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Get Ready for a Lost Decade: Bad times don't produce good policy
The Wall Street Journal ^ | December 24, 2008 | Holman W. Jenkins Jr.

Posted on 12/24/2008 3:35:33 PM PST by 2ndDivisionVet

How many times have you heard that we've learned the lessons of the Great Depression and won't repeat the same mistakes?

That statement is a bit of a false promise, since there was only one Great Depression, and many, many steps were taken and not taken, with no chance to rerun the experiment over and over to figure out what worked, or would have worked, and what didn't.

Letting hundreds of banks collapse, destroying savings and confidence, is one mistake we won't make again. But many want to insist, without evidence, that more government spending would have ended the depression. That's the direction the Obama administration is taking. Others say government did not do enough to restore business confidence, or did too much to damage it, piling on taxes, regulation and labor unions. This at least is firmer ground. Plenty of evidence from history shows that actions hostile to business tend to be related to an absence of prosperity.

But more important than these talismanic assurances about what we've learned from the Great Depression is the mistake in assuming that, even if we had a coherent view of what should be done, coherent polices would therefore be implemented.

This has little relation to how policy is made in a democracy.

Policy is always bad to a degree, but long periods of prosperity tend to be self-reinforcing since powerful interests are born with the means and motive to preserve the status quo. That status quo may really be a contributor to prosperity, such as regulatory restraint and moderate tax rates. That status quo may in some respects be ill-advised, such as excessive subsidy to housing debt.

(Excerpt) Read more at careerjournal.com ...


TOPICS: Business/Economy; Editorial; Government; Politics/Elections
KEYWORDS: agenda; bailout; bho2008; bush; congress; economy; obama; recession
Good, as far as it goes.
1 posted on 12/24/2008 3:35:34 PM PST by 2ndDivisionVet
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To: 2ndDivisionVet

And whats sad is the good times haven’t produced any lately either.


2 posted on 12/24/2008 3:38:38 PM PST by MES401067 (Lenin called them "useful idiots" I for one have no use for them.)
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To: 2ndDivisionVet

—bflr-


3 posted on 12/24/2008 3:39:34 PM PST by rellimpank (--don't believe anything the MSM tells you about firearms or explosives--NRA Benefactor)
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To: 2ndDivisionVet
Who owns the Wall Street Journal these days?

Obviously, the Great Depression ended the day Hirohito and Togo created a DESPERATE need for 15,000,000 low paid workers. I don't think we can caount on that again. The next time such a need is created it will be due to the elimination of many of these workers in a vaporization.

I believe most of the bazillions of dollars wiped out in the last coupld of months had little to do with real wealth. I believe it was the bursting of an artificial bubble. Since it was artificial, the bursting was inevitable. The question was: when?

I believe recreating this artificial wealth, or any part of it using some "float" mechanism is insane. We have to ask if our ponzi scheme leaders are any different than one Mr. Madoff?

4 posted on 12/24/2008 3:54:55 PM PST by stevem
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To: MES401067
That's a good point. The housing bubble brought on by cheap money, borrowing against equity from over-priced houses to finance $5000.00 TV’s, the US auto industry, Madoff, deficit spending, borrowing money from China for stimulus checks to buy products that are now mostly made in China, there's just no end to what we did wrong.
5 posted on 12/24/2008 4:02:41 PM PST by TwelveOfTwenty (How much money has your 401K lost since the Democrats took Congress?)
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To: 2ndDivisionVet

As then as now; we have a lot of crooks.


6 posted on 12/24/2008 4:15:27 PM PST by freekitty (Give me back my conservative vote.)
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To: freekitty
Many were crooks, but others just blundered into this mess. The Big 3 in the late 70’s and 80’s comes to mind.
7 posted on 12/24/2008 4:17:32 PM PST by TwelveOfTwenty (How much money has your 401K lost since the Democrats took Congress?)
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To: 2ndDivisionVet

And why wouldn’t we repeat the same mistakes that led up to the Great Depression?

We are poised to descend into Great Depression II, which will make the original look like a rainy Sunday afternoon at the park. We are ENTERING this one with our military forces already engaged, with a much more extended credit obligation and future unfunded commitments to be filled, and artificially handicapping ourselves through limits on where and how much energy may be extracted and used in this country. Add to that a widespread belief that everything is “Bush’s fault”, and there is a built-in scapegoat that finally gets history off Herbert Hoover’s back.

America is SO screwed.


8 posted on 12/24/2008 4:21:20 PM PST by alloysteel (Balkanization - perhaps one of the few remaining ways to preserve American ideals.)
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To: 2ndDivisionVet; Liz; AT7Saluki; writer33; MurryMom
...there was only one Great Depression...

"I don't know what was so great about the Depression, but that's the name they give it." Nancy Pelosi, September 29, 2008.

9 posted on 12/24/2008 4:21:24 PM PST by Libloather (December is Liberal, Leftist, Marxist Awareness Month.)
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To: alloysteel

What nobody seems to take into account is the huge number of semi-transients that are unproductive due to drug abuse earlier in their lives. Couple that with a defunded welfare population and we are looking at a very unstable society. “Unrest” is inevitable, especially when the “disturbances” get wall-to-wall video on your wide screen.


10 posted on 12/24/2008 4:42:28 PM PST by Misterioso ( Socialism is an ideology. Capitalism is a natural phenomenon.)
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To: Libloather
I don't know what was so great about the Depression

it apparently was great for Democrats, they've either been in charge or diddling Republicans along ever since.

11 posted on 12/24/2008 6:25:57 PM PST by gusopol3
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To: 2ndDivisionVet
Like the politicians who are in the process of reducing our gross national product to ZERO, this article has nothing of value to offer.

Here's the lesson of Depression I - We should have stuck to the Constitution's admonition about Congress having the power to coin money, and should have never allowed the creation of the "Federal Reserve". Oh, and someone should have executed FDR for high crimes against the Constitution.

Here's the first lesson of Depression II - Term limits are not optional, lawyers must be prevented from ever holding office for any term, and the Democrat party needs to be treated like the Nazis were during mop up operations after Berlin fell.

The unfortunate thing is that with the incoming coup, in 4 years there isn't going to be any country to instruct with these lessons.


12 posted on 12/24/2008 6:44:14 PM PST by TonyStark
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To: TonyStark

The Federal reserve was created in 1913, under the Woodrow Wilson administration, not in the thities when FDR began his reign and the depression roared. http://en.wikipedia.org/wiki/Federal_Reserve


13 posted on 12/24/2008 6:50:19 PM PST by 2ndDivisionVet (Barack Obama: In Error and arrogant -- he's errogant!)
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To: 2ndDivisionVet
The Federal reserve was created in 1913, under the Woodrow Wilson administration, not in the thities when FDR began his reign and the depression roared. http://en.wikipedia.org/wiki/Federal_Reserve

I know that. My point was that the lesson was made manifestly clear that the creation of the Fed in 1913 was a terrible mistake which allowed the extension of a moderate recession into Depression I. FDR's destruction of the Constitution is likewise still proving the seriousness of his posthumous crimes with every annual Federal budget.

BTW, Merry Christmas!

14 posted on 12/24/2008 7:12:06 PM PST by TonyStark
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To: stevem
I believe most of the bazillions of dollars wiped out in the last coupld of months had little to do with real wealth. I believe it was the bursting of an artificial bubble. Since it was artificial, the bursting was inevitable. The question was: when?

I think you would greatly enjoy this article by Karl Denninger. Mr. Denninger also posts the chart below, that provides some of the answers you seek.


15 posted on 12/24/2008 7:18:16 PM PST by RochesterFan
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To: RochesterFan
While that chart is indeed disturbing, the kind of debt held by consumers in the 20's and 30's tended to be much shorter-term. Our debt servicing burden is not as great now because repayments are spread out over a longer term.

That said, it's still much too high and should return to 1990 levels.

-ccm

16 posted on 12/24/2008 7:46:37 PM PST by ccmay (Too much Law; not enough Order.)
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To: Misterioso
into account is the huge number of semi-transients that

What percentage of the population falls into this category?

How does one spot the "semi-transients"?

17 posted on 12/24/2008 7:56:59 PM PST by highpockets
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To: TwelveOfTwenty

And that’s just the tip.


18 posted on 12/24/2008 8:41:12 PM PST by MES401067 (Lenin called them "useful idiots" I for one have no use for them.)
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To: highpockets

Meth freaks and crack heads that alternate between being on the street and finding temporary housing find ways to survive (panhandling and burglary) when the welfare money runs out. Your hometown might be different. I live in Los Angeles and they are not hard to spot. As far as the percentage goes, I can’t hazard a guess but it is significant enough to worry about.


19 posted on 12/25/2008 1:23:22 AM PST by Misterioso ( Socialism is an ideology. Capitalism is a natural phenomenon.)
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To: 2ndDivisionVet

Good one


20 posted on 12/25/2008 1:26:49 AM PST by dennisw (Only when the tide goes out, can you see who’s been swimming naked -- Warren Buffet)
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To: MES401067

“whats sad is the good times haven’t produced any lately either.”
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

During the good times our “leaders” came up with the insane policies that led to the present disaster which they now blame solely on the victim, George W. Bush.


21 posted on 12/25/2008 5:39:40 AM PST by RipSawyer (Great Grandpa was a Confederate soldier from the cradle of secession.)
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To: stevem

We have to ask if our ponzi scheme leaders are any different than one Mr. Madoff?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

They really are different! They waste far more money and they lie more!


22 posted on 12/25/2008 5:42:46 AM PST by RipSawyer (Great Grandpa was a Confederate soldier from the cradle of secession.)
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To: RochesterFan

“George Bush, our Congress and Alan Greenspan, however, refused to accept their responsibility in 2000 and 2001 for the economic policies of this nation and its banking regulators that led to the final blow-off top in the Internet Bubble.”
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

The article is very interesting but the line above sort of spoils it. George Bush didn’t take office until late January of 2001 yet they list his name first when counting those who screwed up in 2000 and 2001. Now they are blaming him retroactively!


23 posted on 12/25/2008 6:40:24 AM PST by RipSawyer (Great Grandpa was a Confederate soldier from the cradle of secession.)
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To: 2ndDivisionVet

save for later


24 posted on 12/30/2008 8:30:14 AM PST by sickoflibs (GWB : "Give me a 700B blank check to save the UAW until Obama takes office")
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To: 2ndDivisionVet
The world's going to be destroyed in 2012 anyway. Why worry?

Apocalypse 2012

25 posted on 12/30/2008 8:33:12 AM PST by CholeraJoe (It was a great party until the SWAT team tossed in the flash-bangs and tear gas.)
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