They say that those who fail to learn from history are bound to repeat it. I found a link to the lessons that were learned from the Great Depression. A little known fact is that while people in the United States use the name Great Depression, the rest of the world just call it a depression. We were the first to suffer and the last to recover. What was the difference between us and the rest of the world. Is Obama starting down the same path that gave us the Great Depression?

No, he is already many miles down the road they made the depression last an extra decade.

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the unemployment rate is this high claims the president

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In a rich man's house there is no place to spit but his face.
Diogenes Of Sinope

The current status of employment and if you would like to see more graphs you can look here.

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thus we can determine that like everyone else Obama and his economics team can't predict the future. It does make one stop and ponder the conservatives that dragged their feet when it came to the stimulus package. Heck its worse than we thought. So if we went the way conservatives wanted we just let the rollercoaster fly down the rails even though we knew the tracks were broken at the next turn. At least we've now got the brakes firmly on and we should be coming out of this mess soon

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In a rich man's house there is no place to spit but his face.
Diogenes Of Sinope

You didn't read or understand my link to the Great Depression. The point is the only way a Government can help a country recover from a Depression is to get out of the way and let the private sector do it's thing. The more the government tries to control things, the longer the recovery will take. This is true for Obama AND Bush AND FDR AND Jimmy Carter AND Ford AND Nixon. Reagan understood this and that is why his actions did lead to a recovery. Even Clinton had some experience with this because he ended up with a Republican congress that only gave him bills that restricted the size of government leading to an economic surge.
If you need another example, look at the Russia. For years they had a over controlling government that destroyed the country. When the government failed, the country took off and now they are trying to restructure the old controls, the gains the country made are starting to slip.
As controlling as China is, they keep a loose hand on the production side of the country. This has allowed them to make tremendous gains in just a few years. Meanwhile the U.S.A keep putting more and more restrictions on the private sector causing them fail or move out of the country where they can be more competitive.
You only need to look at history to see this is true.
Insanity: doing the same thing over and over again and expecting different results. Albert Einstein.

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if you are correct then in 1937 when the gov't attempted to back out of their increased roll and the economy did another dip it was because the gov't was still invovled. Your solution just doesnt hold water. Economic recovery takes time and steady nerves. the gov't will get out when the economic indicators show that the economy is rolling on its own. as we learned in 1937 its not enough to want the economy to work it needs to be on stable ground before it will work on its own.

Since big business AIG and all the large banks screwed the pooch its going to take a while to get through the bad loans and all the other crap thats happened to get the everything settled down to where growth can occur without worrying about banks needing another bail out

actually if you recall CLinton forced the Republican congresses hand and shutdown the gov't until he got what he wanted. they were forced to concede to him on virtually everything he wanted. BTW Carter/Reagan was dealing with massive inflation the mortgage interest rates were at 20% and we still had 10+% unemployment. We are dealing with some deflation very low interest rates and the massive unemployment. this is a completely different dog.

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In a rich man's house there is no place to spit but his face.
Diogenes Of Sinope

Ok, you didn't read the document! Tell me what you know about the Wagner Act. That explains 1937 and the depression in a depression.
And the shutdown of government is not a good thing? Clinton may have got what he wanted but the truth is when Clinton first took office congress was far more left that Clinton was. He felt himself being pushed in a direction he didn't want to go. I think when the Republicans were elected to congress, Clinton was happy he didn't have to lean so far left. On the other hand, he wasn't a Republican either.
The line of what is excessive spending moves around depending on the economy. Clinton may have called the location of that line better than the Republicans as history shows. It is possible the country may have been better off with the Republicans line, but I will give Clinton credit for a better than balanced budget.
And again you didn't read the document or recall my past post. AIG while stupid, didn't create the bad paper it got stuck with. That was created by the government over years forcing banks to make loans the banks knew would be bad. Fannie Mae and Freddie Mac were both aware of the quality of the paper and congress had been warned several time of the the problem. Bush while I agree he made dumb moves, he did try several times to get a handle on the problem but was never able to get anything through congress.
We are not dealing with a different problem. The Great Depression had deflation so high that money reached 3 times it's original value. After the Fed understood that 6% interest rates were killing the economy the Fed dropped the discount rate to as low as 1%.
In the Carter/Reagan we had stagflation for the simple reason of the printing press were being run to fast. With the Great depression, we were still on the gold standard (Yes they still carried gold coins or paper that could be traded for the same) so running the presses faster wouldn't work. What happened and caused the depression is the Fed contracted the supply of money by pulling it out of circulation and putting it back in their vaults. The current Depression is very strange because the government is running the presses to fast but we don't have inflation. The reason is the banks are scared. Because they are, all this money is sitting in their vaults so they can pass the government stress test that may come their way. During the Great Depression, banks also held money in their vaults to for protection against government audits but there was also another reason for the deflation. My grand parents had a box under their bed that they keep almost all of their saving in (they lived on a farm). As time went on, they did put more of it in the bank, but even at the time when my grandmother had to leave the farm, there was still a sizable amount of money in it just incase the banks closed again.
As for massive unemployment, until we hit 10.7% we are still better off than the Jimmy Carter depression. P.S. while Carter deserve some blame, the depression existed before he took office. I still recall those stupid WIN (Whip Inflation Now) buttons that Ford put out. I also recall the price controls that would never work as long as the government was putting to much money in the economy not to mention that they may not have been constitutional.

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Since big business AIG and all the large banks screwed the pooch its going to take a while to get through the bad loans and all the other crap thats happened to get the everything settled down to where growth can occur without worrying about banks needing another bail out

No they (the banks) did precisely what they were mandated to do by law. They had marching orders, the CRA (Community Reinvestment Act), that mandated they loan $1 to Mr. Anybody in a depressed ghetto area, then and only then could they lend exactly $1 to Mr. Qualified in a growing area. It is a dollar for dollar requirement in the law. There was something about not being required to loan to unqualified, but they didn't spell out who was unqualified. e.g. FICO score under 700.

So if say GM needed a billion to put into the pension fund, the bank had to loan a billion in the ghetto. To unload the ghetto loans they got insured swaps and sold them off onto people who didn't investigate what was being sold, Fannie and Freddie who by law had to take them. (The banks dang well knew they were blowing smoke the entire ghetto wasn't worth a billion, but if they could resell the loans fast enough before they blew up, they were off their books and someone else's problem and everyone at the bank got their commission and profit sharing checks.) The insurance companies (AIG) collected the premium, but calculated the total risk wrong and wrote too many policies. (Remember AIG said this was their most profitable division!) When the bubble burst, suddenly that insurance payment was due on every single policy. OOPS! That is what systemic risk is all about.

Let's go over this again. The Carter era version of the CRA permitted the bank to certify that it couldn't find any qualified persons to loan money to in the ghetto and then they could loan to anyone qualified anywhere. This worked very well for a lot of years.

But, some people insisted that the banks were still redlining, so a revision was cooked up. The Clinton era revision of the CRA took out of the banks hands the ability to say that it couldn't find qualified loan applicants in the ghetto. It let people like ACORN sue them in court and force them to prove it. Now without a hard rule on the law about who was qualified, suddenly everyone is qualified. (Why not a government department to do this certification? The anti-government types in politics, you know game players not the interest of the country types.) In case you have forgotten litigation is extremely expensive and this was the kind that a new lawsuit could be filed every day. If the bank can't loan money it has no profit. Unacceptable for private industry. They went looking for a way to silence ACORN's lawsuits. They found it. Loan to the unqualified in the ghetto, get AIG to write a insurance policy against default and sell the loan off to Fannie or Freddie. After all real estate never went down so an occasional repo wasn't an issue. And the bubble built for a decade!

Oh, why the insurance in the first place? Fed policy never changed. If an unqualified loan was on the books it was high risk. Enough high risk and the Fed would take over the bank. They had to get them insured to make them low risk, but they also know how bad they stank so they wanted them off the books period.

Meanwhile, some others saw the game and wanted in. Those being the Green Light and Countrywide crowd. They figured out if Fannie and Freddie had to buy the loan, qualification was a thing of the past. Suddenly you have the option ARM, the 110% loan and all the rest. Well boys sell them to anyone, get the commission check. We can get greedy AIG to write a policy and sell the junk off to Fannie and Freddie. Systemic risk meets greed and greenhorns.

So what really happened? Congress attempted to implement social policy by writing monetary policy. That is what happened. If you don't understand the root cause you will be doomed to repeat the mistake over and over again. Social policy should be done in social policy legislation and monetary policy in monetary policy legislation. When you mix the two all you get is a cluster FUBAR!

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