Since "they got this depression on", I'm reading The Forgotten Man: A New History of the Great Depression by Amity Shlaes. The title comes from an 1883 essay of the same title by Yale professor and sociologist William Graham Sumner. Quoting:
"The type and formula of most schemes of philanthropy or humanitarianism is this:
A and B put their heads together to decide what C shall be made to do for D. The radical vice of all these schemes, from a sociological point of view, is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C's interests, are entirely overlooked. I call C the Forgotten Man."
In other words, when things look bad for somebody, you can count on two other people getting together to solve it and stick someone else with the bill.
The book was originally published in 2007 and predating the sudden "crisis" of 2008 so there is no taint of foreknowledge. So it is amazing at the similarities not just in the events, but also in the political situation and the personalities of the people involved.
In particular, the comparisons between Hoover and Bush are very interesting. Both brought "firsts" to the presidency. Hoover was the first trained engineer and Bush the first MBA - which means both were men of their times. Both men carried ideologies that were heavily colored by deeply held religious beliefs. And both were Republicans who did not hold to Conservative principles.
I'll be sharing more on this book over the next several posts, but it in the meantime, consider that it is interesting that Ben Bernake, who, along with Henry Paulson, is in charge of central planning for the US economy right now, said in his remarks on Milton Friedman's 90th birthday regarding the Federal Reserve's role in making an ordinary recession in the late 20's into the Great Depression: "You're right. We did it. We're very sorry." Ummmm......
Ready... Fire... Aim...
We should all be a lot less worried about the US economy weathering down cycles than I am about the government stepping in to try to "fix" it.
I think it is curious that the financial crisis suddenly erupted six weeks before the Nov 2008 election and then it was necessary for a bunch of politicians to "solve" a complex situation years in the making over a long weekend with little to no input from actual economists - who clearly opposed it - saying basically - "We're not sure what the right answer is, but this is definitely NOT it."
