RELIGION or POLITICS ??? Rules for Economic Recovery ......See Year 1930

(This content was taken from a lecture at Hillsdale College by Amity Shlaes, syndicated columnist for Bloomberg. and a senior fellow in economic history at the Council on Foreign Relations.)   So here we go.

If you are wise enough to liesten to Glenn Beck you will know that serious trouble is brewing world-wide.  The focal point of it all is aimed directly at Israel and the USA.  Check oil prices and food. I hope it doesn't take a wrap to the head to wake up, and even better, LISTEN TO GLENN BECK. Even if he is wrong, will be an  excuse for a real celebration.


       How is this game of Monopoly relevant to the Great Depression?   We all know the traditional narrative of that event:   The stock market crash generated an economic Katrina.   One in four was unemployed in the first few years.   It resulted from a combination of monetary, banking, credit, international, and consumer confidence factors.   The terrible thing about it was the duration of high level of unemployment, which averaged in the mid teens for the entire decade.

       The second thing we usually learn is the Depression was mysterious -- a problem that only experts with doctorates could solve.   That is why FDR's floating advisory group -- Felix Frankfurter, Frances Perkins, George Warren, Marriner Eccles and Adolf Berle, among others -- was sometimes known as a Brain Trust.   The mystery had something to do with a shortage of money, we are told, and in the end, only a Brain Trust's tinkering with the money supply saved us.   The corollary to this view is that the government knows more than American business does about economics.

       Another common presumption is that cleaning up Wall Street and getting rid of white-collar criminals helped the nation recovery.   A second is that property rights may still have mattered less than government-created jobs, shoring up home-owners, and getting the money supply right.   A third is that American democracy was threatened by the rise of potential plutocracy, and that the Wagner Act of 1935 -- which lent federal support to labor unions -- was thus necessry and proper.   Fourth and finally, the tradional and finally, the traditional viw of the 1930's is that action by the government was good, whereas inaction would have been fatal.

       The economic crisis mandated any kind of action, no matter how far removed it might be from sound monetary policy.   Along these lines the humorist Will Rogers wrote in 1933 that if Franklin Roosevelt had "burned down the capital,  we would cheer and say "Well at least we got a fired started anyhow".

       To put this official version of the 1930s in terms of the Monopoly board: The American economy was failing because  there were too many top hats lording it about on the board, trying to establish a plutocracy, and because there was no bank to hand out money.   Under FDR, the federal government became the bank and pulled America back to economic health.

     When you go to research the 1930s, however, you will find a different story..  It is of course true that the early part of the Depression -- the years upon which most economist have focused -- wa an economic Katrina.   And a number of New Deal measures provided lasting benefits for the economy   These include the creation of the Securities and Exchange Commission, the push for free trade led by the Secretary of State Cordell Hull, and the establishment of the modern mortgage format.   But the remaining evidence contradicts the official narrative.    Overall, it can be said, government PREVENTED RECOVERY.   Herbert Hoover was too active, not too passive -- as the old stereotypes suggest --while Roosevelt and his New Deal policies impeded recovery as well, especially during the the latter half of the decade.  

       In short, the prolonged Depression can be put down to government arrogance -- arrogance that came at the expense of economic common sense, the rule of law, and respect for property rights.

Checking out here and looking forward to the next chapter of section of this wonderful history lesson. You should start to see similarities or may already have.     Cheers    CJ