The Business of America is Business

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The gold standard did not cause the problem - it simply made it impossible to solve it. The problem was the bubble economy and the resulting debt deflation. Supply side is a bad idea because wealth concentrates at the top and the very wealthy use the money to inflate bubbles. The bubbles eventually burst and this can be disastrous. In 1929, the US had the worst income and wealth inequality in its history up until then and that destabilised the economy... As for the gold standard, the gold standard tied the hands of the authorities to fight the Depression. Those that abandoned the gold standard the first got out of it quickest. The USA devalued the dollar substantially against gold under FDR.

It was a bubble economy and the benefits were very unevenly divided. True, there was progress in those years such as electrification and the like, and Herbert Hoover was very visible in these efforts as Commerce Secretary - more visible really than Coolidge. But Coolidge's approach made the crash inevitable. Even the Austrians say so, speaking of "malinvestment" caused by his policies.

The War was the New Deal on steroids and vindicated FDR's approach though some might say it showed that he was too timid and too concerned about deficits and debts for his own good and that of the country. He didn't go far enough in the '30s and the war proved it.

There's one more thing people should know. The Treasury Secretary under Harding, Coolidge and most of the Hoover administration was Andrew Mellon, whose response to the Depression was "liquidate land, liquidate labour, liquidate farmers, liquidate stocks... and purge the rottenness from the system...people will work harder and live a more moral life". He was Treasury Secretary under Coolidge and also under Harding - the 1921 so-called depression recently popularised by Glenn Beck, he was there for 1929-31 also... this idea that 1921 proved that laissez-faire works does not explain how the same Treasury Secretary failed so miserably in 1929-31.

The gold standard is equivalent to having a fixed exchange rate which is equivalent to having a universal currency between nations. So basically it increased the scale of the Great Depression. Instead of being a phenomena within the US borders it became truly global. Of course these days you don't even need gold standards or fixed exchange rates to spread an economic depression around the globe.

QFT

And this is precisely the problem with Obama today, although Obama is also quite cozy with the scoundrels in the financial sector in contrast with FDR.

Setting up the Cat Food Commission and repeating Deficit Terrorist propaganda was a terrible move for Obama - that nonsense about money running out and the Federal government must balance its budget as a household - never mind that it has been in debt since Van Buren after Jackson's misguided repayment of the debt that caused a depression. The USA should have elected a far older leader who remember a time before the Neoliberal Revolution (Reagan, Thatcher, Rogernomics, Mulroney, etc...)

To think there are Republicans thinking seriously about "how will we repay the debt" and how this must be done at once - the USA has been in debt since Van Buren! Since Van Buren! He left office in 1841 was it?

Debt and Deficit are workable as long as the levels are kept low relative to income. Our national debt is now approaching our GDP.

ruveyn

If you want to understand the role of business in the USA listen to the long lecture at http://www.bu.edu/buniverse/view/?v=20ZaW9PO

Howard Zinn lecture indeed! Zinn was a sh*t. Bill Moyers is a well versed Pinko Stinko Liberal with a good vocabulary.

ruveyn

I'm, not going to act like i know anything about economics, but who will create the jobs if the wealthy dont? dont you have to have wealth in order to make it? i've never heard of a poor person creating 1,000 jobs out of thin air?

is the demand side any better? i dont know. I agree that devaluing the dollar is a very bad idea, and we need to restore that as soon as possible

There are none so deaf as those who will not hear. The stupidest reaction to an argument is to resort to name calling.

I could have cried Treason! to Moyers call to insurrection. But I did not.

Both Zinn and Moyers want the labor unions back in power. That means rule by the thugs.

ruveyn

And the total corruption of all sectors of government by corporate lobbies is not thuggery?
It was the rise of the power of unions that established the 8 hour work day, social security and all the other contributions to the growth of the middle class and the establishment of a living wage.. That's thuggery?

It also created Jimmy Hoffa.

ruveyn

And business created Enron, amongst other crooked organizations. What does that prove.