (separated merchant and investment banking), put in the FDIC (to protect bank deposits), and the Securities and Exhange Commission (put big restrictions on margin trading and regulated the sale of securities). While a lot of the New Deal was designed to be, and was, short term, these were long term and served their purposes very well.

Unfortunately the era of "no regulation is good regulation" ushered in the "greed is good" era and the repeal of Glass-Steagall (mid-wifed by Phil Graham, signed by President Bill Clinton) opened to floodgates to the "wild west" mentalitiy that has prevailed for the last 10 years or so and LED DIRECTLY TO THE SITUATION WE'RE IN TODAY.

No downturn of the period 1942-2008 can compare in severity to what we experienced between 1782/83(?) and 1932.

golfgod
Where do GSE's fall into "cowboy capitalism"?
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Old 04-11-2009, 04:34 PM
 
27,890 posts, read 35,048,653 times
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Quote:
Originally Posted by harborlady View Post
I suppose any of what's purported by experts could be argued, but we've been through quite a few recessions now. I wonder if the frequency we've had them the past 40 yrs could be chalked up to ham handedness from the Fed, or are there too many moving events to even make an assessment? Ron Pauls theory points to avoidance of paying the piper.

Once the link loads click onto the paragraphs and audio will come on.

How the Government Dealt With Past Recessions - Interactive Graphic - NYTimes.com
Keynesian economics only works if there is a goal at the end and it results in greater growth. That's why spending on wars works. Spending on infrastructure only works if somehow you create someone or something else having more demand on your products.

It would be like investing in a massive mfg line with all new high tech machines to mass produce a touch tone phone. Not really anything there to sell since the market is saturated, however you're setup real well if you destroy your competitor and then come out with a new design, say voice activated or something where the market isn't saturated.

For example we spent all kinds of money on the cold war over decades. It didn't really work very well until the Soviet Union fell and we had a product the rest of the world wanted mainly the technological advances of $1.5 trillion dollar defense budget where the idea of the administration was:

"the best ideas win"- William J. Casey

Not sure if I conveyed my message well, but the gist is spending money doesn't help unless you create a new niche in the market.

Last edited by BigJon3475; 04-11-2009 at 05:36 PM..
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Old 04-11-2009, 05:07 PM
 
Location: Washington DC
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I don't think you can make the case that a Keynesian approach shortens recessions, but it does seem to me that it can soften the impact. IMO infrastructure spending is very beneficial in recessions as long as the infrastructure will be used once built. In that sense, infrastructure spending is investment. Fixing roads, bridges, transmission systems, etc. are investment that we will have to make anyway. Borrowing the money and doing them now, softens the depth of the recession.
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