Then...... as Now

If Ben Bernanke is really a student of the Great Depression as we are led to believe perhaps

he should ask for his money back for the education he has received. For if he were a student of the policies that both Herbert Hoover, and Franklin Roosevelt took after the crash of 1929, and understood the causes of that crash, he would see that the recommendations of both Presidents were the cause of the depth, and the severity of the Depression. He would also understand that to mimic those actions, as well as trying to persuade the public that more of those actions would be a disastrous course to take for the American economy. From the outset of the depression Hoover abandoned all principles of laissez-faire principles and after 3 1/2 years of action the economy became worse. Sound familiar ? Of course when Roosevelt took office, he then proceeded to undertake even more intervention in the economy, and to the dismay of the President, and the country things became worse.

              

                                                                   An imbalance of the economic magnitude that we are facing today, just as the country faced then can only happen with the expansion overall of credit, and an increase in the money supply, as I mentioned before this sends signals to those wishing to invest, of easy money, or rather a supply of money in the economy that really is not there. When the Central bank prints money and lowers interest rates the signal to the economy that gets sent is that there are large sums of money in saving, which means that consumption has been delayed, that is; we will not buy a new car right now, or I have decided to wait for the purchase of a home, or if you are a manufacturer, the delay of the purchase of large pieces of equipment. The Fed in essence is taking away the need for savings, an important part of the economy, to promote consumption, this in turn allows the political class to proclaim the success of their statist policies. Politicians love a little inflation for another reason, it allows for them to pay back debt with money of lesser value, however for you the consumer, what you end up with is money that has a lower value, thus you get the short end of the stick so to speak, you will face rising prices.

                                                                                                          The Hoover and the Roosevelt administrations upheld failures in the Marketplace, much as Presidents Bush and Obama have done, both in banking and the automobile industry, by not allowing the weak to be weeded out of the economy for poor performance, tax dollars were sucked out of the economy to subsidize failure, which then prevented those who were solvent, from purchasing banks, or GM for that matter at rock bottom prices. That is how a capital society works. It is not like this country has not had calamities in the economy before 2008, or 1929 for that matter, the difference in both scenarios are that prior to those times, the United States Government stayed out of the way. Companies did go out of business, and people did lose employment, wages fell as the supply of workers increased, however this is the remedy that was ( or is ) needed to gain a balance in the overall economy again, when there is intervention in that balance unfortunately the correction takes longer to remedy itself. It as an absolute. It is axiomatic. Further more Ben, should know that. if he does not he got robbed of a good education, however if he does why would he pursue a policy, that has a history of failure ? The reason again is power. The power to control the money supply, along with the power that Congress has with the current tax system is designed to make the Citizens of this country nothing more than servants. That has been, and will continue to be the plan, as long as we the people tolerate it.

                                                                                                          Hoover believed in correcting our countries " marginal " faults, in our underdeveloped health and education systems, he was troubled by the " waste" in the industrial process, then as now some of the most efficient and productive in the world. President Hoover was in favour of inheritance taxes, and regulation of the stock market. President Roosevelt asked for and received by law, more control over the market and increased the taxes overall in the economy taking even more capital out of the economy. Our current President favors much the same course of action, and prefers to allow Washington to " invest" rather than the private economy. Mr. Bernanke if he were honest with himself, and our President would be quick to point out the similarities, wouldn't you think ? Instead he encourages more of the same failures........... damn curious if you ask me. If I hit my head against a brick wall 10 times and all I get is bloodied and bruised, what would make me think the 11th time would be any better ? To pursue a policy of more quantitative easing, or if you will printing more money by selling bonds to be paid by the taxpayers at a later date makes absolutely no sense. The problem is there is a lack of capital for the work that needs to be performed in the economy, want to know what else is the problem ? There is no acceptable return on that investment in the minds of those that have the capital. No one is in business to just hand over money, and no one wants to put it into the hands of a President, and 535 Congressman who have concluded that there sole purpose in life is to interfere with everyone else's life, all over the globe.

                                                                                                                    The fact is, for prosperity to reign in this nation we have to understand that the unhampered market, where individuals are free to meet the needs of there customers, based on the demands of customers is the only prescription for getting our country out of, and keeping our country out of economic malaise. Ayn Rand once wrote that there should be a separation of Economy and State, just as there is a separation of Church and State. And for the very same reasons. That is a principle well worth exploring in the upcoming election cycle. If we wish to pass on a legacy to the younger generation, it should be the legacy of freedom. Not just of thought, not just of worship, but also to include the legacy of prosperity, and that legacy can only exist in the absence of the interventionist tendencies of government. If we can eliminate that, we will have passed on something far more valuable than an estate, or a business, or a large trust fund. We will have given the next generation the gift of freedom, a gift far more valuable than any amount of money on this planet.