I also have a couple of college degrees, one in political science.  Look at this time line--related to the school of Hard Knocks. 

Before starting school, Wall Street fell.  On the dryfarm in Wyoming, things were already tough--drought, dust storms and low prices for agricultural products.  Too young to understand this by myself, my parents told me we were in a panic and that the country had them before.  My mother tought part of the trouble was because President Wilson allowed the US to exact reparations from Germany after the first World War, which they couldn't pay for.  All I knew was that President Hoover told us prosperity was just around the corner.  Grownups didn't look happy, talked a lot about "Washington." 

When FDR took office in March 1933, there was still no clear promise that banks would stop closing.  People were still taking their money out, which is known as a run on banks.  The first thing Roosevelt did was to call a bank holiday.  My 11-year-old mind saw the worry on my folks' faces and knew it was not a real holiday.  Our bank held and we kept the homestead.  Then we got the Alphabet.  The New Deal started SEC, WPA, AAA (twice because the first time it was declared unconstitutional) and Social Security, among other things.  All the while there was worry that the US would get involved with Europe's new war, and the Army was ill-prepared.  That's the reason FDR also put in the CCC, as well as the NYA for those going to college (LBJ went to school on the NYA).  

In December 1941, the Japanese wiped out our Navy at Pearl Harbor, and the President gave his Day in Infamy speech.  Already, the previous January, he tried to warn us of coming problems when he gave his Four Freedoms speech.  Googling "Four Freedoms" will bring it.  However, at the time it was as important for promoting lend-lease with Russia.  

So we all hunkered down and did our bit during World War II.  The Army's broomsticks were replaced with rifles and planes and a lot of ships, since Germany had sunk so many of the Allies'.  All over the world people were doing something.  Empires were falling.  In the US so many men would be coming back needing to pick up their lives after four years.  Roosevelt advocated the GI bill for housing, education, and hiring benefits for the veterans.  TVA had been built to help make gunpowder and aluminum in the South, as well as the Bomb in Oak Ridge.  On the drawing board for after the war was a new system of Interstate highways.  The UN Commission was in planning stage before FDR's death.  

As the new era came in with Truman for one term and then Eisenhower for two, things got more flush.  There were many jobs because everything needed to be produced.  Automobiles were coming along to go with the new roads, and unions were demanding decent wages for the workers.  We still had the thorny question of civil rights to handle.  That became possible-- in the time of JFK and MLK.  About 40 years ago,  we got off-track with a useless war.  It was during that time that credit cards were pushed to anyone with a mail address.  

Spending for war and having a healthy national economy work against each other.  It's impossible to build bridges and roads when most of the money is  being used to blow things up and to kill people.  (But there I get into my view of what our problem is.) Now that the old-time big banks are cannabalizing each other, we have learned that even they can't keep all the money they want to.  A crisis of confidence, they call it.  

For us oldsters who lived through the Great (sic) Depression, we know how jobs can go, markets can dry up, hope gets dashed.  I remember how my mother dressed frying chickens and took them to town to exchange for salt and sugar.  Selling eggs meant getting 3 cents a dozen, if you could find anyone to buy them.  Our neighbor who was a trucker had to work for such low fees that he was  better off parking his rig. (The Truckers' Association petitioned the government to set national rates, and that is how the Interstate Commerce Commission was strengthened.)  

What have I personally learned?  For one,I don't buy anything I can't pay for on the spot.  Credit cards are handy, but a  balance left over is a shafting.  For another, I learned I would get old and couldn't work, so I saved, then invested those savings.  When the stock market got iffy I started to shift from equities to bonds.  Fortunate that I did.  I still have a little money in a mutual fund which a hedge fund raided.  It's my way of learning what is going on.  Many of my friends are Boomers.  That gives me a way of relating to them when they tell about their 401Ks.  

by Margaret Bassett (45 articles, 2910 quicklinks, 43 diaries, 1854 comments [99 recommended, 0 rejected]) on Sunday, Oct 5, 2008 at 2:36:47 PM

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We have had an economic crisis for years. That tends to happen when you borrow, spend, and give away, $10 trillion. Washington is just figuring this out? They say that the way to fix it is to give away $700 billion more?

What happened to that $700 billion, anyway. This was such an emergency need that surely they must have used a large chunk of it by now in addition to the $400 billion that the Fed send out to foreign banks while Congress was approving the $700 billion. To hear Paulson, Bernanke, and Bush tell it, the banks were all sitting around with their mouths open gasping for air.

In the meantime, we noticed that Federal Reserve Stock holders Chase and Citigroup are going to make out like bandits buying up assets for pennies on the dollar.

Now the headline reads, "Housing must mend to see economic recovery". What was the purpose of the $700 billion?

We weren't born yesterday. Washington was and they have been scammed again. As soon as we replace the Congress members and Senators that voted for this bill next month, we need to raise their salaries to say, $1 million so we can attract some talent to the next election.

http://ewebsmith.com/finance/CPResponse.html

by Web Smith (3 articles, 0 quicklinks, 2 diaries, 28 comments) on Sunday, Oct 5, 2008 at 2:57:25 PM

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Those who do not learn from history are destined to repeat it. Unfortunately it seem to be our leaders that slept through history classes.

by F A Crews (0 articles, 0 quicklinks, 0 diaries, 1 comments) on Tuesday, Oct 7, 2008 at 1:41:05 PM

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