The Great Depression II

January 18, 2011 05:52

America’s rogue government mercilessly squats atop its otherwise dynamic and productive people, excreting literally tens of thousands of wealth-killing laws and intrusive regulations every year. It is in no position to drag the world out of its current crisis.

By Kirk W. Kelsen at American Thinker


With the TVA, the FDIC, Social Security, and many other capricious “recovery” schemes, Roosevelt’s willy-nilly interference in private business was more responsible than anything else for the Great Depression. The Crash of 1929? Yes, that was extremely serious — almost as serious as the great unraveling that started in September 2008. The Great Depression from 1932 to 1942, however, was Roosevelt’s fault.

The Fed monetary policy under Roosevelt, just as it is now and was during Carter, was an explicitly Keynesian effort to correct unemployment — not a stable-currency policy as Reagan and Margaret Thatcher pursued.

Worldwide, sovereign debt is being serially repudiated. Private institutional buyers are being told that they are going to get a “haircut.” Portugal, Ireland, Italy, Greece, and Spain (the “PIIGS,” ha-ha) are in process of defaulting.

With uncertainty on the rise, China’s ruling class is hedging its dollar exposure by snapping up commodities at a dizzying rate and conducting some international trade in non-dollar currencies. The yuan is already in use as a legitimate world-trade currency because, as with any currency, its underlying value is based on the issuer’s sustained and perceived future productivity. Unsurprisingly, China’s expected productivity is about to rival America’s.

In other words, this is not mysterious, fear-of-fear-itself uncertainty; it is rational uncertainty, uncertainty with a clear and historically informed basis and a known etiology. And with this odd certainty of uncertainty comes the Great Depression II.

The future does not look bright.


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