[extropy-chat] Redistribution of wealth

[BillK]

On Wed, 29 Sep 2004 06:32:57 -0700 (PDT), Mike Lorrey wrote:
> 
> Hoover would not have needed to do anything if he had instead suspended
> the Federal Reserve Act, preferably as early as 1927. What really
> happened was that England had been instituting its welfare state in the
> 1920's, and the tax demands had forced them into over-issuing their
> currency, debasing it, while simultaneously keeping its value tacked to
> the dollar at an improper rate. The British gold and silver stocks were
> drained by consumerism buying US products. Finally, the Brits took
> themselves off the gold standard, their currency collapsed, and they
> begged us to extend them credit to get their house in order. We did,
> but they didn't get their situation straightened out, they just kept
> spending, until US credit markets were maxed out and loans started
> getting called in. Investors needed to liquidate their holdings to pay
> back loans that were called in, and stock prices collapsed.
> 
> If we had not extended the Brits credit under the reserve act, they
> would have still collapsed, but not as badly, and we would not have had
> the great depression, because our own credit markets would have survived.
> 

Heh  :) 
You  have to laugh at Mike's view of economic history seen through US
patriot/libertarian blinkers.

US War Loans to Europe (not just the Brits) were a minor part of the
cause of the US Great Depression.

The main cause was the wild speculation which caused the US Stock
Market collapse and the virtual cessation of industry and employment
in the US.

Another major cause was the greatly unequal distribution of wealth
from the 'Roaring Twenties' in the US  The working class could hardly
afford to live and were buying everything on credit. Wealth was
concentrated in a tiny percentage of the population and a few hundred
very large corporations. The whole setup was very unstable.

There were many other contributory causes also.

A good writeup (by a US writer!) is at:
<http://www.gusmorino.com/pag3/greatdepression/>
There are many, many, other historical analyses available on the net.

BillK