Economic Lessons from History

By: Guest
October 8, 2011

Today’s guest post is from Glass CeilingThe United States and the western world live in an interesting and terrifying time in terms of monetary economies.  Yet even so, we are not on level footing. Our histories, traditions, and governments are different. Western Europe, for instance, is no stranger to continental man-made disasters. The twentieth-century alone provided many, many dreaded lessons that the US has only read about in history books and the internet. For instance, in November of 1923 the value of the German mark compared to the US dollar was 4.2 trillion to one. That’s 4.2 trillion German marks to one US dollar, as recently as 1923.  Imagine that. Stories of folks burning their paper money to heat their homes, or using them as toilet paper are legendary. But just consider what it really meant in living terms. Supposedly people would do anything for functional money or to obtain food: sex, theft, extortion, murder, to name a few.  Middle-class travelers from other countries often came in and swept up large piles of real-estate and a possible enjoyed a sexual holiday for pennies on the dollar. What does this kind of humiliation do to a nation-state? What do its citizens learn (or not learn) from such an experience?

In its short history, the US has experienced hardship as well, but nothing compared to the ancient civilizations of the world. Yes, we have stories of the Civil War and the Great Depression, but they are hardly on the same scale as the repeated blows of, say, Germany in the last five hundred years. Or China. Or Russia.

Our Great Depression was in fact a global depression, but we in the US tend to know more about our predicament in the 30s better than we know of any other society. We have heard stories from the mouths of those who lived it, from relatives, PBS, and the History Channel. We know that poor folks often had to get creative and barter for the essentials of life. They were a hands-on, wood-working, brick-laying, machine-operating, car mechanic-ing, farming, ranching, hunting, fishing, cooking, and sewing society: an agrarian and manufacturing economy to the core.

For several reasons, the US pulled out of its largest economic disaster to date. Undoubtedly, one of the main reasons was our population’s resilience and ability to find value in our own work, whether done by the officially employed or not. The figurative and literal distance between hand-to-mouth utility was very close.

That was then.

Today, we face a somewhat similar situation. We all know that there is something quite wrong going on in our economy and many of us directly blame our government for it, while others blame class warfare and corporate greed. Others see it as just another chapter in the continuing saga of good vs. evil. In any case, most of us are at least a little concerned about what may come. But if we use recent history as a roadmap, we must confess that although there appear to be government safeguards in place to avoid a repeat of the 1930s, certain aspects render us in a far worse state than what was endured in the Great Depression. For instance, we are now a service-based economy, with only a fraction in manufacturing (as opposed to being just the opposite in the 1930s.) 
Kids then learned the practical skills that their parents knew: farming, ranching, cooking, sewing, etc.  Will the skills kids are learning today match the demands of another global depression? How could this affect our recovery?  Could we “keyboard” our way out of disaster? If not, is there any practical reason or way we could expedite a learning curve?

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51 Responses to Economic Lessons from History

  1. Dan on October 8, 2011 at 7:25 AM

    i’m not sure what you mean by certain aspects render us in a far worse state than was endured in the Great Depression. The current unemployment rate is 9.1%. At its worst, the unemployment rate during the GD was 25%! That’s almost THREE TIMES more than it is now! What makes it worse now than then? We protest these days whilst holding Apple iPhones. You want perspective but then you don’t actually provide evidence for how exactly we’re worse off. What is your evidence that a service based economy makes the situation worse than the manufacturing based economy that endured the Great Depression?

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  2. Glass Ceiling on October 8, 2011 at 10:01 AM

    Dan, manufacturing built this country. Manufacturing is part of the reason Germany is weathering the economic storm of Europe.

    Today, word on the street is that we may not recover from our debt in 50 years or more. Of course we don’t hear this on the news, but people are suspicious of the media these days and some wonder if the 9% unemployment is scewed because so many who have jobs are under-employed.

    The main point of the article is are we ready for a barter economy if the dollar failed or we ended up with 25% unemployment?

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  3. Stephen M (Ethesis) on October 8, 2011 at 10:14 AM

    The main point of the article is are we ready for a barter economy if the dollar failed or we ended up with 25% unemployment?

    Which is why articles of this sort are so important.

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  4. small star on October 8, 2011 at 10:42 AM

    The dollar isn’t going to fail unless we deliberately crash it. What would the world replace it with? The Euro? Going down. The yuan? It’s pegged to us and has it’s own bubble housing etc. problems. Germany had hyperinflation in the 20′s because they had their industry destroyed in WWI and had to pay their debts in something other than deutschmarks, which they couldn’t do as they had nothing to export.

    Our debt are very conveniently denominated in dollars. We’re the reserve currency for the world. Hyperinflation, not gonna happen. Currently, we’re at historic lows for inflation.

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  5. small star on October 8, 2011 at 10:47 AM

    The reason we pulled out of the great depression is because the government put many many people to work through roosevelt’s Great Society and then through the Uber-Keynesian stimulus of WWII. When people worked, they had money to spend, which, in turn created jobs to allow them to spend it.

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  6. Douglas on October 8, 2011 at 11:49 AM

    #1 – (Dan, my fave liberal) – excellent perspective! It’s bad, but there has been worse in American history. Even in this deep recession, believe it or not, some employers find it hard to fill positions (whether they’re being overly skittish or choosy is debatable)
    http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748704895004575395491314812452.html

    #5 – The US economy had already “pulled out” of the Great Depression in the latter part of Hoover’s term but fell apart again due to passage of the (Reed) Smoot-Hawley Tariff Act and deepened even more as the 1932 elections neared and employers feared the Democrats controlling Congress and the White House. Many feared that it portended a Communist revolution, and there was widespread buying of gold and other portable valuables, and a great deal of capital flight. Why do you think Roosevelt declared a banking holiday immediately upon assuming office? FDR’s actions, though blatantly unconstitutional, did a lot to restore confidence among the middle class which even then as an aggregate had the bulk of available cash (then, as now, the majority of the “wealthy” have their assets in land and/or securities, many that aren’t that liquid). What happened over the period 1933-1938 tends to mirror our present times. There was a period of ‘recovery’ as New Deal programs temporarily injected disposable income. This lasted a few years until Federal deficits rose and the American public got fed up with the situation. Then a second “recession”, starting in late 1937 and enduring into just about Pearl Harbor.
    The Bretton Woods Conference in 1944, though it set the pace for the current fiat currency problems worldwide (it’s not just the Federal Reserve that cranks up the printing press), did establish world trade “peace”, at least for a while. This, along with pent-up post war consumer demand, righted the economic ship, at least for a while….

    http://www.realclearmarkets.com/articles/2009/06/world_war_ii_did_not_end_the_g.html

    The only thing that I agree with #5 is that when people “work”, they have money to spend, and it fuels the economic engine. The question is whether we keep attempting to “reboot” the economy with the Keynesian Operating System (pardon the geek hyperbole), or we let the applicable markets freely seek their level. I would say the latter, even though it’s going to be painful in the short term, especially for those used to suckling on the Government teat.

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  7. Glass Ceiling on October 8, 2011 at 12:35 PM

    I prefer optimism myself. But I cannot ignore that our lack of manufacturing creates a sort of “house of cards. ” Yes, Germany’s industry was destroyed by war and had large debt, as Small Star mentioned.

    Guess who now has large debt now and has been losing its industry for decades? Um, us. US.

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  8. small star on October 8, 2011 at 1:06 PM

    Here is a graph of GDP from 1920 to 1940. The line keeps on going down during Hoover’s time as president (1929-1933) and then spikes right up when Roosevelt came into office and started the government programs that put people to work. http://en.wikipedia.org/wiki/File:Gdp20-40.jpg

    The war spending during WWII gave the common man and the common woman, occasionally, work. It was Keynsianism on steroids.

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  9. FireTag on October 8, 2011 at 1:17 PM

    Let me give a slightly more fundamental take on the WW2 “boom-causing effect”. People didn’t spend in the Depression because the poor figured they’d need the money they had even more tomorrow, while the rich could figure their cash could buy even more tomorrow.

    I would suggest that the prospect of war defeat galvanized people into believing there might not be a tomorrow to save for, and so everything went toward immediate survival. Spending on war had an effect, therefore, that spending on peacetime infrastructure never could have.

    In a more general sense, then, it matters what you stimulate, not simply how much; and it matters whether you have confidence or not as to whether the “stimulators” have a clue what they’re doing.

    The loss of confidence in institutions in the West at present becomes self-fulfilling pessimism. But one can’t solve that problem by “whistling-past-the-graveyard” when each day brings new evidence that leaders are more concerned about saving their power than saving their people.

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  10. Henry on October 8, 2011 at 1:49 PM

    The world power that loses its manufacturing base will cease to be a world power.

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  11. small star on October 8, 2011 at 2:04 PM

    People didn’t spend in the depression because they didn’t have jobs. There was a 25% unemployment rate. Fast forward a few years: much of the government spending that put people to work was infrastructure spending–that’s where, for example, the interstate freeway system came from. During the war, there was rationing–not some sort of devil-may-care carpe diem party. That was the roaring 20′s.

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  12. Glass Ceiling on October 8, 2011 at 2:47 PM

    The main point in the OP we are less prepared for a depression un terms of self-sufficiency. What does this mean for us?

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  13. FireTag on October 8, 2011 at 2:47 PM

    Small star:

    People didn’t have jobs because people weren’t spending. Chicken and egg. You can’t have one without the other, and you need to explain why the people who HAD jobs weren’t spending either.

    Keynesian theory was a theory of leveling business cycles to mitigate the deviations (BOTH boom and bust) around the long-term trends in your GDP chart above. It is not a perpetual-motion-machine that allows leaders to fool people into permanently higher levels of economic activity. Government spending increases have to be BELIEVABLY balanced with previous savings or future spending cuts, or people will reject the government.

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  14. FireTag on October 8, 2011 at 3:05 PM

    Small star:

    ” During the war, there was rationing–not some sort of devil-may-care carpe diem party. That was the roaring 20′s.”

    The rationing wasn’t because people weren’t willing to spend; they were buying tanks, ships, guns, fighters, bombers, military boots, ammunition, and bases — and using them up as fast as they built them.

    Oh, and the primary justification for the interstate highway system was to MOVE MILITARY TROOPS, EQUIPMENT, AND SUPPLIES since we had to be prepared to fight a WW3. In fact, Eisenhower’s warning against the military-industrial complex came in order to stop the tendency to justify what we would today call “crony capitalism” in terms of national security needs.

    Glass ceiling:

    Experiencing the power outages with the East Coast storms this pass summer certainly taught me a nasty lesson about holes in my self-sufficiency. I have some special medical problems, to be sure, but I need to do a better job of preparing and not putting myself in a position to burden others.

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  15. Glass Ceiling on October 8, 2011 at 3:24 PM

    Firetag,

    Ike’s warning was prophetic. Wasn’t it? Very underrated guy.

    I started seeing things differently after Katrina. People were getting shot at for looting, although some of the looting was for food and medicine. Its a hard situation when your choice is looting for insulin at the risk of gunfire, and not getting your insulin at all.

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  16. Glass Ceiling on October 8, 2011 at 3:35 PM

    Dan,
    As far as your first question above :
    I believe that our lapse of skillsets over the last half-century would render a very violent society if we ever really had to depend in on own know-how to stay fed, clothed, and sheltered. This was not so much a problem in the Great Depression.

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  17. Dan on October 8, 2011 at 4:43 PM

    Glass,

    Today, word on the street is that we may not recover from our debt in 50 years or more.

    Well, it did take the previous generation about 30 years to finally pay down the debt from World War II. So yeah, paying debt off will take a while. Of course, that generation had high taxes, because they all knew it was important to pay their debts off. Our generation is full of selfish idiots who want their kids to pay their debts. We’re going to be viewed as one of the worst generation of Americans in our history, because we refuse to pay our bills, sending them to our children to pay off. That’s just utterly awful.

    The main point of the article is are we ready for a barter economy if the dollar failed or we ended up with 25% unemployment?

    This is utterly ridiculous. There is no evidence in the market that the dollar is anywhere close to failing, or that we would end up with 25% unemployment. The dollar is relatively strong with other currencies; U.S. inflation is historically low, and investors are flocking to US debt to secure their investments. Your fear mongering has no basis in reality.

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  18. Dan on October 8, 2011 at 4:46 PM

    Glass,

    I prefer optimism myself.

    This utterly baffles me because your piece is full of negativism. There is NO optimism in your piece.

    I believe that our lapse of skillsets over the last half-century would render a very violent society if we ever really had to depend in on own know-how to stay fed, clothed, and sheltered.

    perfect example. Where’s the optimism?

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  19. Glass Ceiling on October 8, 2011 at 5:20 PM

    I guess we’ll see, Dan. Is that why the Church asks us to have a year of food storage as well as a year’s income saved?

    I’m not all that worried about the dollar failing. I only mentioned 1923 Germany because people tend to treat modern history like it was a thousand years ago.

    But I am just a little bit concerned about inflation itself…or a depression from lack of employment. The current media and government have absolutely no desire to accurately gauge the real circumstances of unemployment right now. It’s their Achilles heel.

    I think that people should act as if, just possibly, FEMA might not be there if things getting, tough. And the time to learn to begin to be self-sufficient is not after the —- hits the fan.

    And back to the OP, I hope we never really need to know how to live without the convenience of Walmart. But if we ever did, those who know to make and do (and make do) will be the better for it.

    I don’t think that’s fear mongering. I think it’s called disaster prep. Or is it just common sense?

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  20. Glass Ceiling on October 8, 2011 at 5:35 PM

    The optimism is in the fact that some people, Mormons often, prepare for possible misfortune. Some people look at things head on, without fear or shame. Taking a hard lops does not a pessimist make.

    I am not saying any of this HAS to happen …but it is not like it hasn’t before. I hope for the best, but I am not solely depending on the hope of a functional government to make it all better if things got bad. Again, need I mention Katrina?

    One man’s optimism is another man’s definition of pessimism. Just like one man’s optimism is another man’s definition on delusioment.

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  21. Glass Ceiling on October 8, 2011 at 5:36 PM

    Taking hard looks does not a pessimist make ….

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  22. Dan on October 8, 2011 at 6:59 PM

    I’m not all that worried about the dollar failing. I only mentioned 1923 Germany because people tend to treat modern history like it was a thousand years ago.

    Yes, you are worried about the dollar failing or you would not have mentioned it. Why bring up something like that if you’re not worried about it? You’re feeding the flames of the Ron Paul acolytes. They eat this crap up.

    But I am just a little bit concerned about inflation itself

    Why? What evidence do you have of inflation?

    The current media and government have absolutely no desire to accurately gauge the real circumstances of unemployment right now.

    You frame this as if there is collusion between “current media”—whatever that means, very vague—and “government”—again, whatever that means, also very vague—to “absolutely not” accurately gauge the real circumstances of unemployment right now. Obviously if I find one piece of evidence of either “current media” or “government” that tries even remotely to accurately gauge the real circumstances of unemployment right now, your point would be lost. This speaking in platitudes and absolutes doesn’t do you well, Glass. And, yes, it makes you highly pessimistic.

    I think that people should act as if, just possibly, FEMA might not be there if things getting, tough.

    Interesting strawman. Name someone who acts as if FEMA should always be there, and who thinks they shouldn’t try to do things on their own when things get tough. Now, I could point to you the flooding destruction in Vermont from Hurricane Irene, or in eastern Pennsylvania from Tropical Storm Lee, and politely invite you to visit the people there and say, “tough it out on your own. You’re silly enough to purchase a house in a flood zone, deal with the problem yourself.” I’m gonna guess you’re not gonna do that, because they’ll pull out their guns and shoot you on sight. (Yes, America is a violent country).

    And back to the OP, I hope we never really need to know how to live without the convenience of Walmart. But if we ever did, those who know to make and do (and make do) will be the better for it.

    You’re not arguing here for disaster prep. In fact, in your piece you don’t even bring up what we should be doing. You’re merely fear mongering. You’re bringing up comparisons that fail when tested (Weimar Germany and our current situation). There is little of actual practical value in your piece, and you wish to be taken seriously. If you wish to be taken seriously, then write a serious piece. Don’t fear monger.

    Again, need I mention Katrina?

    If you give the keys of the car to someone who hates cars and hates driving and then are shocked when they fail to drive well, don’t get mad at the car. Katrina was the perfect example of never giving Republicans control of the country. They argued that the government was ineffective and then ran it ineffectively. Don’t blame the government, man! Blame the damn Republicans for their failure! The government is merely a tool.

    I hope for the best, but I am not solely depending on the hope of a functional government to make it all better if things got bad.

    Fascinating strawman. Pray, tell, who is arguing to be “solely dependent on the hope of a functional government to make it all better if things got bad?” It would do you well to avoid logical fallacies, Glass.

    Taking hard looks does not a pessimist make ….

    You failed to take a hard look. Thus you are a pessimist.

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  23. Dan on October 8, 2011 at 7:06 PM

    oh, and living here in New York, I was paid a visit by a FEMA representative who asked if there was any structural damage to our house due to Hurricane Irene. I replied that our house and the neighboring houses were not damaged, except for a tree in someone’s backyard that broke. I really appreciated that my tax dollars went to someone who was kind enough to check on areas affected by a powerful storm to make sure we were okay. THAT is effective use of taxpayer money. Makes me proud of this country. The citizens of Joppa, Alabama are truly lucky that this country decided to pool together funds for when something so terrible as a powerful F5 tornado runs through a town and utterly destroys it. Nobody deserves that kind of destruction, and nobody had it coming. It is truly one of the Christ-like aspects of this country, to say “I was not affected by that tornado, but I believe that someone would do to me the same, that if my house were destroyed by a powerful flood from historic rains, they would provide for me in time of need, thus I will do the same, to a total stranger, because that is what Jesus Christ taught me to do.” Remember, Glass, Jesus never claimed “do unto others, except through government programs, because they are of Satan!” Ayn Rand’s Objectivism is a poison to this country and to Christianity, Glass. It is best to avoid that poison.

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  24. Glass Ceiling on October 8, 2011 at 7:43 PM

    Wow,Dan…you feel better?

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  25. Dan on October 8, 2011 at 7:45 PM

    yep, i feel good. Ironically I am listening to a song called “Sunny” by Boney M. :)

    But i don’t take kindly to bullcrap. :)

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  26. Dan on October 8, 2011 at 7:49 PM

    man, i’ve got a positive playlist going on now…Sheryl Crow “All I Wanna Do.”

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  27. Douglas on October 8, 2011 at 8:07 PM

    #25,#26 – keep the Pandora going…good for the soul…BTW, Ms. Crow’s tome from 1994 had some easily-modified lyrics that could be expressed in BAD taste…VERY bad taste. You figure it out…
    The problem with the doom-saying is we confuse things that COULD happen versus what WILL happen. Yes, the Govt’s monstrous deficits concern the crap outta me. Does it means the USA is going under? Highly debatable. All it means is that the present dynamics cannot and will not endure. It’s like back in the late 70′s through the mid 80′s, there was all this fear-mongering about “Global Thermonuclear War” and WWIII. Remember “War Games” and “The Day After?”. The thought of a nuclear bomb ruining your whole day was seriously on folks’ minds at the time! Then along comes Gorby, Perestroika, some actual common sense from Ol’ Dutch in nuclear arms negotiations (odds are he got lucky with the right advice), the fall of the Iron Curtain, and the rest is history…I do believe in the ability of the American people to solve the current economic problems. It might take a rude awakening, ala’ “Pearl Harbor” in some economic form, to awaken the collective “Sleeping Giants” (remember a quote questionably attributed to Isoroku Yamamoto). But I have faith that this country will go on.
    The Church’s advice about having a year’s food storage, 72-hour kits, and so on (Provident Living) is as much about PERSONAL preparedness as some “prophecy” that the “stuff” will hit the fan. We can suffer our own personal setbacks even when things are hunky-dory for everyone else. But if we ARE prepared, we need not fear (or fear less)

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  28. Dan on October 8, 2011 at 8:14 PM

    Douglas,

    All it means is that the present dynamics cannot and will not endure.

    Indeed. Inevitably, inexorably, we WILL have to raise taxes in order to pay the debt incurred by a generation of selfish fools who wanted their cake and are making their children pay for it.

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  29. Glass Ceiling on October 8, 2011 at 8:15 PM

    In your world, its bullcrap. And in your world, you won an argument.

    In my world , your argument is not so strong …as we have discussed in other recent posts. In fact, it could take all night. I guess we’ll just have to leave it there. Let’s just say this: you have complete faith in the Federal government. And I think that is a bit gullible.

    But it’s Saturday night. So we will have to do this on another post.

    But I will give you this : you were right that my OP could gave been stronger. I’m new at this.

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  30. Stephen M (Ethesis) on October 8, 2011 at 8:16 PM

    Dan, why don’t you look at http://bradhicks.livejournal.com/119283.html and give us a better argument?

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  31. Dan on October 8, 2011 at 8:22 PM

    Glass,

    you have complete faith in the Federal government. And I think that is a bit gullible.

    Um, where have I argued this?

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  32. Douglas on October 8, 2011 at 8:46 PM

    #28 – whether taxes NEED or OUGHT to go up is irrelevant to the argument. Failing some ‘revolution’ that sweeps in Ron Paul as President and a like-minded Libertarian Congress, taxes WILL be raised in some form, even if it’s a Republican blow-out in 13 months. That’s because NO ONE will risk the political consequences of taking the budgetary meat ax to the current slew of Federal Entitlements..at best, there will be “reform”, tightening up of eligibility, raising of retirement ages again for Social Security, changing compensation (meaning lesser) for Federal employees and military members. Then, those measures not getting nearly enough (not even close), there will be justification for some form of tax increase (if nothing else, sunset the Bush-era tax cuts AND let the Alternative Minimum Tax garner in more households). Even then, will the problem be solved? Of course not, because the basic causes won’t even remotely be addressed.
    The only thing I can agree with wholeheartedly with you, Dan, is that as long as there is this spirit of selfishness in America, the financial issues won’t go away. And that can’t be addressed in the political realm…hypothetically WE LDS have something to say in that matter, but, of course, we must personally set the examples first! Are we…let each of us consider our ways…

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  33. Dan on October 8, 2011 at 9:01 PM

    Douglas,

    yeah, only a violent revolution can put someone like Ron Paul in charge. Thank God regular Americans won’t allow that to happen.

    That said, you speak of these entitlements as if Americans don’t want them, but in practically every survey out there, Americans love their entitlements. They love Social Security. They love Medicare. You speak as if the American people, who love their entitlements, will now want to completely eliminate those entitlements because….of what reason exactly? this image perfectly encapsulates the idiocy of the argument made by those on the right.

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  34. Douglas on October 8, 2011 at 11:34 PM

    #33 – Until that last post, Dan, I thought there was hope for you.

    You misunderstood my previous post ENTIRELY. You are RIGHT about Americans not wanting to give up ‘their’ entitlement (or tax deduction). That’s why next year’s election, unless it dethrones both Democrats AND Republicans (pipe dream), will only be (1) an argument as to the supplier of the knife used to skin the American public, and (2) the length of postponement of the inevitable day of reckoning and how hard the fall and how long to pick up the pieces. The long-term outcome will differ little regardless of whether it’s Barry, Mitt, Herm, or Michelle being sworn in as “El Presidente, El Commandante y Jefe on 20 Jan 2013. It’s because the whole shebang of “entitlements”, Social Security, Federal Pay (civilian and military) and Medicare are still wanted in some form, even if many agree that they may have to accept less, that raising of taxes is inevitable. Even with all the “cuts”, the math dictates so. The leading edge of the Baby Boomers turned 65 this year, which means that SS and Medicare will sky-rocket, and there’s less of the younger folks (the average not earning as much as their predecessors) to fund it!

    Those who seriously contemplate a VIOLENT overthrew, whether far left or far right, aren’t thinking of Ron Paul one iota. Fortunately, absent some “SHTF” scenario, the American public won’t heed any “revolutionary” fervor. The “revolt” I wrote of regarding Mr. Paul is purely philosophical and political, but I’m fairly sure it ain’t gonna sell. I could be wrong, but I see no signs that it’s nothing more than some Internet-based fervour of the dedicated 5% that consider themselves Libertarians. And by the nature of Libertarianism, which renounces force, the LP types will once again meekly accept the political verdict which will ignore them.
    That’s one reason why I’ve changed my registration to Republican for the first time in 24 years (yes, blame me, I voted for Bush ’41 when I could have voted for Kodos!). At least by the time the Republican primary comes around in CA, if indeed Mr Paul is still in the fight, I can punch his spot. Else, it’s a tossup between Herm Cain or Romney. Either I feel has the best shot at unseating Obama, which will do for a start. Still, it’s just a start, and could yet prove futile.

    http://www.urbandictionary.com/define.php?term=i+voted+for+kodos

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  35. Miskky on October 9, 2011 at 12:46 AM

    It is sad when many discussions of problems we face now and perhaps in the future are considered “doom saying”. It reminds me of the President of a now defunct financial institution, he didn’t want to be told of problems. “Yes” men are of no help in any situation…

    I didn’t read closely all of the posts but if anyone here thinks our unemployment will not reach 25% should google what the real unemployment rate is right now and it is NOT 9.1%, it is more like 18% or more. During the Clinton administration the way the unemployment rate was calculated was changed. You know the old adage that “liars figure and figures lie”, well, that is what we have now about unemployment.

    It is interesting how Dan blames the Republicans and the right when for most of the last 50 to 70 years the congress has been controlled by the Democrats. The most successful administration in the past 100 years measured from an economic standpoint, that is no recessions, was the Clinton administration and that was because of the checks and balance between a Democrat President and a Republican congress.

    Just like the Book of Mormon states, when the will of the people (that means the majority) choose iniquity, the country will not stand. Right now 46% of people want the government to take care of them and 47% do not and of course there is that “margin of error”. And, as we can see by all the demonstrations in here and abroad we most likly have reached or passed that tipping point.

    As to Glass Cieling’s question of our preparedness… it seems self evident that most modern western style countries might be the least likly to survive economic disaster because we HAVE lost much of the old knowledge that our forefathers had on how to survive on very little. So many people seem unable to take care of even the smallest injury or illness without the help of a Doctor or some other medical help. Creativity is decreasing and that would hamper our ability to innovate to save ourselves. It seems to me that the loss of manufacturing leaves us without those who might help up help ourselves when industry and commerce might fail around the world.

    Doom saying…!!! What about prophesy? Do we ignor prophesy? Does national debt not demand the same good advice that we the people get not just from leaders of the church but from many intelligent financial advisors? A head in the sand solves no problems, accepting current reality is a start.

    Our world financial systems is totally based on debt and as such it requires confidence. Confidence in the system, confidence in the honest payment of debt, confidence that lending is to those who can and will repay debt, etc. All that came tumbling down in 2008 and all the bickering, blaming and vitriol is never going to instil confidence in anyone involved in the economy and we are ALL INVOLVED…

    Just my take after 70 yrs watching crazy cycle…

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  36. mudonme on October 9, 2011 at 12:48 AM

    Hey, just to lighten this up a little….you did read that the recession ended well over a year ago, didn’t you. I know my house is in better shape now that I know that…tee hee!!

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  37. Jon on October 9, 2011 at 2:16 AM

    WWII ending the depression, the ultimate in the broken window fallacy. If that were true why don’t we build a whole city in the middle of the ocean, have a bunch of our young men die building it and then blow it up, that would save economy (yeah, not really it’s completely ludicrous.

    As for the blue vs red team, they’re both owned by the same boss. Just keeping your eyes on the wrong ball.

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  38. Dan on October 9, 2011 at 5:03 AM

    Wheat and Tares has indeed been taken over by crazy people. I’m outta here.

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  39. Stephen M (Ethesis) on October 9, 2011 at 9:11 AM

    So, Dan, your response to my link is …

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  40. [...] what’s up on Wall Street? Kuri rounded up some good articles about it. The parallel with the Tea Party has [...]

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  41. Will on October 9, 2011 at 10:32 AM

    Miskky,

    @35 Great comment and right on the mark, very well said.

    I would add integrity is hanging by a thread and the scripture in Helaman is right on the mark:

    ‘For the laws and the Government were established by the voice of the people and those who choose evil were more numerous than those who choose good, therefore they were ripening for destruction, for their laws had become corrupt”

    The statement that is most reveling on the loss of integrity, by the 99ers or others, is that the rich are not paying their fair share. Those who support this statement either don’t understand who pays all the taxes in this country, or they have no integrity. They are presenting the illusion that the wealthy in this country don’t pay anything. This is a flat out, blatant lie. The reality is that the top 25 percent pay 86 percent of all federal income taxes and the bottom 50% don’t pay a dime.

    The other big lie circulating around is that retiree’s actually earned their social security check. The reality is, if they die within two years of retirement that is true, they are getting back what the put into the plan. Most of those collecting social security receive every dime they paid into the system within two years after retirement. After that, they are simply welfare recipients.

    Yes corrupt leaders setup these programs, but they were demanded by corrupt people. It reminds me of a statement by President Kimball when talking about pornography and drug use. He said, (and I am paraphrasing) we can put the blame on the drug dealers and pushers of pornography, but if there were no demand for their filth they would go out of business.

    The tax structure and benefits in this country got us into this financial mess. We need to get back to a system that requires contribution by everyone and everyone needs to provide for their own – their own retirement, their own health care, their own food and shelter. We are not living the commandments of God and are reaping the benefits of that decision “By the sweat of “THY” brow shall thou eat “ALL” the days of thy life.”

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  42. Jon on October 9, 2011 at 11:23 AM

    Wheat and Tares has indeed been taken over by crazy people. I’m outta here.

    Ad hominem fallacy. Doesn’t refute the claim being made by logic with logic.

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  43. Glass Ceiling on October 9, 2011 at 12:31 PM

    Miskky,

    Thank you for discussing the question in the OP. I didn’t think I was being totally confusing when I wrote it, although Dan insisted that I was. The original point was that things happen with and without warning. We are better off not only with food storage and shelter, but also with some sort of utility in such an economy. I think our country had that going for it during the last depression. I think we lack it now.

    It is also interesting that so many people have a different reading of the economy. Even news sources. It’s all very hard to trust.

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  44. Douglas on October 9, 2011 at 3:07 PM

    I think that I’ll vote for Kang next election…

    http://en.wikipedia.org/wiki/Citizen_Kang#Citizen_Kang

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  45. Cowboy on October 10, 2011 at 9:15 AM

    I don’t see the OP as fearmongering in the slightest. Perhaps there wasn’t an exhaustive inquiry into what measures should be taken to help us better prepare, but I think the point was well taken. The challenge with economic precedents is that at it’s core economics is not a hard science, but rather a social science. As such it relies on certain valid assumptions, such as people are motivated by self-interest, but dilutes it with some other less than valid assumptions in order to render the modes more mathmatically coherent, ie, that people are “rational” utility maximizers. There is a wealth of debate as to what historical precedents have relevance from society to society – such as, can we predict how society will react to “stimulus”, based on their responses in the past? It’s quite debatable – but that doesn’t mean we can’t try and extract some useful perspective. Capabilities are easier to account for, as they don’t depend social attitudes, but rather represent a balance of societies intellectual and physical capital – and therefore, what can be accomplished with these means. The fact is, Glass Ceiling is absolutely correct that at present, our stock of frontier-ready assets (intellectual and physical) are not as evenly disseminated as they were in Germany or the U.S. as they were during the early part of the twentieth century. As a service economy, one that thrives during times of general economic prosperity, we are even more susceptible to risk, as many of the service sectors rely on the manufacturing sector (broad generalization here, I know). Even for household consumer markets, the service industries are secondary to the goods sectors. After all, who will pay to have their grass mowed, or their hair done, if they barely have food/shelter or transportation? Secondly, even though we may be highly specialized (at least in those area’s where we are highly specialized) for our current/recent economies, what good will a HIPAA attorney be in a barter economy?? In short, the key improving ourselves in the long term, both socially and personally, is to reinvest in our stock of practical capital. Heavy equipment operation, agriculture, construction and development, basic self-healthcare, etc, etc, etc. Not that we should revert socially – but that perhaps there are better ways of preserving at least the “know-how”, plus a little experience, for the possibilities. This would go much further than food storage or financial reserves. I’m all in favor of having various forms of reserves, but in such a scenario as national/global dissaster, your food storage isn’t going to save you. Your ability to raise food, and knowing how to perpetually preserve it will, as an example.

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  46. Cowboy on October 10, 2011 at 9:23 AM

    Sorry, in re-reading my previous comment I can see that I was all over the map.

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  47. jmb275 on October 10, 2011 at 9:54 AM

    Re Cowboy

    Sorry, in re-reading my previous comment I can see that I was all over the map.

    Yeah, and try and throw a new paragraph or two in there! ;-)

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  48. FireTag on October 10, 2011 at 11:08 AM

    Jon:

    No one is saying that the war ending the depression was a good thing. It was a side effect, the same way that weight loss would be the side effect of amputating an arm. Bad thing, even though accurate.

    It’s argued only to show the falsity of claiming that progressive policies ended the depression. They did not work then, and there is even less reason to try them now when their main effect is to transfer wealth and power to the POLITICALLY connected.

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  49. Cowboy on October 10, 2011 at 12:09 PM

    I was typing fast – don’t rub it in.

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  50. Will on October 10, 2011 at 3:32 PM

    Cowboys can’t type :;

    Good to see you back, Cowboy.

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  51. Cowboy on October 10, 2011 at 4:06 PM

    Hi Will!

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