Who was most responsible for averting Great Depression II?

[Kurt_and_Hunter]

Poll question: Who was most responsible for averting Great Depression II?

Accepting, for purpose of argument, that circa 9/08-3/09 the world faced a real chance of slipping into Great Depression II and assuming for the sake of argument that speciffic outcome has been averted...

Which American was most directly and uniquely responsible for averting that outcome?

[fasttense]

1. We haven't averted it, only delayed it. n/t

[MannyGoldstein]

3. +1

[Robb]

4. +0.5

...I halfway agree. :D

It remains to be seen if we're actually out of it or not.

[avaistheone1]

36. True. It is on its way.

No reforms have been put in place. Instead, the banks have received everything they have wanted.
The banks pretty much have a blank check from the taxpayers. Thanks Obama.

[niceypoo]

37. Ding, ding, ding...

...we have a winner.

The conditions that caused it still exist and have been exacerbated. The too big to fail banks got bigger.

[MannyGoldstein]

2. Since Paulson Bailed Out The Banks At The Worst Moment, He Wins

Of course, his policy was the worst one that would do the trick, according to Paul Krugman.

The Obama Administration is simply following his policy.

[Captain Hilts]

5. FDR. nt

[Zynx]

6. Ben Bernanke.

Had he not been as innovative and as willing to break with convention about non-interference in the credit markets, Unemployment would probably be over 30% on the U3 measure.

[HamdenRice]

14. +1000. See post 12.

[Kurt_and_Hunter]

7. And the Oscar goes to...

Any poll vote other than Ben Bernanke seems strange to me.

It's not about whether one likes him or even favors the long-term wisdom or social justice of his actions.

Much of the crisis occurred during a time of political paralysis (election, transition, lame duck, un-staffed new administration, etc.) and Bernanke was the only unfettered actor on the scene, and also the most powerful.

In certain matters having to do with money the Fed Chair is more powerful than the President.

Among other answers, Bush is an ironically good answer because he did nothing... he just accepted what Paulson was telling him and got out of the way. Paulson was a central major player, whether one likes his solutions or not. Geithner was a player both as NY Fed and Sec Treas. Obama and Pelosi had their roles in the stimulus package and one can argue an important role for Obama during the transition and the general hopefulness angle, but for the most part he, like Bush, was following the lead of the Treasury/Fed folks.

[izquierdista]

8. Other

Franklin D. Roosevelt. Glass-Steagall may be gone, but not all of the preventive measures he put in place have been ripped away. All of the rest on the list haven't done a thing to avert another Depression, although the stimulus package may take the rough edge off of it.

[jschurchin]

9. Other

The FASAB. When they approved the suspension of the Mark to Market rule, it allowed the bankrupt financial companies in the US to "magically" appear to be profitable. They suspended the rule in March '09. The market's began their "so called" recovery in......................yep, you guessed it March '09.

So is all the bullshit that caused the meltdown corrected? Nope, not by a long shot. Are we headed for a second Great Depression? Unfortunatly.............YES.

Too much household debt and WAY, WAY, WAY too much National Debt, is the 1,000 pound gorilla in the room. Sooner or later the Major financial institutions are going to have to account for the garbage MBS's in their portfolios, and when that day comes, WE ARE FUCKED.

[Kurt_and_Hunter]

13. FASAB observation is very sharp. I don't get the debt angle, though.

I don't see national debt as a primary problem. It can certainly become a crisis if we don't experience much GDP growth in the next decade. That would make the debt impossible to reduce or even slow the growth of.

But a decade of stagnation would have many, many bad effects beyond the debt, so I would say that stagnant growth is more the problem than the debt that is in large part merely symptomatic of economic conditions.

Same with household debt. With a decade of wage growth that (manageable) problem would fade considerably. With stagnant wages, no inflation and a new-normal of 7% unemployment as the "good" news the household debt situation will become killing but that seems, to me, to be more a symptom of the broader problem of a bad, as possibly long-term crippled, labor market.

[jschurchin]

29. I see the debt as

stifling, any type of growth Kurt. The banks right now are sitting on boatloads of cash, thanks to the FED's 0% interest, but they are not willing to loan it. They are afraid of the coming CRE crisis, and the default's that are sure to follow. Dubai, was just the tip of a very large problem with Commercial Real Estate.

Massive amounts of loans(debt) were made to finance commercial ventures through out the US and the world. Too many of these are beginning to default. They were all repackaged and sold as CDS's and MBS's and they are STILL being valued at par. This is a massive problem, on a global scale. There are a couple institutions, such as UBS, who are still writing down the value of their assets to reflect the TRUE value of their holdings, however, every American institution is still betting that the American taxpayer will bail them out.

Until the financial institutions in America properly recognize this problem with unrecoverable debt, growth will not occur. Borrowing money from our grandchildren to finance "growth" today isn't growth at all. Sooner or later we have to pay the piper, personally, I would rather do it now.

[Kurt_and_Hunter]

33. Okay. I was reading national debt as government debt... THE national debt

Yes, there will be substansial CRE melt-downs going forward.

[sandnsea]

10. Tim Geithner unraveled the depths of the problem

And has been instructing the course of action all along. Contrary to "common wisdom", his concern has always been the possibility of a depression and its affect on working families. Allowing Bear Stearns to fail was also intended to send a message to investment banks that they needed to stop taking such enormous risks with the financial system.

``Absent a forceful policy response, the consequences would be lower incomes for working families, higher borrowing costs for housing, education and the expenses of everyday life, lower value of retirement savings, and rising unemployment,'' said Geithner.

http://www.bloomberg.com/apps/news?pid=20601087&sid=asvwnLeUqWBk&refer=home

[Speck Tater]

11. Other: We didn't avert it. We're still in the early stages. nt

[HamdenRice]

12. Ben Bernanke. It's not popular to say it around here, but it's true

Talk about the right guy in the right place at the right time. He had studied the Great Depression and how to avoid it his whole life. The role of the Fed makes TARP and everything else the federal government did pale in comparison.

The Fed basically became the nation's bank, lending almost directly to consumers, businesses, car purchasers, student borrowers, for the first time since the Great Depression, as well as to other central banks around the world -- although much of it was hidden behind smoke and mirrors.

How the fuck Bernanke came to be appointed by Bush in the first place is the biggest mystery of the decade. Contrary to urban legend, he was not a "bankster," did not work for Goldman, and was a middle class kid who grew up to become a professor.

Second place goes to Obama for the stimulus.

Third goes to Barney Frank for turning Paulson's one page TARP proposal into a responsible 100 page bill that not only saved the financial system, but is on course to make money for the taxpayer.

Fourth place goes to British Prime Minister Gordon Brown. When he partially nationalized British banks, it gave the idea and courage to Paulson to invest in preferred shares and warrants of banks rather than buy their assets. That was the key to both saving the system and making sure the taxpayers would get their money back.

[Kurt_and_Hunter]

15. I put Gordon Brown high up also. (That's why I limited it to Americans--too confusing)

[Captain Hilts]

22. Yes, GoBro doesn't get enough dap for his reaction to the financial collapse. nt

[HamdenRice]

30. Dap? Roflmao!!!

I haven't heard that term in a long time. "A round of dap for the brothers! For the brothers a round of dap" we used to say while high fiving!

[Captain Hilts]

34. I learned it from Michael Wilbon and Tony Kornheiser.

Yeah, funny coming from a white girl.

[nevergiveup]

16. The American voter

Unless one thinks another big tax break for the rich would have averted "Great Depression II" the voters got it right Nov. 2008. There is still a long way to go and because of the severity of the economic meltdown it is going to be slow going but we have bottomed and the recovery has begun.

[Lyric]

17. Has it been averted?

Or just put off for a bit longer?

[Kurt_and_Hunter]

18. Probably yes... replaced with a less dramatic future of stagnation & low wages/employment

A global deflationary spiral that acts like a positive feedback loop and makes all assets near worthless and all outstanding debt un-payable almost by definition seems to have been averted.

But the future we face is probably horrible... just stretched out.

[treestar]

19. It was mcCain, silly, when he suspended his campaign!

:rofl:

[Kurt_and_Hunter]

20. D'oh! I forgot about that. You're quite right.

[ShortnFiery]

21. We haven't yet. Many "unemployed" are living it ... Only the ultra-wealthy have escaped it. eom

[PBS Poll-435]

23. Other - The Average American

[Kurt_and_Hunter]

24. Actually, the average American did the least to avert a depression (after banks)

The cumulative rational decisions of banks to not lend in an environment where the world economy is teetering on the edge (I wouldn't lend in such an environment either) was part of the problem.


Similarly, the cumulative rational actions of the public were part of the problem, not the solution.

It's not their (our) fault. Just what it is.

"Things are economically scary and jobs are scarce so I better not spend any money."

Perfectly rational view.

But if everyone does it the economy stops dead in its tracks.

The reason the government needed emergency deficit spending was to make up for the fact that the Average American was not spending.

Again, not their (our) fault, but it's odd to credit the solution to the entity whose expected behavior was what a big part of what was being combated.

[PBS Poll-435]

32. Consumer spending was more than proportional to other economic activity

Consumers also buy homes and cars and Chick-Fil-A,



Year over year automotive sales numbers for November are very nice.

[Kurt_and_Hunter]

35. Personal consumption cratered in the poll's narrow time-window

I was only talking about roughly 9/08-3/09.

And we will have very strong YoY numbers for a while, since we are now getting into comparisons comparing a weakish but functioning economy (today) to a no-loan/no-spend crisis economy of last winter.

At this point in time the consumer is doing as well as can be expected in a crisis-level labor market. And were E-Z consumer credit available I don't doubt they (we) would spend even more.

(I will fess up. I didn't spend squat last winter and I have never resumed spending... largely due to being broke. So I am very much part of the problem.)

[salguine]

25. This is an extraordinarily bogus "poll".

[Kurt_and_Hunter]

26. Any particular reason?

[DJ13]

27. The same problems still exist

No regulations on banks that are TBTF, and in fact thanks to the economic teams from both Bush and Obama are now even bigger.

But their debts are still there, the FASB has allowed them to now keep them off the books giving a false image of health.

We havent averted anything yet, its still there.

[abelenkpe]

28. You think it's been averted?

I think it's too early to make such a proclamation.

[Kurt_and_Hunter]

31. Hence the several caveats in the phrasing of the poll

The proposition is put forward as an assumption made for the sake of argument.

That said, I do think great depression II has been averted in the sense of a global deflationary spiral and replaced with a grinding, generation-long stagnation that will have just enough counter-trend bright spots to distract from what's going on.

[Odin2005]

38. Ben Barnanke. No Question.