[ExI] Economy: "The Big Takeover".

[Lee Corbin]

John K Clark wrote:

> Anyway, at a time like now the last thing on earth you'd want to do is 
> balance the budget. Hoover did it and turned a garden variety recession 
> into a decade long worldwide depression.

Hoover (and FDR) did turn a garden variety recession
into a depression, but they didn't do it by balancing
the budget.

They did it instead as follows. First, Hoover intimidated
companies into not lowering wages and prices. This had
never been done before in America, but then America never
had anyone so intelligent as Herbert Hoover before. No
kidding---high intelligence and its concomitant "can do"
attitude is extremely harmful in government officials.

This ingeniously precluded a short but very sharp recession
such as the country had survived in 1920-21. In fact, during
the latter Hoover swore that if he ever became president,
no recession of that type would ever be allowed. It is one
of the gravest misfortunes of the 20th century that this
was one promise that was kept.

http://books.google.com/books?id=jA9UAZ2fKeoC&pg=PA272&lpg=PA272&dq=%22it+was+clear+that+the+absurd+policy+of+moral+suasion%22&source=bl&ots=oxv4CqsGId&sig=8gWGD3wIpN9lrXS8BEDWCIrZvMo&hl=en&ei=K2bVSau-Eo68tgPXibifCg&sa=X&oi=book_result&ct=result&resnum=1

> And by the way, I wouldn't take anything you read on that website you 
> recommended very seriously, it's full of crackpot conspiracy theories; 
> the man who runs it knows how to type and that's about all I can say.

That doesn't surprise me much. In analyzing what happened
to the budget deficit between 1980 and 2000---attempting
to blame Reagan/BushI for the huge deficits and praise
Bill Clinton (solely) for the greatly reduced deficits,
it is criminal to ignore the costs of the S&L bailouts.

(Which, everyone should know, was caused by two things:
(1) the meddling by the Federal government in ridiculously
guaranteeing $100,000 safety for every depositor no matter
how wily his or her bank/savings&loan got (2) deregulating
most of the restraints on those wily and opportunistic
wheeler-dealers.

Lee

P.S. By the way, that quote above from Murray Rothbard is
typical of the wonderful eye-opening accounts given in
that book "A History of Money and Banking in the United
States".