The Forgotten Depression of 1920-21

[Anarchist420]

Why was it forgotten? Because big government wasn't quick enough to step in to make it memorable.

The Warren G Harding admin slashed taxes and spending, and raised interest rates.

Why did the great depression last so long? Because FDR went off the gold standard and continued Hoover's wage controls.

Why didn't the economy recover during the Nixon years? Because nixon went off the gold standard and installed price controls. That shit never works.

When has it been proven to work? That's what I want to know.

 

[totalnoob]

Here is a lecture on the issue I highly recommend to everyone - http://www.youtube.com/watch?v=czcUmnsprQI

The first part deals with history, and the remainder (starting at 30:00) is about how we got into the current mess.

 

[PeshakJang]

Why did the great depression last so long? Because FDR went off the gold standard and continued Hoover's wage controls.

From what I recall, the departure from the gold standard is widely believed to be the catalyst for *ending* the great depression.

Ben Bernanke and Harold James, in a paper called "The Gold Standard, Deflation, and Financial Crisis in the Great Depression: An International Comparison" published in 1991 (NBER working paper version here), noted that 13 other countries besides the U.K. had decided to abandon their currencies' gold parity in 1931. Bernanke and James' data for the average growth rate of industrial production for these countries (plotted in the top panel above) was positive in every year from 1932 on. Countries that stayed on gold, by contrast, experienced an average output decline of 15% in 1932. The U.S. abandoned gold in 1933, after which its dramatic recovery immediately began. The same happened after Italy dropped the gold standard in 1934, and for Belgium when it went off in 1935. On the other hand, the three countries that stuck with gold through 1936 (France, Netherlands, and Poland) saw a 6% drop in industrial production in 1935, while the rest of the world was experiencing solid growth.




A gold standard only works when everybody believes in the overall fiscal and monetary responsibility of the major world governments and the relative price of gold is fairly stable. And yet a lack of such faith was the precise reason the world returned to gold in the late 1920's and the reason many argue for a return to gold today. Saying you're on a gold standard does not suddenly make you credible. But it does set you up for some ferocious problems if people still doubt whether you've set your house in order.

 

[ShawnD1]

Here is a lecture on the issue I highly recommend to everyone - http://www.youtube.com/watch?v=czcUmnsprQI

The first part deals with history, and the remainder (starting at 30:00) is about how we got into the current mess.

Thanks for sharing. I always appreciate it when people share educational videos.


The video is still downloading, but my pre-video hunch is that the recession wasn't magically ended by anarchist420's "do nothing" approach.
Always seems like a stoner mentality. Don't worry brah, the economy will just recover. It doesn't matter that 1/3 of the country is unemployed and not spending money, and this leads to further layoffs because people who still have jobs no longer have clients, brah.

 

[Nemesis 1]

From what I recall, the departure from the gold standard is widely believed to be the catalyst for *ending* the great depression.

Widely believed by whom? Anyone with an ounce of brains knows what brought the great depression to an end . ANYONE.

 

[Nemesis 1]

In todays world Gold has great value. Easy for anyone to grasp its value in tech.

But 5,000 years ago its becomes really hard to understand WHY gold was of value . TO soft and heavey for weapons , The color isn't really that popular among the masses. So why was gold so valued by the ancients. The ans. is out there ya just have to except the facts.

The OPs link is rather good. But I am sure the simple truth of what Harding did or didn't do is hiden from the highly educated here . So I will break it down to Simple house hold economics .

If I family overspends they become endanger of losing their home and everthing that goes along with it. Harding choose a path that is fiscally sound . If a homeowner over extends himself and expenses are greater than income that household will fail . Unless ya do 1 of 2 differant things.

I1. Cut back on outgoing expensese tighten (Live within your means. THe correct think to do .

2. Increase income to where balance is maintained . The wrong thing to do because this feeds expansion and the end result will always be the same . You will end up with outdoing always beating incoming growth. 2 is what they teach in higher education . Which is why the Sick are running the world . They feed peoples greed for more more more . It amazes myself how many sheepo believe what these retards say. Rather than using the common sense harding used. Its easy to see in these times. As so many lost the good life so to speak.

The people who teach that 2 is correct are 1 of 2 things Retards or they have an agenda. . I go with they have an agenda. Common sense is dieing along side and instep with morals . Strange that . NOT!

 

[PeshakJang]

Widely believed by whom? Anyone with an ounce of brains knows what brought the great depression to an end . ANYONE.

Do share, then.

 

[PeshakJang]

In todays world Gold has great value. Easy for anyone to grasp its value in tech.

But 5,000 years ago its becomes really hard to understand WHY gold was of value . TO soft and heavey for weapons , The color isn't really that popular among the masses. So why was gold so valued by the ancients. The ans. is out there ya just have to except the facts.

Rarity... appearance... religious uses... malleability...

 

[totalnoob]

From what I recall, the departure from the gold standard is widely believed to be the catalyst for *ending* the great depression.

Considering GDP is measured in dollars..and government spending counts for one major part of it, when you lift the only tool that restrains government so they can print a bunch of money and spend like crazy, of course the stats are going to get a bump. This says nothing about the fundamentals of the real underlying economy. It just means the government was able to borrow and print a shitload of cash, and all the new "money" was included in subsequent GDP figures, bringing a technical end to the downward trend.

 

[Moonbeam]

Rarity... appearance... religious uses... malleability...

Incorruptibility, like the true self.

 

[Nemesis 1]

Rarity... appearance... religious uses... malleability...

Rarity . But still a pretty useless metal for the times.

Appearance Have a survey .

Religious This is were I was heading. BUT why? malleability . Really doesn't make sense for the times. Look at the structures they built that still stand . Something we will not accomplish.

Malleability true but I did say softness and heavey. Doesn't add up. THe ans lies in ancient text from all over the world.

I wasn't done with the video so I added to my second reply.

 

[Anarchist420]

Considering GDP is measured in dollars..and government spending counts for one major part of it, when you lift the only tool that restrains government so they can print a bunch of money and spend like crazy, of course the stats are going to get a bump. This says nothing about the fundamentals of the real underlying economy. It just means the government was able to borrow and print a shitload of cash, and all the new "money" was included in subsequent GDP figures, bringing a technical end to the downward trend.

I don't think your user name describes you at all.

It's just like when socialists advocate socialized medicine by using the illogical that it's cheaper. The prices and measurements are determined by the government. There's no objective way to compare the cost of socialized medicine and free market medicine and even the WHO has said that.

 

[ShawnD1]

It just means the government was able to borrow and print a shitload of cash, and all the new "money" was included in subsequent GDP figures, bringing a technical end to the downward trend.

People declared the great depression as being over when they finally had jobs. Going from 20% unemployment to 5% unemployment is when the depression is over. Wikipedia has a nice little graph to show the numbers for what the great depression looked like

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

Now here is what the current US depression looks like:

That looks familiar doesn't it. Peak is at roughly 17% unemployment and underemployment. We'll cheer that the depression is over when the unemployment rate drops.

illogic that [socialized medicine is] cheaper

How is it illogical? We had several threads in ATOT as well as P&N where several Americans are posting their yearly insurance premiums as being over $5000 per year. That's more than I've paid in income tax in the past 2 years (full time student) and I don't pay anything for health care but I still had the same level of coverage because I live under UHC. I get it for free, you pay $5000, and you're saying mine is somehow not cheaper?

 

[sandorski]

I don't think your user name describes you at all.

It's just like when socialists advocate socialized medicine by using the illogical that it's cheaper. The prices and measurements are determined by the government. There's no objective way to compare the cost of socialized medicine and free market medicine and even the WHO has said that.

What?

 

[William Gaatjes]

Incorruptibility, like the true self.

Sort of true.

It is not very chemically reactive under the right circumstances.
As long as there are not certain acids around. It will remain. It is almost inert, i wanted to write.
As such, it is not bad for your health. Because it is pliable and almost inert it is a desired material to use on or in the body. At least, that is what they thought perhaps...

 

[Nemesis 1]

From what I recall, the departure from the gold standard is widely believed to be the catalyst for *ending* the great depression.

What else happened in that exact same time frame? Think man Think!

 

[totalnoob]

What else happened in that exact same time frame? Think man Think!

My memory is hazy.. Didn't it involve something like sucking a few million men into paying jobs and shipping them overseas to blow shit up (thus dramatically reducing the official unemployment rate)? I forget.

 

[William Gaatjes]

What else happened in that exact same time frame? Think man Think!

Do you people forget what opportunities war brings ?
How much money can be made ?
How much people can be put to work ?
Just think of all the companies where there was no profit made in the beginning just to support the country. Later on, the profit's would be earned though...

 

[ShawnD1]

What else happened in that exact same time frame? Think man Think!

Massive huge socialism is what happened.

Here is a graph of the US military budget.

People had full time employment doing what basically amounts to digging holes then immediately filling said hole. Build a tank, it blows up. Build bullets, shoot them. Build a boat, it sinks. Ya know, it's almost like getting people to build things fixes the economy when unemployment is high. Maybe the government should focus on getting people back to work building things. Instead of building a bunch of military shit that will be destroyed in 1 month, let's try building shit like bullet trains or widen some highways. As I said in another thread, retro-fitting stuff would work great right now.

 

[hal2kilo]

Do you people forget what opportunities war brings ?
How much money can be made ?
How much people can be put to work ?
Just think of all the companies where there was no profit made in the beginning just to support the country. Later on, the profit's would be earned though...

How come the endless WOT isn't working out so well for the economy? I mean we collected all those taxes and sold war bonds to pay for it right?

 

[totalnoob]

How come the endless WOT isn't working out so well for the economy? I mean we collected all those taxes and sold war bonds to pay for it right?

Iraq and Afghanistan are pushovers compared to Germany and Japan. We need to open a war on a few more fronts before our economy is stimulated.

 

[LegendKiller]

Considering GDP is measured in dollars..and government spending counts for one major part of it, when you lift the only tool that restrains government so they can print a bunch of money and spend like crazy, of course the stats are going to get a bump. This says nothing about the fundamentals of the real underlying economy. It just means the government was able to borrow and print a shitload of cash, and all the new "money" was included in subsequent GDP figures, bringing a technical end to the downward trend.

GDP excludes inflation. Whoops.

 

[LegendKiller]

In todays world Gold has great value. Easy for anyone to grasp its value in tech.

But 5,000 years ago its becomes really hard to understand WHY gold was of value . TO soft and heavey for weapons , The color isn't really that popular among the masses. So why was gold so valued by the ancients. The ans. is out there ya just have to except the facts.

The OPs link is rather good. But I am sure the simple truth of what Harding did or didn't do is hiden from the highly educated here . So I will break it down to Simple house hold economics .

If I family overspends they become endanger of losing their home and everthing that goes along with it. Harding choose a path that is fiscally sound . If a homeowner over extends himself and expenses are greater than income that household will fail . Unless ya do 1 of 2 differant things.

I1. Cut back on outgoing expensese tighten (Live within your means. THe correct think to do .

2. Increase income to where balance is maintained . The wrong thing to do because this feeds expansion and the end result will always be the same . You will end up with outdoing always beating incoming growth. 2 is what they teach in higher education . Which is why the Sick are running the world . They feed peoples greed for more more more . It amazes myself how many sheepo believe what these retards say. Rather than using the common sense harding used. Its easy to see in these times. As so many lost the good life so to speak.

The people who teach that 2 is correct are 1 of 2 things Retards or they have an agenda. . I go with they have an agenda. Common sense is dieing along side and instep with morals . Strange that . NOT!

What. The. Fuck. Is. This?

 

[William Gaatjes]

How come the endless WOT isn't working out so well for the economy? I mean we collected all those taxes and sold war bonds to pay for it right?

^_^

Do not get me wrong, i am not an advocate of war. Truly not, i am quite the opposite , although i understand it's purpose as last resort.

If memory serves me right :
But WW1 made a booming economy. After WW1 the bubble collapsed.
The wall street speculation had it's part to play as well. Shenandoah corporation and blue ridge corporation might have something to with manipulating shares.
When WW2 began, the manufacturing craze fueled the economy and the great depression was suddenly gone.

I am going to watch the documentary now... I have not seen it yet.

 

[LegendKiller]

Why was it forgotten? Because big government wasn't quick enough to step in to make it memorable.

The Warren G Harding admin slashed taxes and spending, and raised interest rates.

Why did the great depression last so long? Because FDR went off the gold standard and continued Hoover's wage controls.

Why didn't the economy recover during the Nixon years? Because nixon went off the gold standard and installed price controls. That shit never works.

When has it been proven to work? That's what I want to know.

There's only *one* country that exited the GD early because of gold. France. That's because it had the largest share of the world's gold. The only other major country to not be affected was China and that because it was relatively isolated and not on gold (silver/copper).

Every other country that went off gold suffered lesser effects of the GD. The *only* reason why this country was still in the GD prior to the beginning of major combat operations in Europe was the initiation of fiscal tightening as well as the "do nothing" approach to the Fed in 29-32 pre-FDR.

The gold system is a failure for the exact reason why you like it, it is passive whereas human minds are not. Counterbalancing active minds with passive currency only unbalances the situation.