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Gayle in MD
10-10-2009, 07:12 PM
<span style="color: #000066">And, why Obama has managed to prevent the Bush Depression, as Republicans whined and cried, yapped and mislead, noped and poked, and the government hating "socialist!" accusations from the nitwits who yapped against their government involvement, ( wha wha wha!)Obama, turned things back in the right direction, nevertheless. </span>

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Why There Was No Depression

By Robert J. Samuelson
Monday, October 5, 2009

How close did we come to the Great Depression 2.0? That question will spawn a cottage industry of books, studies and conferences. But Christina Romer, the head of President Obama's Council of Economic Advisers, already has an answer: pretty darn close. Her conclusion deserves attention because Romer, in her previous academic career, was a scholar of the Great Depression.

"Depression" is a term of art. It's more than a serious economic downturn. What distinguishes a depression from a harsh recession is paralyzing fear of the unknown -- so great that it causes consumers, businesses and investors to retreat and panic. They hoard cash and desperately curtail spending. They sell stocks and other assets. A devastating loss of confidence inspires behavior that overwhelms the normal self-correcting mechanisms (lower interest rates, inventory resupply, cheap prices) that usually prevent a recession from becoming deep and prolonged: a depression.

Comparing 1929 with 2007-09, Romer finds the initial blow to confidence far greater now than then. True, stock prices fell a third from September to December of 1929; but fewer Americans then owned stocks, and prices had risen early in the year. Moreover, home prices barely dropped. From December 1928 to December 1929, total household wealth declined only 3 percent. By contrast, the loss in household wealth between December 2007 and December 2008 was 17 percent -- more than five times as large. Both stocks and homes, more widely held, suffered larger losses.

Thus traumatized, the economy might have gone into a free fall ending in depression. Indeed, it did go into a free fall. The anniversary of Lehman Brothers' bankruptcy in mid-September inspired much commentary that saving the investment bank wouldn't have averted the crisis. Too many other lenders held bad loans. True. But allowing Lehman to fail almost certainly made the crisis worse. By creating more unknowns -- which companies would be rescued, how much were "toxic" securities worth? -- Lehman's bankruptcy converted normal anxieties into extreme fears that triggered panic.

As credit markets froze, stock prices collapsed. <span style='font-size: 17pt'>By year-end, the Dow Jones industrial average was down 23 percent from its pre-Lehman level and 34 percent from a year earlier. </span><span style='font-size: 17pt'>Financial panic poisoned popular psychology.</span> In September 2008, the Conference Board's index of consumer confidence was 61.4. By February, it was 25.3. Shoppers recoiled from buying cars, appliances and other big-ticket items. Spending on such "durables" dropped at a 12 percent annual rate in 2008's third quarter and at a 20 percent rate in the fourth. With a slight lag, businesses canned investment projects; that spending fell at a 20 percent rate in the fourth quarter and a 39 percent rate in 2009's first quarter.
<span style='font-size: 17pt'>
That these huge declines didn't lead to depression mainly reflects, as Romer argues, countervailing government actions. Private markets for goods, services, labor and securities do mostly self-correct; but panic, driven by the acute fear of the unknown, feeds on itself and disarms these stabilizing tendencies. In this situation, only government can protect the economy as a whole, because most individuals and companies are involved in the self-defeating behavior of self-protection. </span>
Government's failure to perform this role in the early 1930s transformed recession into depression. <span style='font-size: 17pt'>That changed when newly inaugurated Franklin Roosevelt closed all banks on March 5, 1933. Many were already shut, having suffered massive withdrawals by terrified depositors who feared their funds would be lost. Yet when banks reopened in mid-month, Americans redeposited most of that money. The reason was not just Roosevelt's first calming fireside chat ("It is safer to keep your money in a reopened bank than under the mattress"), argues a study by economist William Silber of New York University. FDR's pledge was credible because the Federal Reserve was authorized to supply currency to any reopened bank equal to 100 percent of its deposits. </span>
Something analogous happened over the past year. Scholars will debate which interventions -- the Federal Reserve propping up a failing credit system, the Troubled Assets Relief Program, Obama's "stimulus" plan and bank "stress test" -- counted most. Regardless, they all aimed to reassure people that the free fall would stop and thereby curb the fear perpetuating the free fall. <span style='font-size: 17pt'>Confidence had to be restored so the economy's normal recovery mechanisms could operate. </span>This seems to have happened. By last month, the consumer confidence index had rebounded to 53.1. Housing prices had stopped falling. By the Case-Shiller index, they've increased for three months.

But this improved confidence is not optimism. It is the absence of terror. The consumer sentiment index is still weak. Unemployment (9.8 percent) is abysmal, the recovery's strength unclear. Here, too, there is an echo from the 1930s. Despite bottoming in 1933, the Depression didn't really end until World War II. Government didn't ensure recovery. Some policies helped, some hurt. The good news today is simply that the bad news is not worse.



</div></div>

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/04/AR2009100401741.html

pooltchr
10-10-2009, 07:49 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gayle in MD</div><div class="ubbcode-body"> .

<span style='font-size: 20pt'>But this improved confidence is not optimism. It is the absence of terror. The consumer sentiment index is still weak. Unemployment (9.8 percent) is abysmal, the recovery's strength unclear. Here, too, there is an echo from the 1930s. Despite bottoming in 1933, the Depression didn't really end until World War II.<span style="color: #FF0000"> Government didn't ensure recovery. </span>Some policies helped, some hurt. The good news today is simply that the bad news is not worse.</span>



</div></div>

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/04/AR2009100401741.html [/quote]

Odd that you didn't take the summary paragraph and print it in a larger font. But being the nice guy I am, I did it for you.
Steve

Sev
10-10-2009, 08:08 PM
Many argue that government interference actually extended the great depression.

This economy is still in decline after both the Bush Stimulus and after the 230 billion that has been released into the economy by the Obama stimulus.

Not much happening out there.

Lots of banks failing.
The big 3 are heading towards trouble due to the failure of Cash for Clunkers.
Taxes are being raised in many or the states to make up for lost revenue which is causing more layoffs and business failures.

Oh yes its bright sunny day out there.

wolfdancer
10-10-2009, 08:30 PM
and many more credit the policies of FRD, after the do nothing admin of Hoover.
And you now claim it was the cash for clunkers failure that caused the auto industry problems?
I'm shocked really that neither one of you nit-pickers did not pick up on the double negative in Gayle's post

Sev
10-10-2009, 08:45 PM
When was the last time you had your reading comprehension checked???

wolfdancer
10-10-2009, 10:19 PM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Many argue that government interference actually extended the great depression. </div></div>
My reply....many credit FDR's policy in pulling us out of the depression.
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The big 3 are heading towards trouble due to the failure of Cash for Clunkers. </div></div>
I figured that they were already in trouble; your post seems to suggest that President Obama's failed policy is the cause
I'm sure that you could have sold that over on the AZbobblehead board, but......

Gayle in MD
10-11-2009, 06:48 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: wolfdancer</div><div class="ubbcode-body"> <div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Many argue that government interference actually extended the great depression. </div></div>
My reply....many credit FDR's policy in pulling us out of the depression.
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The big 3 are heading towards trouble due to the failure of Cash for Clunkers. </div></div>
I figured that they were already in trouble; your post seems to suggest that President Obama's failed policy is the cause
I'm sure that you could have sold that over on the AZbobblehead board, but...... </div></div>

They clutch to their twisted RW Fox/Limpballs/Beck?REagan/Bush/Bush propaganda at a time when the disastrous results are there for all to see.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> <span style='font-size: 20pt'>In his review of government institutions that prevented a second Depression ["Why There Was No Depression," op-ed, Oct. 5], Robert J. Samuelson omitted one key institution: the Federal Deposit Insurance Corp. Were it not for the FDIC's guarantee of bank deposits, a run on banks similar to that of the Great Depression might have occurred.

Interestingly, the FDIC was the brainchild of Republican Sen. Arthur Vandenberg of Michigan. In the days before Barry Goldwater and Ronald Reagan, conservatives did not always subscribe to the belief that government was the problem. </span>
</div></div>

The facts are the facts, unless you're a RW Nutcase, that is. We know who they are.

pooltchr
10-11-2009, 07:49 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: wolfdancer</div><div class="ubbcode-body">I'm shocked really that neither one of you nit-pickers did not pick up on the double negative in Gayle's post </div></div>

I was going to be nice and not mention it. You are the first to actually say something about it.

Steve

Gayle in MD
10-12-2009, 06:57 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: pooltchr</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: wolfdancer</div><div class="ubbcode-body">I'm shocked really that neither one of you nit-pickers did not pick up on the double negative in Gayle's post </div></div>

I was going to be nice and not mention it. You are the first to actually say something about it.

Steve </div></div>


<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">I guess it must me the intellectual way of handling things.



Steve


</div></div>

wolfdancer
10-12-2009, 07:02 PM
I couldn't find it in my heart to point out another gaff on his part....thar's been so many....

Gayle in MD
10-16-2009, 11:53 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: wolfdancer</div><div class="ubbcode-body"> <div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Many argue that government interference actually extended the great depression. </div></div>
My reply....many credit FDR's policy in pulling us out of the depression.
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The big 3 are heading towards trouble due to the failure of Cash for Clunkers. </div></div>
I figured that they were already in trouble; your post seems to suggest that President Obama's failed policy is the cause
I'm sure that you could have sold that over on the AZbobblehead board, but...... </div></div>


Wolf,
Given how damn long we have had all the information out there on how this mess came about, reading some posts on here really does make me laugh.


<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Bachmann repeats Beck's lie and expands on it:

Bachmann: Well, it's stunning, Glenn. Just as you said, the Community Reinvestment Act is a creation of the federal government forcing private banks to make home mortgages to people who are very poor credit risks. No banks wants to do that. So the federal government in effect threatens banks and says, we're going to close down your interstate bank or we won't let you expand unless you make these bad loans to people or make loans that are unlikely to be repaid. Well, why would a bank want to do that?

<span style='font-size: 17pt'>who does that sound like? </span>

Bachmann is outraged, outraged we tell you, that banks have been able to partner with ACORN in making loans to minority families (ACORN plays the role of guarantor, which actually means the loans aren't high-risk). But as Mary Kane at the Windy notes, the entire objection rests entirely on the grounds that ACORN is supposedly a proven evil and corrupt organization -- which has hardly, in fact, been proven. Unless by "evil" you mean "highly effective at getting minority voters to the polls." Which is clearly the case for Bachmann and the Turnip.

Moreover, the claim that the CRA caused the subprime meltdown is pure right-wing garbage. As FDIC chairman Sheila Bair explained:
<span style='font-size: 17pt'>
Point of fact: Only about one-in-four higher-priced first mortgage loans were made by CRA-covered banks during the hey-day years of subprime mortgage lending (2004-2006). The rest were made by private independent mortgage companies and large bank affiliates not covered by CRA rules.

You've heard the line of attack: The government told banks they had to make loans to people who were bad credit risks, and who could not afford to repay, just to prove that they were making loans to low- and moderate-income people.

Let me ask you: where in the CRA does it say: make loans to people who can't afford to repay? No-where! And the fact is, the lending practices that are causing problems today were driven by a desire for market share and revenue growth ... pure and simple.

And as Aaron Pressman at BusinessWeek pointed out, the independent mortgage companies who were the chief offenders in the subprime meltdown were in fact never subject to the CRA.

University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations.

Well, facts and reality have never made much of an impression on the Planet Wingnuttia domiciles of Bachmann and Beck. But isn't it funny how they focus so much energy on attacking programs that benefit minorities? Hmmmmmm.</span> </div></div>

/forums/images/%%GRAEMLIN_URL%%/crazy.gif

LWW
10-16-2009, 12:31 PM
The reason we couldn't have done nothing is we have a moonbat crazy congress and an electorate which is politically ignorant.

LWW

pooltchr
10-16-2009, 12:45 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Gayle in MD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: wolfdancer</div><div class="ubbcode-body"> <div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Many argue that government interference actually extended the great depression. </div></div>
My reply....many credit FDR's policy in pulling us out of the depression.
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">The big 3 are heading towards trouble due to the failure of Cash for Clunkers. </div></div>
I figured that they were already in trouble; your post seems to suggest that President Obama's failed policy is the cause
I'm sure that you could have sold that over on the AZbobblehead board, but...... </div></div>


Wolf,
Given how damn long we have had all the information out there on how this mess came about, reading some posts on here really does make me laugh.


<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Bachmann repeats Beck's lie and expands on it:

Bachmann: Well, it's stunning, Glenn. Just as you said, the Community Reinvestment Act is a creation of the federal government forcing private banks to make home mortgages to people who are very poor credit risks. No banks wants to do that. So the federal government in effect threatens banks and says, we're going to close down your interstate bank or we won't let you expand unless you make these bad loans to people or make loans that are unlikely to be repaid. Well, why would a bank want to do that?

<span style='font-size: 17pt'>who does that sound like? </span>

Bachmann is outraged, outraged we tell you, that banks have been able to partner with ACORN in making loans to minority families (ACORN plays the role of guarantor, which actually means the loans aren't high-risk). But as Mary Kane at the Windy notes, the entire objection rests entirely on the grounds that ACORN is supposedly a proven evil and corrupt organization -- which has hardly, in fact, been proven. Unless by "evil" you mean "highly effective at getting minority voters to the polls." Which is clearly the case for Bachmann and the Turnip.

Moreover, the claim that the CRA caused the subprime meltdown is pure right-wing garbage. As FDIC chairman Sheila Bair explained:
<span style='font-size: 17pt'>
Point of fact: Only about one-in-four higher-priced first mortgage loans were made by CRA-covered banks during the hey-day years of subprime mortgage lending (2004-2006). The rest were made by private independent mortgage companies and large bank affiliates not covered by CRA rules.

You've heard the line of attack: The government told banks they had to make loans to people who were bad credit risks, and who could not afford to repay, just to prove that they were making loans to low- and moderate-income people.

Let me ask you: where in the CRA does it say: make loans to people who can't afford to repay? No-where! And the fact is, the lending practices that are causing problems today were driven by a desire for market share and revenue growth ... pure and simple.

And as Aaron Pressman at BusinessWeek pointed out, the independent mortgage companies who were the chief offenders in the subprime meltdown were in fact never subject to the CRA.

University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations.

Well, facts and reality have never made much of an impression on the Planet Wingnuttia domiciles of Bachmann and Beck. But isn't it funny how they focus so much energy on attacking programs that benefit minorities? Hmmmmmm.</span> </div></div>

/forums/images/%%GRAEMLIN_URL%%/crazy.gif </div></div>

<span style='font-size: 23pt'>It is now official. You have been totally and completely brainwashed by the Dems.
RIP!</span>
Steve

bradb
10-16-2009, 03:15 PM
Amen Pooltchr.

The truth is twisted, and reshaped into a leftist agenda of socialist utopia, fueled by an unappolegetic media and cannot stand up under time and application.

As a conservative I am certainly not happy with Bush did to our party. His flawed plans gave the far left an excuse to commandeer the democratic party and set our country headlong down a reckless path of socialism that has put us on the same course as post war european Marxism.

Is that really where we want to go?

Yes, we need a safety net for the aged... a viable health care plan for the poor, but at what price? To do so unchallenged, unplanned and in a frenzied state of leftist ideology could destroy the American dream of a free republic we have held since 1776. That dream may be flawed... but will a centralized, all powerful goverment running every aspect of our lives be the answer?

Brad

wolfdancer
10-16-2009, 03:30 PM
Against my better judgment, I read what turned out to be a pathetic reply to your post. Some lame brained " your mother wears army boots" type insult...,with nothing, nada , no facts, to support it....and laughably to make it even more "impressive",
or....maybe to give it more credibility ???? it was in extree large font size.
This might herald a new way for people here, without a clue, to get their brain farts accepted as reality.....large, and bold fonts.
I expect we'll begin seeing the gang of (now) six? Try to outdo each other, to see who has the biggest font size

pooltchr
10-16-2009, 03:39 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: wolfdancer</div><div class="ubbcode-body">....and laughably to make it even more "impressive",
or....maybe to give it more credibility ???? it was in extree large font size.
This might herald a new way for people here, without a clue, to get their brain farts accepted as reality.....large, and bold fonts.
</div></div>

I totally agree. I believe q-tip was the one who started this little trick, and Gayle has now picked up on it. I thought maybe in her old age, her eyesight was starting to go, and it might make it easier for her to read.

But I'm glad you picked up on that...although making comments like that about Q and G are surprising, coming from you.

Steve