19th March 2010, 8:31 AM
Quote:Calvin Coolidge's attitude of indifference towards big business matters certainly is not the way to go (he's more to blame for the Great Depression than Herbert Hoover, really, though Hoover was still a failure of a president)
Laissez-faire economics haven't really existed in over a hundred years. The Sherman Anti-Trust act clubbed most of that to death. It was long-dead by the 20s, though we have this illusion that 'big business' caused it for some reason. It's ridiculous. The Great Depression was caused by stock being traded on a massive scale on a foundation that was entirely unsupportable. It was the stock traders and banks who caused it. It was the banks loaning out nearly unlimited amounts of credit under the assumption that they could print all the money they wanted without consequence, and people who didn't understand that buying a volatile commodity almost entirely on credit is an extremely awful idea when your plan to pay the bill for the commodity is by assuming your commodity will explode in value and you can sell it at a profit. It's gambling, plain and simple. Corporate business had almost nothing to do with it then besides issuing the stock (which was, in itself, not a problem), just as it has, in general, very little to do with the current recession. Our ills are basically the same as our grandparents': The volatile commodity is now real estate instead of stocks, but everyone was still buying most of it on credit they couldn't hope to repay under normal circumstances. They were gambling their futures on property because property was, for awhile, a bull market and too many people made the stupid assumption that the market couldn't possibly collapse under its own weight before they made their profit and got out. Also to blame, again, are the banks for lacking the long-term vision to see that giving mortgages to everyone could ever cause significant problems, and the Federal Reserve for letting the banks do this.
But, that's the bitch about regulation: Most of the time, the horse has already bolted the proverbial stall. The greater bitch about government regulation is that the government is engaged in the exact same game. That National Debt thing you keep hearing about? That's our government mortgaging the economic future of our nation on credit that, presently, we don't seem able to repay, while coming out with ever more elaborate and expensive spending programs and nobody is at all concerned with accounting for what is being spent or how much is being spent. It's rapidly getting to the point where taxes are going to have to be raised to crushing levels just to keep the United States solvent against our Chinese creditors. But, no one wants to pay more taxes and it seems as though everyone wants the government to give us everything.
We're on the road to financial catastrophe--the whole world, not just the U.S.--if we don't have a lot of people in charge suddenly wise up.
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