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If you were FDR, what would you have done?


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2008 Mar 12, 6:22am   18,651 views  269 comments

by Peter P   ➕follow (2)   💰tip   ignore  

What would be your economic policies?

What would be your foreign policies?

What would you have done differently?

Hindsight is 20/20, but a healthy discussion is always fruitful.

Peter

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1   DinOR   2008 Mar 12, 6:47am  

If I were FDR?

I would admit defeat on Dec 8th 1941 and cut a deal so I could move my stash of GOLD to Tokyo where I would be welcomed as a hero! (I would also have negotiated for a summer palace in Berlin) and done simul-casts with Tokyo Rose.

The American people? Aw fuck 'em. I gots mine.

2   Peter P   2008 Mar 12, 6:52am  

How about giving employers tax credit on income tax paid by their employees?

This way, employers are incentivized to keep workers employed.

Other targeted tax credits/incentives can also be exploited.

3   DinOR   2008 Mar 12, 7:09am  

Peter P,

I like it. Give it a sliding scale matrix (so there's no whining from employers w/ smaller head counts) and you're a GO!

Now you're talking!

4   StuckInBA   2008 Mar 12, 7:25am  

Are we already at the situation where we need to remember FDR ? Are we already in a depression ?

The things look dire - if you are a teacher in CA, a mortgage broker, a construction worker, in retail, a bank employee or involved with REIC in general. But that's not the entire economy. Healthcare, technology, entertainment and any export related industry is doing OK.

I would heavily concentrate on our manufacturing and export industries. The devaluation of USD should be used to whatever positives it can generate. I don't think we need any more Govt agency the way FDR created.

I completely agree with DinOR dais in last thread. This is going to be one painful process, but let's remember that it's not the end of the world. No one was born with the guarantee that they will live in a forever prospering world. There is no law that economic downturns should only be minor. Instead of trying to postpone the inevitable and making it even more damaging, let's "face reality" (pun intended) and learn from the mistakes.

I think the bankers of this generation have learned their lesson. Till the next generation kids come along with their financial innovations, we won't be seeing stupid lending.

5   Peter P   2008 Mar 12, 7:26am  

I think the bankers of this generation have learned their lesson. Till the next generation kids come along with their financial innovations, we won’t be seeing stupid lending.

I thought the speculators learned their lesson in 2000...

6   Paul189   2008 Mar 12, 8:08am  

I saw a headline this morning that the USA housing market is the worst its been in 100 years. My question after hearing this was "how bad was the housing market in 1908?" Didn't most people at the turn of the last century pay cash or at least have a large down payment? I mean really, I bet 1908 didn't have such a bad housing market. The US had a large amount of legal immigration and we were not yet involved in The Great War." The industrial revolution was humming, no?

7   Peter P   2008 Mar 12, 8:12am  

I saw a headline this morning that the USA housing market is the worst its been in 100 years.

Did it mean worst in 100 years since record-keeping started 50 years ago?" ;)

8   StuckInBA   2008 Mar 12, 8:22am  

Paul,

I do not remember all the details, but Galbraith's "Short History Of Financial Euphoria" mentions many property bubbles even from 19th century. All were fueled by borrowed money.

I need to get that book out and type some quotations. It would be wonderful to revise our knowledge of bubbles.

9   Peter P   2008 Mar 12, 8:24am  

Try also Devil Take the Hindmost and of course Memoirs of Extraordinary Popular Delusions and the Madness of Crowds.

10   Peter P   2008 Mar 12, 8:26am  

Speaking of bubbles...

My wife wants to buy some tulips. Do you guys know of a florist in the South Bay?

11   DinOR   2008 Mar 12, 8:51am  

http://en.wikipedia.org/wiki/Panic_of_1907

Hetty Green and all that. "The stock market fell nearly 50% from it's peak in 1906."

12   Malcolm   2008 Mar 12, 9:16am  

Domestic policy: Just like today, I would let the banksters eat crow, but I would have supported government insuring deposits. I would not have fought the movement towards gold as a hedge since that is an infringment on someone's right to preserve their wealth. I also would have funded large public works projects since that is the basis for a successful free market economy. That's one with very good infrastructure openly available to the society.

Foreign policy: Trade policie and treaties only when there is a clear benefit to the American consumer and worker. I would have tried to stay neutral but Pearl Harbor would have happened anyway, so I'd have done all of that the same. I would have executed many more Nazis, and probably would have tried Hirohito as well, although that would have been a mistake.

If I were Kennedy, I would have invaded Cuba and confronted the Russians, therefore it is probably a good thing I am ineligible to run for President of the USA.

If I were Bush, Clinton, or Bush I would have invaded Iran, and N Korea, so again, it's probably just as well that I can't run.

13   Malcolm   2008 Mar 12, 9:18am  

Peter P Says:
March 12th, 2008 at 3:12 pm
"I saw a headline this morning that the USA housing market is the worst its been in 100 years.

Did it mean worst in 100 years since record-keeping started 50 years ago?” "

100 years ago, these bankers would have been lynched by pissed off depositors and investors.

14   Malcolm   2008 Mar 12, 9:20am  

Peter P Says:
March 12th, 2008 at 2:26 pm
"I think the bankers of this generation have learned their lesson. Till the next generation kids come along with their financial innovations, we won’t be seeing stupid lending.

I thought the speculators learned their lesson in 2000…"

The only thing they've learned is that if enough of them screw up to the point of being a threat to national security, then they will be bailed out, and they will still have jobs. They haven't learned shit, and things are going to implode despite any attempts to save the situation.

15   Peter P   2008 Mar 12, 9:22am  

I like Malcolm. ;)

If I were Kennedy, I would have invaded Cuba and confronted the Russians, therefore it is probably a good thing I am ineligible to run for President of the USA.

That is not unreasonable. But Ronald confronted the Russians without bloodshed.

16   Malcolm   2008 Mar 12, 9:24am  

First post, I meant trade policies, but trade policy works also. :)

17   Peter P   2008 Mar 12, 9:24am  

If I were Nixon, I would have cut tax drastically to combat stagflation. I would have legalized gold ownership right away.

18   Malcolm   2008 Mar 12, 9:26am  

Thanks man. I have to try to be honest even when looking back at what I would have done with the benefit of history. I would have treated the U2 downing as the first shot.

19   Malcolm   2008 Mar 12, 9:27am  

Reagan was brilliant, but he didn't have anything near the missile crisis to deal with. To me, if someone points a loaded gun at you, you have to believe they intend on shooting.

20   Malcolm   2008 Mar 12, 9:29am  

Of course I am referring to the Cuban U2 incident, and not the Powers incident over Russia.
That one was just one of those incidents that both sides now laugh about. Pretty funny in a way. "Uh, we were doing weather observations over Russia" ;)

21   Malcolm   2008 Mar 12, 9:33am  

If I were Lincoln I wouldn't have fought the succession of the southern states. This might have been a bad decision for the union and black people, but then again I probably wouldn't have taken a bullet to the head at the theater either.

22   Malcolm   2008 Mar 12, 9:34am  

secession, sorry :(

23   Peter P   2008 Mar 12, 9:47am  

According to some theory, slavery in that form would have ended with or without the Civil War. But hindsight is always 20/20.

24   DennisN   2008 Mar 12, 10:00am  

Actually I've been reading a lot of history books over the last dozen years, and hindsight is not generally 20/20. Each historian puts his "spin" on the events. It's actually hard to determine what exactly happened.

The South screwed up by firing on Ft. Sumter. If they had just let the Federals sit there, the Federals would have gotten bored in time and just left. The South handed Lincoln a causa bella on a silver platter.

25   kewp   2008 Mar 12, 10:27am  

Hire Tony Stark to build custom Iron Man suit and fight the Nazi's personally.

26   FuzzyMath   2008 Mar 12, 10:39am  

OB,

no need to throw around the term "Gay Area" using a device that was designed and invented there. Without your gay area friends, you wouldn't have such a nice little blog to spend half your day bitching to the world on.

With that said, yes, we are fucked.
For some reason people think that America in the 90's is somehow the universal constant "norm". While human history is filled with war, hunger, strife AND most of the world even now is in the same condition, it would appear that America in the 90's is the EXCEPTION. We have been nutting it here for the past 50's years people. That doesn't mean it's going to always stay that way. In fact, historically speaking, it's impressive it's lasted even this long.

27   StuckInBA   2008 Mar 12, 10:54am  

TOB :

Let's take one thing at a time.

1. I don't believe bankers will be as stupid as they have been. Do you think otherwise ?

2. I did not say "lets concentrate on entertainment ...". I pointed out that these industries are doing OK. Just to put in perspective that - although banks have realized large losses, technology for example hasn't realized losses. Many companies have announced only slower growth. I specifically said, I would heavily concentrate on our manufacturing and export industries. Which means, I would try to start/increase activities/investments in these areas. We do export a few things - it's not "none". And although it would take a long time to (re)build these industries, I think that's the way to go in future.

I don't think I indicated that this was going to be easy and quick. Read again. I said This is going to be one painful process, but let’s remember that it’s not the end of the world.

3. About the current war, people dying and lives being ruined. I was not commenting out what's happening. I was providing my answer to the questions raised in the post - what should be done to revive the economy. If you have a different opinion or disagree with me, that's fine, I have no problem with that. But you can't blame me for not discussing the Iraq war, Bush's incompetence, Cheney's oil connections, Clinton's legacy and how much Spitzer paid for his blow jobs or even how Mozillo is evil. I agree that all these are problems, but that's not what the topic of the post was.

28   Peter P   2008 Mar 12, 11:09am  

TOB, even as a conservative, I fail to comprehend your hostility towards gay people.

To me, divorce is the enemy against traditional family values.

29   Peter P   2008 Mar 12, 11:15am  

makes me fucking sick that they think their fucking greed and self-serving bullshit is some kind of natural law.

There are right.

This is why I am a misanthropist.

30   Peter P   2008 Mar 12, 11:15am  

how am i being hostile towards gay people?

You are not? Sorry then.

31   StuckInBA   2008 Mar 12, 11:22am  

TOB :

I will try to dig up information - hard numbers - about our manufacturing industries. It's completely wrong to say that we don't have any.

Just yesterday, CR had an article about US Trade Deficit. The deficit ex-oil is very manageable. I am not trying to ignore the oil problem, I am just pointing that exports are doing fine. Here is what CR said

The ex-petroleum deficit is falling fairly rapidly, almost entirely because of weak imports (export growth is still strong).

That's just one man's opinion, but it's an educated opinion based on his/her research.

32   kewp   2008 Mar 12, 11:33am  

StuckInBA,

I've heard that if we were to adopt European mileage standards for our cars that we could rely entirely on domestic oil production (and balance our trade as well).

33   Malcolm   2008 Mar 12, 11:35am  

If someone has an observation about gay people they should be free to state it without the pc labels. I'm not for hostility, but I hate it when a topic is all of a sudden off limits because of sensitivity. Everyone here has some birth trait, ideology, or race issues that are routinely criticized here, so I don't think gay people should somehow be sheltered from it. As a group they have their faults and positive atributes like any other group does.

34   Malcolm   2008 Mar 12, 11:37am  

The Original Bankster Says:
March 12th, 2008 at 6:29 pm
StuckinBA,
"My entire generation trained for those jobs. no one did anything even remotely connected to manufacturing, unless they were planning on moving "

I got my bachelor's degree in production management because I noticed there were hardly any other people doing it. Not sure how useful that is in S Cali.

35   northernvirginiarenter   2008 Mar 12, 11:42am  

A key point would seem to be that our export markets will largely pop with us, our exports vis a vis a low dollar will not be our savior. Unfortunately.

Though we can asssume the average Chinese investor does not have the information flow we enjoy, and though the Chinese don't mess around with corporate white collar crime (human organs are plentiful and cheap there for good reason), I cannot fathom how the disappearance of the US consumer will not eliminate their soaring paper markets.

An unstable China scares me.

36   northernvirginiarenter   2008 Mar 12, 11:49am  

Asian markets currently tanking on lack of confidence in any long term effect of FED efforts....

37   FuzzyMath   2008 Mar 12, 11:58am  

"If someone has an observation about gay people they should be free to state it without the pc labels."

Righto. Just don't call me gay because I live in a certain area :)

38   northernvirginiarenter   2008 Mar 12, 12:16pm  

Stay tuned today, this looks to be interesting.....

U.S. to Revamp Credit Rules, Drawing From Crisis Lessons
By Damian Paletta
Word Count: 1,608 | Companies Featured in This Article: Fannie Mae, Freddie Mac
WASHINGTON -- The nation's top economic policy makers plan to release today their broadest blueprint yet for avoiding a recurrence of the credit crunch now threatening the economy.

Their recommendations extend to nearly every niche in the credit markets -- from mortgage brokers to the Wall Street firms that package home loans into securities, to the credit-rating firms that assess the risk of those securities, to the regulators who police the system.

Amid the housing market's deepening slump, mounting defaults by cash-strapped homeowners and an upswing in foreclosures have made investors wary of mortgage-linked securities and have made those securities .

39   northernvirginiarenter   2008 Mar 12, 12:20pm  

As someone over at CR observed, its possible we are looking at a change in the MBS rating system. One to Six diamonds.

40   Malcolm   2008 Mar 12, 12:40pm  

FuzzyMath Says:
March 12th, 2008 at 6:58 pm
"“If someone has an observation about gay people they should be free to state it without the pc labels.”

Righto. Just don’t call me gay because I live in a certain area "

This site was started from the SF area. I hope that the contagion is only for people living in gay areas and can't spread by posting to a blog from a gay area.

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