Partly but not completely true, and the difference may be important.

First, we are not, AFAIK, planning to close down international trade with a bunch of populist tariffs and quotas.

That was a huge mistake back in 1930, I see that lots of people want to make the same mistake today but I think calmer heads will prevail.

Second, we are acting much. much more aggressively including much, much sooner. Roosevelt didn't take office and begin his stimulus/repair program until 1933, after the economy had plunged for 4 years and 1/4 of all jobs were gone.

That would be as if today's govt sat on its hands until 2012, then tried to repair 4 years of damage. Think to spring 2008 when Bear Stearns started the cascade of financial institution blow-ups, and imagine a "hands-off" govt policy. By 2012 (earlier, actually) there would be no financial system left. Without a financial system, you don't have a functioning modern economy.

Third, for better or for worse, today's economy has more "safety nets" for individuals. Someone who loses their job today has at least several months of govt assistance, which gives them time to find new work. In 1930, that person went straight to a Hooverville (shanty town).

Though, there is a problem that work today is more specialized. In 1930, an able-bodied man could reasonably be hired for many different jobs without needing specialized skills. The situation is arguably less flexible today.

I do agree that today's situation is headed in the direction of the 1930s, and that the govt is determined to avoid the mistakes of the 1930s. For example, govt is not going to stand back and let practically every bank in the US fail, as we did in 1929-1933.

The danger, of course, is that govt will make new mistakes. No-one said it was going to be easy.

But, look, the fact is that even after the economy was allowed to collapse for four years and US employment fell from 31MM (1929) to 23MM (1932), the extraordinarily aggressive initiatives started in 1933 did in fact help to pull employment back to 31MM (1937). As far as jobs go, the country got back to pre depression levels. This does not include WPA jobs. So, there is a way out of the abyss. It would be nice not to go down into the abyss in the first place, or at least to go down swinging.

This all comes back to a couple of courses I have taken along the way, one in particular-Systems Thinking. The basic idea of this is a system(in this case the global economy) is a web of interrelated activities. An action or actions in one area can and will effect the other areas-complex things do not happen in isolation. What we have now is the equilibrium of the whole world economic system has been upset by the collapse of the world credit system, upon which much of all economic activity is based.
I think a good Porsche analogy is tuning a Weber carb. When things go wrong, it is often the first thought to start twisting and turning the little adjustment screws in hopes of getting it back in tune. But maybe, just maybe, it is really a bad gasket, or a fouled needle jet, or bad gas or something else that needs to be fixed first. As we screw turners all know, once you start turning screws you loose track of how many quarter turns you actually did turn. And it gets further out of tune, and so on. Frustration mounts. You end up taking the carb off and getting a new one from Pelican. It is then you discover the bad plugs, etc.
The world system is so complex and so interrelated that a tweek here and a push there sees another ripple through the system. Each additional fix may actually make things worse!! There may actually be no real fix for this except some time for the illness to be purged. Like the flu-it takes its course. You don't get it very often, but when you do it is wicked bad.

I've never been able to spend myself into prosperity. Obama and Congress say they can do so with our nation.

Why do I have trouble believing them?

1- Balanced budget amendment.

2- Term limits.

But if you were having a life-threatening heart attack, you'd spend what it took to get healed, wouldn't you? Or would you say, nope, not gonna use those credit cards, I'll just lay here and die.

Oh ye of little faith ;) :rolleyes:

Stopping the change of the US becoming a "service" based industry would help.

There is no reason why many parts sold by Pelican could not be made in the USA.

Particularly parts that Porsche are probably not going to make much longer.
This would also apply to any vehicle maker.

Well that didn't stop Geithner from poking China in the eye with a sharp stick. Why antagonize the largest holder of US debt and on of our largest trading partners?

"By David Kotok
Geithner (on page 81 and again on page 95) answered: "President Obama -- backed by the conclusions of a broad range of economists -- believes that China is manipulating its currency. President Obama has pledged as President to use aggressively all the diplomatic avenues open to him to seek change in China's currency practices."

I suspect that's some political theatre.

Not all H1 folks come here for a basic engineering job and retire from it. Many of them become entrepreneurs. Go to an average high tech start up and look around. The diversity is staggering and this diversity is one of the main reasons we are world leaders in innovation. If you restrict this talent pool from coming to the country, we will no longer be competitive.

George

Bad analogy. But I'll use it. If I knew that I was placing my grandchildren, also my yet to be born great granchilden in debt in order to give me just another few years? Yep, I'd just lay there and die.

A curse on Congress for doing this to future generations! And for what? They are only delaying the inevitable, the way I see it.

Crazy spending got us into this mess...spending money we didn't have. Spending more money we don't have is hardly the way out.

There is a lot of bad stuff hidden away in the current plans. Stuff like "buy backs" for old or gas guzzling cars. Many in congress now are using the stimulus package to further their pet projects. There havs been to much bailout money going to bonuses & parties.

I would like to see the current bail out plans trashed & something aimed this way. I believe the following will give some help that is needed & take away some of the ways the fat cat execs are reaching into the taxpayer's pockets. It would also limit government control of the free market.

Refundable tax credits for any business that rehires workers laid off in the past 2 years.

Refundable tax credits for any starting their own business along with the same medical benefits for their family they would get on medicaid for 2 years.

Tax credits for all businesses buying US made equipment for their use.

Tax credits for hiring US citizens with a larger incentive if they are veterans.

Overhaul of the SEC, & new way of Board nominations for publically held companies.

We aren't reverting to credit cards, though. The heart bypass surgery was moderately successful, so we're eating hamburgers and nachos with cheese. Proper action after a heart attack is diet and exercise-- a lifestyle change. I surely don't see the meaningful change that will help us avoid future busts.


I agree and disagree with Wayne's points. I would like to add that small business needs access to credit and no additional taxation or barriers. While Banco de turbo6bar is in a awfully strong position now, I would be more aggressive if I had access to additional credit. Banks are clammed up really tight right now, so the cash I presently have is more precious. By growing, I would definitely stimulate the economy: by hiring more labor, buying more materials, and converting shabby real estate into gems. By no means am I asking for a bailout. I could use a helping hand instead of the slap on the back of the head.

Also, I believe trade protectionism is the wrong direction to work. Has it not become obvious the world economy is still entwined? If we make dramatic changes in foreign trade, do we not expect feedback?

From what I see, we are still having the heart attack. Some credit metrics have improved from the worst recent levels but overall the financial system still looks under severe stress and not functioning well. And the non financial economy is declining at a rapid rate that, for the sectors I know better, appears to be accelerating - certainly not decelerating.

My feeling too, though some people I respect VERY much support term limits. I want the authority to retain the talented and experienced leaders. Also, I believe term limits are a substitute for having informed voters. I don't really think there is a substitute for that.

Give everyone who has paid their mortgage on time and without fail a 100 thousand dollar deduction on their principal amount. As long as we are giving away money, it might as well go to the people who were good with it.

Note: This will never happen.

Something is wrong when Congress has a 14% approval rating, and the vast majority of them are re-elected.

There are no bigger racketeering enterprizes than government and banking. There is no fix to the problems we are in.

Not only am i a fan of term limits, i would mandate ONE term limits for all politicians and appointees.

+1