patrick.net

Look at where America was in 1930, 1 year into the depression. Things were a lot different than they were in 1933. We haven't even hit the inevitable second downtrend in the W yet. Right now the media has convinced the general public that we're in a recovery, and nothing is wrong. Never mind about the 17% actual unemployment and the 1 in 4 mortgages that are underwater...

In 1930, people thought the recession was over and the stock market was going back up.

By 1932 unemployment had reached 23.6%, and it peaked in early 1933 at 25%, a drought persisted in the agricultural heartland, businesses and families defaulted on record numbers of loans, and more than 5,000 banks had failed. Hundreds of thousands of Americans found themselves homeless and they began congregating in the numerous Hoovervilles that had begun to appear across the country.

Wait until 2012 and see what happens. Thing will either be much better if the media can be believed, or much worse.

Wasn't the Panic of 1837 worse?

We do not hear much about it because it ended so quickly. Unlike FDR, Andrew Jackson did not make up some new deal. This is one proof that laissez-faire is the best depression policy.

The real culprit of the Great Depression is FDR himself.

Peter P says

We do not hear much about it because it ended so quickly.

Do you consider a 5-6 year depression quick? I don't. Because the US economy didn't recover until the mid 1840's. Laissez-faire is the best policy for creating depressions--if that's what you meant.

A 5-6 year depression is better than a 12 year depression + high taxes for many years to come.

Peter P says

A 5-6 year depression is better than a 12 year depression + high taxes for many years to come.

Agreed. Not sure what your point is though.

I am not sure what the OP was trying to point out by negerian kid immolates himself up there and the war happened centuries ago.

I am concerned that we may be facing another "depression" and that we will look back at these times right now thinking how stupid we were for paying our bills instead of just stashing cash.

I am sure there have been societies since 500BC, (or 5 billion BC for that matter), that thought they had endured and were more evolved and above a financial conundrum.

Is it an insult? No. Because many probably didn't starve during the Great Depression, remember they were dressed in suits at the "bread" line. I don't remember any pics of folks starving to death in the streets, not to say that some didn't.

Armageddon is just a word.

I think the main concern is are we just dogmatic capitalists willing to denounce socialism, communism, etc. Do we burn Karl Marx's books, throw away what could be learned from Mein Keimf, all in the name of what? "Democracy", "Freedom", "Liberty". Things we're told "terrorists" hate us for????

It is not so bad right now, fundamentally, but our political messages have not changed in the foreseeable past. If you read Herbert Hoovers campaign speech, it probably would have said we need to invest in a green future and create green jobs.

We are being "led", and we're waking up to it. This is just a case of history repeating itself. Now, let's not fight amongst ourselves and...

AGREE WITH ME UNCONDITIONALLY THAT WE NEED TO REBUILD OUR SLUMS!!! BOOM! SUPER TRANSIT TO GO SKIING! WOO HOO! DERIVITAVE MARKET FOR SPECULATIVE BUILDING DEVELOPMENT HINGING ON WHETHER OR NOT HISTORICAL STRUCTURE AGREES TO DEMOLITION!!!! BUY BUY BUY SELL SELL SELL. ECONOMY BOOMING!!!

You all suck.

Just joking in all caps there, of course, but back to the "social" issue.

The rest of the world may be looking at us with a "you wanted it you got it" attitude.

I don't think they judge individuals in this country or anywhere.

But who would argue that the sentiment of America is Best and the rest of the world can go get F***ed has diminished significantly in the last 20-25 years? Even in America. Especially in America.

America is a child compared to many cultures, I think, but all cultures spawn new generations just as open to their environment as any other.

Are we insulting those who have endured real armageddons?

I think we should fear insulting any of our ancestors who have done anything to help a future generation, be it travelling across the Atlantic, or lying about the Holocaust (big funny, just joking).

"Wasn’t the Panic of 1837 worse?

We do not hear much about it because it ended so quickly. Unlike FDR, Andrew Jackson did not make up some new deal. This is one proof that laissez-faire is the best depression policy."

Ok, if were going to recycle RNC talking points, at least lets get our facts straight. The Great Depression started in 1929. FDR became president in 1933. So if doing nothing would have ended the depression, then it would have ended earlier since the president at the time, Herbet Hoover, did just that.. nothing!

I would liken our shituation to the Panic of 1907...

Seriously, it is the PTB holding back waiting and seeing.

What Do you want????

That is the next boom.... Sort of Kind of...

So if doing nothing would have ended the depression, then it would have ended earlier since the president at the time, Herbet Hoover, did just that.. nothing!

Maybe not earlier than 1933 but not much later either. FDR bailed out the depression and gave it a new life. We are still feeling the effects: high tax, social security, etc.

The difference between all the other economic crises that have occurred is that it's happening to us. Now. It's very real to us.

I would dare to say that people are inconvenienced beyond belief. I've seen people go from million dollar homes (huge custom homes with all the bells & whistles) to renting tiny little houses with other family members. It's really scary out there for many people. I don't know if anyone has starved to death, but I'd dare say drug & alcohol abuse, homelessness, depression, etc has all gone thru the roof. We're a very materialistic society, coming off a huge high. Hitting a low.

Sure it's been worse in history. Hopefully we'll recover, move on & learn something from it.

Peter P says

Maybe not earlier than 1933 but not much later either. FDR bailed out the depression and gave it a new life. We are still feeling the effects: high tax, social security, etc.

Oh, I see. Doing nothing didn't work for the first 4 years, but it would have miraculously cured the depression shortly thereafter. Does that really make sense in your world?

The major difference now is money is very virtual, it's not as hard tangible as it was in the 30's and 20's. So it's not like there are communities of isolated people that have to load their life into a Model T Ford then make a 300 mile trip at 20 mph to the City to get relief.

"We are still feeling the effects: high tax, social security, etc."

Oh yes, Social Security is so bad. The horrors. Getting a check each month wnen your retired is such a horrible concept.

elliemae says

The difference between all the other economic crises that have occurred is that it’s happening to us. Now. It’s very real to us.
I would dare to say that people are inconvenienced beyond belief. I’ve seen people go from million dollar homes (huge custom homes with all the bells & whistles) to renting tiny little houses with other family members. It’s really scary out there for many people. I don’t know if anyone has starved to death, but I’d dare say drug & alcohol abuse, homelessness, depression, etc has all gone thru the roof. We’re a very materialistic society, coming off a huge high. Hitting a low.
Sure it’s been worse in history. Hopefully we’ll recover, move on & learn something from it.

The thing is renting a tiny little house with other family members is still a quality of life which is better than 95% of the human beings on the rest of this earth. Many of those poor 3rd world bastards don't even have the money to buy the drugs and alcohol to numb their condition. We are a very materialistic society, and maybe this 1-2 decade economic downturn will get us off that road. There's not enough resources on this earth to be materialistic indefinitely.

As for my reference to the nigerian terrorist., it was meant to show that the collective american psyche is very fragile. We go ape shit over the littlest thing nowadays. Far worse things have happened to americans and humans historically(we are after all humans first, then american) that make what we're going through seem like a vacation.

Oh yes, Social Security is so bad. The horrors. Getting a check each month wnen your retired is such a horrible concept.

Being forced to participate in a ponzi scheme is very bad. At least Madoff's clients joined willingly.

The thing is renting a tiny little house with other family members is still a quality of life which is better than 95% of the human beings on the rest of this earth.

It is good to be thankful.

However, as a market participant, focusing on the other 95% of people does no good. For all intents and purposes they do not exist.

There’s not enough resources on this earth to be materialistic indefinitely.

This world is abundant. Only aspiration is scarce.

There is enough resources on the earth to be materialistic indefinitely as long as we remain capitalistic.

Peter P says

Being forced to participate in a ponzi scheme is very bad

SS is not a ponzi and only will be if the back-end of the Greenspan Commission's design from the mid-80s is not honored. Tax rates were lowered on high incomes in the 80s in exchange for pre-funding boomer future retirement SS checks. The general fund owes over $2T to FICA payers now, and though anti-gummint types assert that this is nonsensical, it is not because the population that benefited most from the 1980s tax cuts (and their heirs) is largely disjunct with FICA payers.

And I disagree with the "forced to participate" ideology you spout here, too. History shows the masses do not plan for the future. How can we, when we haven't experienced it? Given the opportunity, the temptation is great for the middle class and below to seek better uses for the their retirement money, either consumption or yield-chasing that has a risk profile more of investment rather than savings.

Also, without forced savings, landlords have increasing pricing power in the market. By taking retirement savings out of paychecks, tenants have this money taken off the table and it simply cannot be extorted from them by the rentier class.

But if the rentier class succeeds in torpedoing the Greenspan deal and walk off with $2T+, I'm going to laugh my ass off and give them a golf clap for a very well-done swindle.

Well... here's the way I see.

As Troy pointed out, the masses do not plan for the future. A portion of population is taking advantage of others, spending everything without 2nd thought, just living in their dream out of their means, without knowing what they are doing. When this portion of population is growing (like we've seen in recent years) it become a norm, and the society has to support them sustain.

Wall st fatcats got bailout. Banks got TARP. ARM loan takers got their loan adjusted. And 23 years old single mom of 5 kids never employeed for life is getting government money for dining outs and cocaine. They're all awarded by what they have done wrong, while working people living in their means are crying out for the help "where's my bail out?" Sorry dude, you ain't gonna get shit, you pay taxes for them.

See. This is seriously wasteful, parasitic society. We're just not realizing that since this system has been there for decades, and it worked so far.

Can we change the system? Are you kidding, you socialist?

I think this is recession. No depression.
If there has to be a depression, it will be two or three decades away from now, when all the privacy madness and money for public measures that's used for rewarding stupid people dried out.

seaside says

If there has to be a depression, it will be two or three decades away from now, when all the money and public measures that’s used for rewarding stupid people dried out.

The problem as I see it is that the actual policy makers that run the economy -- government and private -- want to have their cake and eat it too. They want lower prices for the things they buy and low wages for all other jobs that aren't theirs. Just reading the paid-for-poppycock columnists expounding on the theoretical virtues of free trade sickens me since I know if this Free Trade extended to their own jobs they'd be the first to argue against it (should their publishers allow such independent thought from them).

The bottom line is that 10% of the country controls the 70% of the wealth. Of course the system is under stress with this disparity.

Peter P is right that capitalism will save the day. Unfortunately, there is very little capitalism going on here, mostly just naked rentierism. Our communist friends in China are the true capitalists now, and they're kicking our non-collectivized asses.

It is hard to have capitalism with an unregulated democracy. The Founding Fathers had it right when they drafted the Constitution. However, subsequent expansions of suffrage weakened the market considerably.

The Progressive Movement was the single worst thing ever happened to this country.

The bottom line is that 10% of the country controls the 70% of the wealth. Of course the system is under stress with this disparity.

I do not see a problem with that, so long as we are not deprived of the aspiration to join that 10%.

Did you just say that giving women the right to vote was a bad thing? Are you on drugs?

"Peter P is right that capitalism will save the day. "

Isn't capitalism what got us into this mess?

Nah, the FIRE sector is not capitalism. They are actually parasitical rentiers preying off of it.

Capitalism is simply private profit from the production of wealth, wealth being physical goods & services that satisfy human needs and wants. What killed us in the recent bubble wasn't the overproduction of housing goods, it was overpaying for the land itself.

Modern neo-classical economists intentionally blurred the line between capital and land, defining land as a form of capital.

Read http://homepage.ntlworld.com/janusg/coe/cofe00.htm for more on that.

States could run VC funds and that would be a hybrid state-sponsored capitalist system, like what (former) MITI in Japan did, the 共产党 does, Clinton's Supercar, Bush's Freedom Car, and much of the recent stimulus-funded state investment in R&D (obviously state-sponsored enterprises have . . . variable success rates).

I haven't read any Rand but I've heard that the fat-cat bankers are part of the bad guys in her book(s).

Singapore is another example of state-sponsored capitalism, rather successful at that.

As I said in another replies, most doctors never been in the same condition that the patient they're treating. Policy maker is the same, that why they can spend all the time doing something delutional for what they called "middle class" or "poor public". Hey, I will not be surprised when they think themselve as a middle class and their definition of middle class is someone who can easily afford 1M house and a sailing boat couple of prostitutes in it.

I don't have problem with 10% having 70% of wealth. Life is unfair, so take it as it is.
Only resent I got is that 10% doing something stupid for 70%. Oh well... this sounds even more unfair.

HousingWatcher says

“Peter P is right that capitalism will save the day. ”
Isn’t capitalism what got us into this mess?

Every economic theory including capitalism is in fact very sound concept except one big flaw in the assumption it based on. "people act logical".

seaside says

I don’t have problem with 10% having 70% of wealth. Life is unfair, so take it as it is.

I have no problem with wealth inequality as long as it doesn't further if not intensify itself.

The recent spate of investors buying up all the SFHs coming out of BK is a prime example of wealth enslaving the lower classes. This is rentierism, something the Liberal Democrats of the UK and TR's Progressive Party were campaigning rather successfully against prior to WW I.

(then the war came, kicking over the traces, establishing a Communist global conspiracy against the status quo, and the capitalists circled the wagons and abandoned the reform movement)

Did you just say that giving women the right to vote was a bad thing?

Not necessarily. But it is probably better to give one vote to each tax-paying nuclear family.

A family with a woman head-of-household is totally acceptable on my book.

Every economic theory including capitalism is in fact very sound concept except one big flaw in the assumption it based on. “people act logical”.

Capitalism does not even require that people are logical. It only requires that they are greedy.

Trying to "fix" capitalism with social engineering requires such impossible assumptions.

Peter P says

Trying to “fix” capitalism with social engineering requires such impossible assumptions.

Nah, just gotta redirect the greed away from rentierism -- getting something for nothing -- and profiting from the relative financial and economic weaknesses of your fellow citizens.

I strongly believe in the profit motive, the problem is said profit motive can be just as destructive as state socialism. Just look at the past decade for a prime example, million of people reaching for the ring, aspiring to get into that 10%, not through work or much wealth creation but just through leveraged investments in land.

Believe it or not, leveraged investments involve a lot of work, although the industry really needs more common sense than mathematical models in risk-management departments.

It is also important NOT to distinguish between "earned" and "unearned" income, because Free Market will eventually wash out the unproductive crowd.

@burritos

I agree that in a materialistic sense it is a insult to those who were starving in the 30s to see what people are complaining about now. But for someone who was making good money with a house/car/boat to loose it all and move into a in-law's shitty basement and have to bag groceries for $8/h he probably is just as happy with his life as the guy begging for food in the 1930s.

It is as traumatic for an ex-billionaire to have his private jet repossessed as it is for a common wage-earner to lose his car.

Human minds deal with relatives. A civilized person will not compare his life with the bare necessities because he is not a caveman.

Those starving people in the 1930's are irrelevant to our discussion.

fredMG says

@burritos
I agree that in a materialistic sense it is a insult to those who were starving in the 30s to see what people are complaining about now. But for someone who was making good money with a house/car/boat to loose it all and move into a in-law’s shitty basement and have to bag groceries for $8/h he probably is just as happy with his life as the guy begging for food in the 1930s.

Happiness is a state of mind.

http://www.ted.com/talks/lang/eng/dan_gilbert_asks_why_are_we_happy.html

Take that same $8/h and cut off his limbs and kill his children. Then ask him if he'd be happy if time could be reversed back to that same basement.