Back to Boom and Bust?

[techs]

It has pretty much been proven that in Capitalist systems the economy will go thru a Boom period followed by a Bust, about every 10 to 20 years.
You can see this in the Panic of 1873 and the Panic/Depression of 1893 and the Panic of 1907 and the Great Depression of 1929. The First World War seems to have put off a Panic/Depression by a few years.
http://en.wikipedia.org/wiki/Panic_of_1873
http://en.wikipedia.org/wiki/Panic_of_1893
http://en.wikipedia.org/wiki/Panic_of_1907

If you type Panic of in Wiki you will see whole list of them.

The Busts that occurred every 10-20 years are amazingly similiar to the Great Recession we are currently in. Housing prices collapsing, markets crashing, etc.
Of course since the New Deal we have had a system in place to moderate the Booms and Busts, and it did a pretty good job of keeping the current Recession from becoming a Depression.

When FDR came into office his economic advisors realized that the Boom and Bust was killing the creation and sustainment of a middle class. Most everyone would lose everything every 10-20 years. The very wealthiest would use the Bust to cheaply buy out businesses, and property.

So, the New Deal put into place safeguards to prevent the Busts. One thing that almost always happened to cause a Bust was overheated markets built on credit or speculation.

As each of the Busts occured they were becoming larger as more and more people depended on salaries for income.

Now the Republicans want to disamantle the protections against the Boom and Bust cycles.

Do you think this is a good idea?

 

[shiner]

Sorry...too busy trying to figure out how to get myself aboard the 100 Year Starship to think about this right now....

 

[Jaskalas]

Better to go Boom and Bust than to never have Boomed at all.

 

[Genx87]

It has pretty much been proven that in Capitalist systems the economy will go thru a Boom period followed by a Bust, about every 10 to 20 years.
You can see this in the Panic of 1873 and the Panic/Depression of 1893 and the Panic of 1907 and the Great Depression of 1929. The First World War seems to have put off a Panic/Depression by a few years.
http://en.wikipedia.org/wiki/Panic_of_1873
http://en.wikipedia.org/wiki/Panic_of_1893
http://en.wikipedia.org/wiki/Panic_of_1907

If you type Panic of in Wiki you will see whole list of them.

The Busts that occurred every 10-20 years are amazingly similiar to the Great Recession we are currently in. Housing prices collapsing, markets crashing, etc.
Of course since the New Deal we have had a system in place to moderate the Booms and Busts, and it did a pretty good job of keeping the current Recession from becoming a Depression.

When FDR came into office his economic advisors realized that the Boom and Bust was killing the creation and sustainment of a middle class. Most everyone would lose everything every 10-20 years. The very wealthiest would use the Bust to cheaply buy out businesses, and property.

So, the New Deal put into place safeguards to prevent the Busts. One thing that almost always happened to cause a Bust was overheated markets built on credit or speculation.

As each of the Busts occured they were becoming larger as more and more people depended on salaries for income.

Now the Republicans want to disamantle the protections against the Boom and Bust cycles.

Do you think this is a good idea?

And yet through all his tinkering we managed to have a recession within a depression in 1937. That is quite an accomplishment.
I am afraid the only true protection from a boom and bust cycle is to depress the economic activity to a point it can never grow out of control and bust. IE central planning. Which means we are in a permanent depression.

 

[Nebor]

Economies are cyclical because they are driven by human beings. People value things more than they are worth, and when everyone does it at the same time, times are good, and we develop bubbles. Those bubbles invariably burst, dramatically shifting the distribution of wealth.

Think of it as binging and purging. It's not a very healthy way to live your life... but it's probably better than just binging to no end.

 

[bamacre]

Biggest cause of boom and bust cycle...
http://www.federalreserve.gov/

http://en.wikipedia.org/wiki/Austrian_business_cycle_theory

 

[Nebor]

And yet through all his tinkering we managed to have a recession within a depression in 1937. That is quite an accomplishment.

Yup. The best we've ever managed is to string things along, avoiding the bust until it becomes so huge it threatens to destroy our entire way of life.

 

[bamacre]

Better to go Boom and Bust than to never have Boomed at all.

Yeah, we're fine right now. :\

 

[Jaskalas]

Yeah, we're fine right now. :\

My reply is in reference to the poverty and lack of economic Boom that communist nations suffer. Which I take as the OP's solution to his capitalist problem.

 

[werepossum]

And yet through all his tinkering we managed to have a recession within a depression in 1937. That is quite an accomplishment.
I am afraid the only true protection from a boom and bust cycle is to depress the economic activity to a point it can never grow out of control and bust. IE central planning. Which means we are in a permanent depression.

Quoted for truth.

 

[bamacre]

My reply is in reference to the poverty and lack of economic Boom that communist nations suffer. Which I take as the OP's solution to his capitalist problem.

Gotcha.

I should clarify, small booms and busts are natural for a capitalistic economy. It's the huge booms and following huge busts that are killing us.

 

[cubby1223]

Better to go Boom and Bust than to never have Boomed at all.

Better to go Boom and Bust than to go Socialist.

 

[Elias824]

Im am Herby ignoring all future threads by techs.

 

[SunnyD]

My reply is in reference to the poverty and lack of economic Boom that communist nations suffer. Which I take as the OP's solution to his capitalist problem.

Yet China's economy isn't booming at all?

It has less to do with social policy than it does with being in the right place at the right time. China right now is transitioning from a raw materials to commodity goods to technological goods economy. The thing is they're still straddling all three sectors and exporting the shit out of everything they can, bolstering their economy and stealing jobs away from the traditional places (like the US).

The US is so full of itself policing the world and getting fat on the last 100 years of economic superiority that we've lost our way. Right now China simply has a better economic policy and a favorable global economic climate, hence they go boom. In the meantime, us lazy-ass self-entitled Americans can't figure out why we go bust.

 

[bamacre]

Yet China's economy isn't booming at all?

China is much more economically free these days.

 

[Schadenfroh]

China is much more economically free these days.

Yep, Communism in China died with these reforms:
http://en.wikipedia.org/wiki/Socialist_market_economy

The socialist market economy or socialist market economy with Chinese characteristics is the official term used to refer to the economic system of the People's Republic of China after the reforms of Deng Xiaoping.

...

It consists of a mixture of socialist planning with a market economy.

...

Most of the economic growth in China is attributed to the private sector,[3] which grows at twice the official rate of increase and is continually expanding. However, the size of the private sector is notoriously difficult to pin down as the private sector is likely underestimated by state officials in calculation of GDP due to its propensity to ignore small entrepreneurs and private enterprises being not registered.

China has been communist in name only ever since.

 

[hal2kilo]

Yep, Communism in China died with these reforms:
http://en.wikipedia.org/wiki/Socialist_market_economy


China has been communist in name only ever since.

Yea, instead of ruling elite like we have here, they have there own ruling elite.

 

[werepossum]

Yep, Communism in China died with these reforms:
http://en.wikipedia.org/wiki/Socialist_market_economy


China has been communist in name only ever since.

Well, economically communist in name only. They are still firmly politically communist - but then, that's no different from any other ultra-authoritarian self-selecting elite political class.

 

[Craig234]

Better to go Boom and Bust than to never have Boomed at all.

Would you say the US economy 1933-1969 (or perhaps to 1981) fits your description of not having positive growth - or that it did, making your comment irrelevant?

 

[LegendKiller]

And yet through all his tinkering we managed to have a recession within a depression in 1937. That is quite an accomplishment.
I am afraid the only true protection from a boom and bust cycle is to depress the economic activity to a point it can never grow out of control and bust. IE central planning. Which means we are in a permanent depression.

All of his "tinkering" was for naught if only for one reason, removal of stimulus too early. Everybody knows this.

 

[LegendKiller]

Well, economically communist in name only. They are still firmly politically communist - but then, that's no different from any other ultra-authoritarian self-selecting elite political class.

Are you fucking kidding me? You and the above are completely idiotic.

China is history's world largest command economy.

 

[LegendKiller]

Biggest cause of boom and bust cycle...
http://www.federalreserve.gov/

http://en.wikipedia.org/wiki/Austrian_business_cycle_theory

So, we had boom/busts before the Fed and any boom bust after is the Fed's fault?

 

[Zebo]

According to Friedman and Schwartz bust is caused by contraction of money supply. Makes sense to me. I mean say you got 55 trillion in debt to service like USA people, business, municipalities, states and government has and credit tightens. First things responsible people do is deleverage and pay shit off. Sometimes that includes spending less, hiring less people and such wreaking economy.

 

[Zebo]

China is much more economically free these days.

Can't form union, company security and state if need be will bust heads. Can't open a biz w/o party saying okay and a few well placed bribes. They steal everything that moves. In fact you don't know what you're talking about.

 

[Jhhnn]

And yet through all his tinkering we managed to have a recession within a depression in 1937. That is quite an accomplishment.
I am afraid the only true protection from a boom and bust cycle is to depress the economic activity to a point it can never grow out of control and bust. IE central planning. Which means we are in a permanent depression.

Ideological lameness and denial of the worst sort.

first off, the downturn in 1937 occurred when the govt took off the economic training wheels too early.

Boom and bust serves only the financial elite, the insiders, serving as a money pump... buy on the way up, sell near the peak, short sell on the way down, capitalize on a deflationary spiral with high liquidity, when cash is king, a situation they create in the first place...

It's over extension of the money supply in the form of credit that creates the unrealistic boom, Zebo, which must be followed by bust. Busts can't happen w/o that precondition.