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Not doomed to repeat. As FDR took office.

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No Elephants Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Nov-02-12 07:49 AM
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Not doomed to repeat. As FDR took office.
Sources for the following are the three wikis on FDR, the Great Depression and the New Deal, along with some of the information I have picked up along the way, but I did not flat out copy any of it. Hence, no block quote.

FDR was inaugurated (for the first time) on March 4, 1933. A month earlier, he had escaped an assassination attempt. And, of course, he had been crippled by polio, although he had taught himself to appear to be walking.

Then, as was the case in 2008, Wall Street greed had been the culprit.

There were no state or federal securities laws, so people had been able to to sell investors "everything but the clear blue sky" until the market crash of October, 1929. And they did. (State securities laws enacted after the market collapse of 1929 would be nicknamed "Blue Sky laws.") (Ben Bernanke and others have a somewhat different view of what caused the collapse.)

Reverberations from the crash emanated from lower Manhattan reached many other nations, much as they did after the collapse of 2008. No one investigated bankrupt companies to see if the people running the company had been honest with investors or if their enriching themselves and their friends unlawfully had bankrupted the company.
There was no such thing as the Federal Deposit Insurance Corporation. So, when banks failed, depositors were simply SOL. And totally SOL, because no social safety net existed either, at least not at the federal level.

In 1929, of course, manufacturing in the U.S. was more important part of the U.S. economy than it was in 2008. Between 1929 ahd 1933, though, manufacturing output in the U.S. had decreased by one third. One third in only four years. Mind boggling.

During those same four years, U.S. unemployed had increased from 4% to 25%. (Methods of reporting unemployment were different then. They have been changed by various administrations since to make unemployment numbers look better. So, I don't really know how to compare that 25% with today's figures.)

The unemployment number was even higher than 25% in major industrial and mining centers. Farm income had fallen by between 50% and 60%. Unemployment in the U.S. rose to 25%, and in some countries rose as high as 33%.

Moreover, one-third of all employed persons who had been working full time had begun working part time instead, earning less. In all, almost 50% of the nation's human work-power was not being used. All of that is also mind boggling.

Personal income, tax revenue, profits and prices bad all dropped, of course, and international trade plunged by more than 50%.

During those same four years, prices had fallen by 20%, a deflation that had made repayment of debt difficult. (Somehow, that "price fall" piece of a bad economy no longer seems to happen, does it?) Outstanding debts became harder to repay, because prices and incomes fell by 2050% but the debts remained at the same dollar amount. Bankers desperate to avoid collapse had been calling in loans, but people could not pay.

Out of a total of five million non-farm mortgages that existed nation wide at the time, 844,000 had been foreclosed.(Talk about lack of consumer confidence!)

By the day of FDR's inauguration, every single bank in the nation had been closed by states. Moreover, people did not know if or when the banks would re-open, if ever, or if their money would still be in the bank if and when the banks re-opened.

Not only that, but people, including SCOTUS Justices, thought/assumed/knew that the federal government had little to no power to deal with any of the above. Only individual states had that power, if anyone.

The rich feared that revolution and/or anarchy were imminent. Joseph P. Kennedy, Sr., for example, later stated, "n those days I felt and said I would be willing to part with half of what I had if I could be sure of keeping, under law and order, the other half." Indeed, bank robbers, instead of being seen as villians, were seen as a kind of folk heroes.

Of course, de jure segregation still existed in the South and in the U.S. military and maybe in the federal government, as well as de facto segregation. And prejudice against various immigrant groups was rampant, including by the KKK (and anti-immigration sentiments in recent years have helped resuscitate the KKK and groups like it.)

Welcome to the White House, President Roosevelt.
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Enthusiast Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-03-12 02:27 AM
Response to Original message
1. Well done. I like what Joseph P. Kennedy said.
Edited on Sat Nov-03-12 02:27 AM by Enthusiast
If only the wealthy Wall Street fraudsters felt that way today. Today's fraudsters not only avoided prosecution for their crimes, they were even rewarded.
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No Elephants Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Nov-05-12 02:32 AM
Response to Reply #1
2. I can blame the Wall Street and bank gangsters for a lot, but I cannot blame them
for not feeling scared.

For that, I blame the 99%.

Americans are way too complacent. On the other hand, I am pretty sure the 1% and their thugs would cut us down without a backward glance if we acted up. So, I am torn, to say the least.

We should have started moving as soon as St. Iran Contra Ronnie took over and certainly by the time he fired all the air traffic controllers.

The 1% did divide and conquer too well, though.
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