And you thought the comparisons to the Carter Administration were bad.

11 thoughts on “And you thought the comparisons to the Carter Administration were bad.”

1. took me a moment… Nice catch.

2. I had a diary once with a list of Important Events of the 20th Century.
   1928: Women get the vote.
   1929: Great Depression begins.
   As my mother said “It’s not that they’re trying to imply that the two events are linked…”

3. Noonan’s op-ed today (Friday) on the God-drenched inaugural speech and its messianic implications (I just want to know what the body-count will be and whether my son will be among the dead meat piled high in the service of these heavenly dreams) was pretty interesting, too.

4. This actually brings up a rather interesting side point (and heaven knows I’m usually willing to embrace side points). Are the modern Democratic and Republican parties similar enough to their historic counterparts to make such comparisons useful (even if we did think there was a link between those two facts).

5. essay on causes of the Great Depression:

   The large and growing disparity of wealth between the well-to-do and the middle-income citizens made the U.S. economy unstable. For an economy to function properly, total demand must equal total supply. In an economy with such disparate distribution of income it is not assured that demand will always equal supply. Essentially what happened in the 1920’s was that there was an oversupply of goods. It was not that the surplus products of industrialized society were not wanted, but rather that those whose needs were not satiated could not afford more, whereas the wealthy were satiated by spending only a small portion of their income.

   The Bush administration’s aim in domestic economy is to make the rich richer and the middle class poorer, and the poor even worse off.
   It would certainly be unsurprising if there was a depression in Bush’s second term: there was one in his first, and all the ingredients are there for it to happen again.

6. “It would certainly be unsurprising if there was a depression in Bush’s second term: there was one in his first”
   I remember being depressed, and I remember a recession, but a depression?

7. Rilkefan: You’re right, I should have said there well might be a recession in his second term, since there was one in his first.
   I would blame my stupid fingers for typing the wrong word, but they might go on strike, and I can’t afford that.

8. Very far off topic, but…
   “It would certainly be unsurprising if there was a depression in Bush’s second term: there was one in his first, and all the ingredients are there for it to happen again.”
   I expect there is going to be a very different crisis coming in the very near future, to reflect our different set of problems. I think the current general availability of credit ameliorates the concern in Jes’s comment, at the expense of leaving the public horribly over-extended in debt.
   On the other hand, the government is also horribly over-extended in debt. What’s worse is that much (I have read 60+%, but cannot find where) of the federal debt is being bought by just 2 entities, the governments of Japan and China. While I am willing to believe Japan will not cause an economic crisis for its benefit at the expense of the US, I have no reason to believe China will.
   Therefore, I can plasibly see a crisis beginning by China indicating that it will not purchase any new T-bills if we do not change our Taiwan policy. The Bush Administration (very reasonably) refuses to do so, and China makes good on its threat. US interest rates rise rapidly, leading to the following effects:
   1. very quick and deep slowdown in the economy.
   2. lenders finding any reason possible to deny or curtail credit.
   3. greater national deficits, due to increased unemployment compensation, lower tax revenues and increased interest on the national debt.
   4. a strong desire to avert this from repeating by closing the deficit as soon as possible. With the current Republican leadership, this is primarily done by reduced spending rather than increased taxes. Given the amounts necessary, this could include entirely eliminating most social welfare programs, starting with Medicaid.
   5. the societal effects of the reduced federal spending (most nursing home patients thrown out, hospitals forced either to deny coverage to poor people or to close, state and local governmental budgets out of balance, leading to reduced police, fire and schools, etc.) and the removal of credit availablity to most of the public are so great as to create a political crisis of proportions we have never before seen.
   I have not found anyone to convince me this is implausible. And that scares me a lot.

9. “The Bush administration’s aim in domestic economy is to make the rich richer and the middle class poorer, and the poor even worse off.”
   I think we need to be very careful in the distinction between increased stratification of wealth and “middle class poorer and the poor even worse off.” They aren’t the same thing at all.

10. Sebastian: I think we need to be very careful in the distinction between increased stratification of wealth and “middle class poorer and the poor even worse off.” They aren’t the same thing at all.
    All of them are presently true in Bush’s America, though, and Bush’s domestic policies are intended to increase poverty and to increase stratification of wealth.
    As Dantheman points out above, the ingredients for a massive depression – worldwide, if China decides to wreck the US economy as it undoubtedly has the power to do – are already present.
    A recession is more than likely.

11. Granted, China holds a lot of our debt, and could foreclose if it wished. But why would it wish? What does China get out of cannonballing the US economy – besides losing its biggest export market, which seems a dumb thing to do.
    If China decides to make good on its threat to re-absorb Taiwan by means fair or foul, and Bush threatens China, then I could see China using its financial clout. Or just saying it would. (Maybe the Chinese government has already made that clear, privately.)
    Or if Bush threatens military action against North Korea, maybe. But I don’t see that happening.
    The only likely scenario – and it’s a long shot – is if the Bush actually does escalate his incompetent, chaos-spawning ‘War on Terror’ beyond Iraq and somehow the Sauds are toppled, and oil supplies are affected. Because that would hit China where it lived, economically.
    But unless Bush does something that threatens China’s political or economic aspirations, I just don’t see China playing its creditor card.

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