Recession or Depression?
Good Morning Middle America, you King of Simple News is on the air.
I have a 52 page booklet which remains on my desk top and one that I have read many times from cover to cover. The title is “The Chief Cause Of This And Other Depressions.” The author is Leonard P. Ayres, Vice President of the Cleveland Trust Company.
Mr. Ayres wrote the booklet at the request of Josiah W. Bailey, Senator,
The read is nothing less than astounding, the perspective nothing less than amazing. I won’t bore you with the base content, as only deranged people like me enjoy the nuts and bolts of economics. I will however give you Mr. Ayres synopsis which states that certain guidelines should be adhered to. That is adhered to should the
Operating in a stable and predicable environment is the key to our economic woes. As Mr. Ayres so well stated, “That kind of fundamental stability is the product of the drab and un-dramatic exercise of national integrity and self-restraint.” In other words, we have already failed the first principal.
Following are the points that Mr. Ayers suggests would keep our economy on an even keel. He begins, “It involves persistent adherence to at least seven national policies.”
1. Peace, and the enduring prospect of peace.
2. A sound money in which both our citizens and those of other countries have full confidence.
3. Balanced national budgets.
4. A sound banking system, independent of political influence.
5. The limitation of bank credit to loans fully justified by the demonstrated earning power of the assets on which the loans are based.
6. The restriction of speculation financed by credit.
7. Such negative regulation of business operations as experience may have proved necessary to prevent abuses, dishonest competition, and exploitation, but with a minimum of positive regulation designed to control wage and price competition, or to favor special group interest.
Let’s grade our federal politicians on adherence to these policies. It seems that they have scored an F-, getting none right and creating the exact opposites.
What do you think of Mr. Ayres advice? Seems like he knows what he is talking about to me. It also seems that we wouldn’t be in this terrible predicament if we had followed his guidelines.
Oh, did I tell you that Mr. Ayres wrote his book in 1935? Six years into the longest and most severe depression that this county has ever known.
So then is recession coming? Or is the “D” word rearing its ugly head? I’m going to assume that if you are one of the hundreds of thousands who have lost their jobs and homes in 2007 and 2008, that depression is already a fact of life.
Which of our candidates for President of the
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Seems that many well thought out problems are summarized in 7’s. Robert Hickerson had these seven, listed below, summarizing his prescription for survival in 1995. The link is at the bottom. -bb
1. We will never again be able to get sufficient growth of the economy to eliminate or even markedly reduced unemployment. NAFTA, GATT, and Clinton’s hope of growing the economy to solve unemployment is doomed to failure.
2. The promise of competing in the global economy is a hoax perpetrated upon the working and unemployed people of this country because over time a nation needs to buy and sell overseas in roughly equivalent amounts.
3. All attempts to reduce the deficit, balance the budget or pay off the national debt are futile. The deficit and the national debt represent the subsidy the government has paid in its attempt to keep growth and unemployment at the level of social tolerance.
4. The steady state economy into which we are being inexorably forced implies an interest rate of zero.
5. An interest rate of zero (as Hubbert explains) means the end of the money system. We are being forced to completely rethink our cultural ideas about how to organize our economy and distribute purchasing power.
6. Increasingly desperate means will be used by those who think we can continue to have business as usual.
7. The proposals of Negative Population Growth should be implemented immediately.
http://www.hubbertpeak.com/Hubbert/hubecon.htm
I don’t think any part of this government is trying to create a sound economy.. Everything is profit motivated.. A sound economy is not the way to make the most profits by those who control this country.. I have always thought that profits are the short term goals of this government.. Short term planing causes long term problems.. For instance, wars are a good way to make large profits, for a short time.. For a few anyway.. Wma..
The idea of a steady state economy In Mr. Hickerson’s item number 5 would require an interest rate of zero. Mr. Hickerson notes that, “We are being forced to completely rethink our cultural ideas about how to organize our economy and distribute purchasing power.”
Are we then the first to consider these thoughts? No the Japanese have been rethinking for years and that is the subject of my next article.
WmA,
A blind man on a fast horse can see that our current economic underpinnings are terribly flawed and that is of course the basis of my book.
It is difficult for any country to undo what has been taught as a model for success over the past 200 years. Note items #3 in Mr. Hickerson’s list in the first comment by Billy B.
A complete collapse may be necessary to undo what has been done.