The U.S. Economy Remains Mired In A Long-term Slump

[Crewleader]

By: Mike_Whitney

"We have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand." John Maynard Keynes

Black Tuesday. On October 29, 1929, the stock market crashed triggering the worst economic collapse in history, the Great Depression. Thousands of banks and businesses failed, shanty towns sprung up across the country, and 15 million Americans (25% of the workforce) lost their jobs. President Herbert Hoover, who believed the turmoil would be over in a matter of weeks, opposed providing aid to the needy and unemployed. He supported the same policies as his GOP heirs in Congress today who seek to deepen the present crisis by cutting unemployment benefits, slashing fiscal stimulus and balancing the budget on the backs of workers.

The Hoover Doctrine was summed up by Treasury Secretary Andrew Mellon who famously said, "Liquidate labor, liquidate stocks, liquidate real estate...purge the rottenness out of the system." Mellon's views prevailed and by July 8, 1932, the Dow Jones Industrial Average had fallen to 41 points (an 89 percent drop from its peak in 1929) while the economy sunk into a decade-long slump.

Before the crash, stock prices had been propped up by massive amounts of margin debt that melted away in a deflationary inferno when the panic selloff began in late October. The calamity took down 4,000 banks and left the broader economy in ruins. John Kenneth Galbraith summed it up like this in his masterpiece "The Great Crash: 1929":

http://www.marketoracle.co.uk/Article29021.html

[Sarah Ibarruri]

1. 1) There are no jobs. They're in China. 2) Therefore this country has no $

There are other problems causing this, but that's a HUGE, HUGE, HUGE one, and nobody is discussing this in govt. The jobs have to be brought back. Do away with the free trade agreements, or use another technique, but bring the jobs back here again. We have no business buying products manufactured by others. Every frikkin' thing I see for sale is manufactured in China. I'm sick to my stomach of my money going to that. Burns me up that I can't buy things manufactured here.

[The Big Vetolski]

6. Do you know who you just agreed with 100%?

Ralph Nader. :rofl:

[Sarah Ibarruri]

7. I guess we both go to toilets to take a crap too, but I still think he's a pig

He subjected this country to 8 years of a fascist regime. Regardless of whether I agree with him on 1 out of a million issues, he's still a pig, and will remain a pig. His legacy is done.

[kelly1mm]

8. You do know that 5 times as many Democrats in FL voted for Bush than

the total number of votes Nader got in the state, right? Shouldn't you blame FL Democrats rather than Nader?

[Sarah Ibarruri]

9. The election was tight, but Nader ADMITTED he didn't care if the Democrats lost and in fact

he was glad.

He made damned sure the election, which was already tight, got tighter. He practically told the Democrats to screw off. Well, guess what? I AM A DEMOCRAT.

Nader is a piece of shit.

[kelly1mm]

11. Nader may well be a piece of shit but to blame him for Bush ignores

the fact that if FL Democrats would have voted for the Democratic candidate, Gore would have won. Democrats voted for Bush in FL in numbers FIVE TIMES NADERS TOTAL VOTES! Democrats did that, not Nader, not Nader voters, not Repubs, Democrats.

The reason to keep bringing this up is not self flagilation, but rather to stop blaming a boogyman (Nader) for the Bush years and instead concentrate on GOTV and, hopefully, party discipline in the future.

[clixtox]

12. Ralph Nader is an American(USA) hero!

Particularly among those intelligent folks who are able to think for themselves.

Anyone now who resurrects the totally discredited canard about Nader somehow being responsible for Dole's abysmal campaign and post election meltdown, or the 8 year Bushwacking of the USA, is a tool of the Democratic/Republican political party duopoly.

Of course they could individually just be unable to process all of the readily available information that debunks this persistent myth conclusively.

Can you think of another reason this B.S keeps being brought up, especially now, over 10 years later!

[jul61252]

13. ^this

[dissidentboomer]

14. I agree with this but....

there are other factors at work and this "depression" has been about 30 years in the making. Free trade agreements have played a role and income for all but the top 1 percent, or so, has risen, at most, about 70 percent in real terms since 1980 while inflation since 1980 has been about 200 percent. Income for the top 1 percent has risen about 300 percent in real terms while their tax rates have decreased over that period. Tax rates for everyone else have increased. The de-regulation of many things has played a role but, most notably, for banking and the finance industry - helping create an economy based on finance and not on "making things". Exacerbating things now are production and goods based on oil, gas, and petrochemicals that are becoming harder to find and refine and more expensive, which is driving and will continue to drive some inflation and help accelerate the shrinking of the middle class.

I'm not even sure where to start and, while some in this administration and the congress have ideas, we can't even "get off the dime" on several of these huge issues because ignorance (willful or otherwise), greed, the politics of fear, superstition, bread and circuses, a distorted campaign finance and political system, etc., stonewall any attempts at progress.

[FreakinDJ]

2. US Economy suffers from too many RATpubliCONs in office

[Kurmudgeon]

3. Crashed economies, the traditional right wing gift, along with proxy wars.

[dkf]

4. This one is worse because it's a housing bubble where the entire population got caught up in

Speculation. Moreover a lot of the jobs created the product for this bubble.

If you have a bubble in the stock markets, that doesn't directly affect everyone. But all people need shelter so everyone has been affected by this.

[xchrom]

5. Recommend

[jtuck004]

10. K&R From the article - Neither the Obama administration nor Congress believe...

that the government can play a constructive role in easing the business cycle or reducing unemployment."

____________________________

And there's the ongoing tragedy, because while the answer is clearly investment of our own dollars in the country and people to create demand, they are ignoring the lessons of the past. Which still leaves us with 20+ million of our neighbors unemployed, underemployed, or disheartened, 44 million who suffer from hunger without assistance, and a third never paid enough to have anything other than Social Security between them and abject poverty by 65.

[roamer65]

15. No worries...we'll be starting World War III very soon.

Orwell was right.