Skip to comments.Glenn Beck TV thread May 21st 2010
Posted on 05/21/2010 1:33:13 PM PDT by cripplecreek
(Excerpt) Read more at foxnews.com ...
I’m zeroing in on sucessfully photographing lightning.
Still clear in my mind to this day.
“New Deal or Raw Deal?: How FDR’s Economic Legacy Has Damaged America”
Burton W., Jr. Folsom (Author)
My folks HATED FDR. Viscerally. Absolutely despised him.
On Henry Morganthau:
His biggest success was the new Social Security program; he reversed the proposals to fund it from general revenue and insisted it be funded by new taxes on employees. Morgenthau insisted on excluding farm workers and domestic servants from Social Security because workers outside industry would not be paying their way. He is quoted in doubting the huge spending schemes in The New Deal that haven’t reduced unemployment and only added debt:
“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this Administration we have just as much unemployment as when we started. And an enormous debt to boot.”
...now for a photo of the ever-elusive ‘ball’ lightning...
That’s pretty impressive...
The Great Depression, and the economic catastrophe that it was, is perhaps properly scaled in reference to the decade that preceded it, the 1920s. By conventional macroeconomic measures, this was a decade of brisk economic growth in the United States. Perhaps the moniker the roaring twenties summarizes this period most succinctly. The disruptions and shocking nature of World War I had been survived and it was felt the United States was entering a new era. In January 1920, the Federal Reserve seasonally adjusted index of industrial production, a standard measure of aggregate economic activity, stood at 81 (193539 = 100). When the index peaked in July 1929 it was at 114, for a growth rate of 40.6 percent over this period. Similar rates of growth over the 192029 period equal to 47.3 percent and 42.4 percent are computed using annual real gross national product data from Balke and Gordon (1986) and Romer (1988), respectively. Further computations using the Balke and Gordon (1986) data indicate an average annual growth rate of real GNP over the 192029 period equal to 4.6 percent. In addition, the relative international economic strength of this country was clearly displayed by the fact that nearly one-half of world industrial output in 192529 was produced in the United States (Bernanke, 1983).
Consumer Durables Market
The decade of the 1920s also saw major innovations in the consumption behavior of households. The development of installment credit over this period led to substantial growth in the consumer durables market (Bernanke, 1983). Purchases of automobiles, refrigerators, radios and other such durable goods all experienced explosive growth during the 1920s as small borrowers, particularly households and unincorporated businesses, utilized their access to available credit (Persons, 1930; Bernanke, 1983; Soule, 1947).
Economic Growth in the 1920s
Economic growth during this period was mitigated only somewhat by three recessions. According to the National Bureau of Economic Research (NBER) business cycle chronology, two of these recessions were from May 1923 through July 1924 and October 1926 through November 1927. Both of these recessions were very mild and unremarkable. In contrast, the 1920s began with a recession lasting 18 months from the peak in January 1920 until the trough of July 1921. Original estimates of real GNP from the Commerce Department showed that real GNP fell 8 percent between 1919 and 1920 and another 7 percent between 1920 and 1921 (Romer, 1988). The behavior of prices contributed to the naming of this recession the Depression of 1921, as the implicit price deflator for GNP fell 16 percent and the Bureau of Labor Statistics wholesale price index fell 46 percent between 1920 and 1921. Although thought to be severe, Romer (1988) has argued that the so-called postwar depression was not as severe as once thought. While the deflation from war-time prices was substantial, revised estimates of real GNP show falls in output of only 1 percent between 1919 and 1920 and 2 percent between 1920 and 1921. Romer (1988) also argues that the behaviors of output and prices are inconsistent with the conventional explanation of the Depression of 1921 being primarily driven by a decline in aggregate demand. Rather, the deflation and the mild recession are better understood as resulting from a decline in aggregate demand together with a series of positive supply shocks, particularly in the production of agricultural goods, and significant decreases in the prices of imported primary commodities. Overall, the upshot is that the growth path of output was hardly impeded by the three minor downturns, so that the decade of the 1920s can properly be viewed economically as a very healthy period.
Fed Policies in the 1920s
Friedman and Schwartz (1963) label the 1920s the high tide of the Reserve System. As they explain, the Federal Reserve became increasingly confident in the tools of policy and in its knowledge of how to use them properly. The synchronous movements of economic activity and explicit policy actions by the Federal Reserve did not go unnoticed. Taking the next step and concluding there was cause and effect, the Federal Reserve in the 1920s began to use monetary policy as an implement to stabilize business cycle fluctuations. In retrospect, we can see that this was a major step toward the assumption by government of explicit continuous responsibility for economic stability. As the decade wore on, the System took and perhaps even more was given credit for the generally stable conditions that prevailed, and high hopes were placed in the potency of monetary policy as then administered (Friedman and Schwartz, 1963).
The giving/taking of credit to/by the Federal Reserve has particular value pertaining to the recession of 192021. Although suggesting the Federal Reserve probably tightened too much, too late, Friedman and Schwartz (1963) call this episode the first real trial of the new system of monetary control introduced by the Federal Reserve Act. It is clear from the history of the time that the Federal Reserve felt as though it had successfully passed this test. The data showed that the economy had quickly recovered and brisk growth followed the recession of 192021 for the remainder of the decade.
Questionable Lessons Learned by the Fed
Moreover, Eichengreen (1992) suggests that the episode of 192021 led the Federal Reserve System to believe that the economy could be successfully deflated or liquidated without paying a severe penalty in terms of reduced output. This conclusion, however, proved to be mistaken at the onset of the Depression. As argued by Eichengreen (1992), the Federal Reserve did not appreciate the extent to which the successful deflation could be attributed to the unique circumstances that prevailed during 192021. The European economies were still devastated after World War I, so the demand for United States exports remained strong many years after the War. Moreover, the gold standard was not in operation at the time. Therefore, European countries were not forced to match the deflation initiated in the United States by the Federal Reserve (explained below pertaining to the gold standard hypothesis).
The implication is that the Federal Reserve thought that deflation could be generated with little effect on real economic activity. Therefore, the Federal Reserve was not vigorous in fighting the Great Depression in its initial stages. It viewed the early years of the Depression as another opportunity to successfully liquidate the economy, especially after the perceived speculative excesses of the 1920s. However, the state of the economic world in 1929 was not a duplicate of 192021. By 1929, the European economies had recovered and the interwar gold standard was a vehicle for the international transmission of deflation. Deflation in 1929 would not operate as it did in 192021. The Federal Reserve failed to understand the economic implications of this change in the international standing of the United States economy. The result was that the Depression was permitted to spiral out of control and was made much worse than it otherwise would have been had the Federal Reserve not considered it to be a repeat of the 192021 recession.
The Beginnings of the Great Depression
In January 1928 the seeds of the Great Depression, whenever they were planted, began to germinate. For it is around this time that two of the most prominent explanations for the depth, length, and worldwide spread of the Depression first came to be manifest. Without any doubt, the economics profession would come to a firm consensus around the idea that the economic events of the Great Depression cannot be properly understood without a solid linkage to both the behavior of the supply of money together with Federal Reserve actions on the one hand and the flawed structure of the interwar gold standard on the other.
It is well documented that many public officials, such as President Herbert Hoover and members of the Federal Reserve System in the latter 1920s, were intent on ending what they perceived to be the speculative excesses that were driving the stock market boom. Moreover, as explained by Hamilton (1987), despite plentiful denials to the contrary, the Federal Reserve assumed the role of arbiter of security prices. Although there continues to be debate as to whether or not the stock market was overvalued at the time (White, 1990; DeLong and Schleifer, 1991), the main point is that the Federal Reserve believed there to be a speculative bubble in equity values. Hamilton (1987) describes how the Federal Reserve, intending to pop the bubble, embarked on a highly contractionary monetary policy in January 1928. Between December 1927 and July 1928 the Federal Reserve conducted $393 million of open market sales of securities so that only $80 million remained in the Open Market account. Buying rates on bankers acceptances1 were raised from 3 percent in January 1928 to 4.5 percent by July, reducing Federal Reserve holdings of such bills by $193 million, leaving a total of only $185 million of these bills on balance. Further, the discount rate was increased from 3.5 percent to 5 percent, the highest level since the recession of 192021. In short, in terms of the magnitudes consciously controlled by the Fed, it would be difficult to design a more contractionary policy than that initiated in January 1928 (Hamilton, 1987).
The pressure did not stop there, however. The death of Federal Reserve Bank President Benjamin Strong and the subsequent control of policy ascribed to Adolph Miller of the Federal Reserve Board insured that the fall in the stock market was going to be made a reality. Miller believed the speculative excesses of the stock market were hurting the economy, and the Federal Reserve continued attempting to put an end to this perceived harm (Cecchetti, 1998). The amount of Federal Reserve credit that was being extended to market participants in the form of broker loans became an issue in 1929. The Federal Reserve adamantly discouraged lending that was collateralized by equities. The intentions of the Board of Governors of the Federal Reserve were made clear in a letter dated February 2, 1929 sent to Federal Reserve banks. In part the letter read:
The board has no disposition to assume authority to interfere with the loan practices of member banks so long as they do not involve the Federal reserve banks. It has, however, a grave responsibility whenever there is evidence that member banks are maintaining speculative security loans with the aid of Federal reserve credit. When such is the case the Federal reserve bank becomes either a contributing or a sustaining factor in the current volume of speculative security credit. This is not in harmony with the intent of the Federal Reserve Act, nor is it conducive to the wholesome operation of the banking and credit system of the country. (Board of Governors of the Federal Reserve 1929: 9394, quoted from Cecchetti, 1998)
The deflationary pressure to stock prices had been applied. It was now a question of when the market would break. Although the effects were not immediate, the wait was not long.”
“Topic: US History Roaring 20s”
Henry Morganthau sounds like a man with a conscience.
“George Washington’s Sacred Fire [Paperback]
Peter A. Lillback
I saw ball lightning once as a kid with my dad. Came down, hit a farmhouse and lit it up like a fireball.
This Glenn Beck Founders series is really quite good.
I’m learing new “old” things ... or is it old “new” things?
Looks like Morganthau also stood up for Jews when FDR wouldn’t. He also supported summary execution of nazi war crimminals rather than holding trials.
Search on Washington the deist:
When I was a lineman some knuckleheaded backhoe operaor had his bucket fully upright and hit the lines we were pulling out and slapped them into to secondary power lines. It shot fire balls down the wires and started about eight poles to catch fire. I had just let go of the strand and was circling the pole when the fire ball flashed by me. My groundsman had just pulled the floating ground off the spool to start cinching up the wire when the fire ball hit the ground.
We ran from pole to pole putting fires out.
Bottom line, we are learning.
My stepsister’s father was killed when someone got a backhoe into some power lines.
Anyone got a source for the Goebbles learning from Wilson comment?
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