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Stumbled across an interesting article - a reprint from the Chronicle of Higher Education

The Real Great Depression
The depression of 1929 is the wrong model for the current economic crisis

By SCOTT REYNOLDS NELSON  Scott Reynolds Nelson is a professor of history at the College of William and Mary. Among his books is Steel Drivin' Man: John Henry, the Untold Story of an American legend (Oxford University Press, 2006).

 

http://chronicle.com/...

Not being particularly well educated in history - especially our own, we tend to forget how volatile our economy was during the 19th century - and how devastating the various recurring 'Panics' could be.

while I recommend that you follow the link and read the whole article, the conclusions to be drawn are not too positive.  We may be in for a long period of real pain as financial markets rebuild.

continued

From the article - emphasis added

As a historian who works on the 19th century, I have been reading my newspaper with a considerable sense of dread. .....................

When commentators invoke 1929, I am dubious. ....................
our current stock-market dip followed bank problems that emerged more than a year ago; and there are no serious international problems with gold reserves, simply because banks no longer peg their lending to them.

In fact, the current economic woes look a lot like what my 96-year-old grandmother still calls "the real Great Depression." ...................

The problems had emerged around 1870, starting in Europe. In the Austro-Hungarian Empire, formed in 1867, in the states unified by Prussia into the German empire, and in France, the emperors supported a flowering of new lending institutions that issued mortgages for municipal and residential construction, especially in the capitals of Vienna, Berlin, and Paris. Mortgages were easier to obtain than before, and a building boom commenced. Land values seemed to climb and climb; borrowers ravenously assumed more and more credit, using unbuilt or half-built houses as collateral. The most marvelous spots for sightseers in the three cities today are the magisterial buildings erected in the so-called founder period.

But the economic fundamentals were shaky. Wheat exporters from Russia and Central Europe faced a new international competitor who drastically undersold them. The 19th-century version of containers manufactured in China and bound for Wal-Mart consisted of produce from farmers in the American Midwest.....................  The crash came in Central Europe in May 1873, as it became clear that the region's assumptions about continual economic growth were too optimistic. ...............

As continental banks tumbled, British banks held back their capital, unsure of which institutions were most involved in the mortgage crisis. The cost to borrow money from another bank — the interbank lending rate — reached impossibly high rates. This banking crisis hit the United States in the fall of 1873. Railroad companies tumbled first. They had crafted complex financial instruments that promised a fixed return, though few understood the underlying object that was guaranteed to investors in case of default. (Answer: nothing).The bonds had sold well at first, but they had tumbled after 1871 as investors began to doubt their value, prices weakened, and many railroads took on short-term bank loans to continue laying track. Then, as short-term lending rates skyrocketed across the Atlantic in 1873, the railroads were in trouble. When the railroad financier Jay Cooke proved unable to pay off his debts, the stock market crashed in September, closing hundreds of banks over the next three years. The panic continued for more than four years in the United States and for nearly six years in Europe.

The long-term effects of the Panic of 1873 were perverse.

Summary - large strong companies bought out weak ones that lacked the capital to survive.  This was he REAL beginning of the Gilded Age with industries increasingly concentrated in fewer and fewer firms.

The ordinary worker was hardest hit with many small employers going out of business.  Tens of thousands became 'transients'... relief rolls exploded with double digit unemployment rates.....  demonstrations by workers demanding jobs were often met by violence.....  strikes by workers resisting cutbacks became violent

Europe suffered even more with people looking to place blame -  anti-Semitism increased.... Jews became scapegoats - convenient for some political leaders

The echoes of the past in the current problems with residential mortgages trouble me. Loans after about 2001 were issued to first-time homebuyers who signed up for adjustablerate mortgages they could likely never pay off, even in the best of times. Real-estate speculators, hoping to flip properties, overextended themselves, assuming that home prices would keep climbing. Those debts were wrapped in complex securities that mortgage companies and other entrepreneurial banks then sold to other banks; concerned about the stability of those securities, banks then bought a kind of insurance policy called a credit-derivative swap, which risk managers imagined would protect their investments. More than two million foreclosure filings — default notices, auction-sale notices, and bank repossessions — were reported in 2007. By then trillions of dollars were already invested in this credit-derivative market. Were those new financial instruments resilient enough to cover all the risk? (Answer: no.) As in 1873, a complex financial pyramid rested on a pinhead. Banks are hoarding cash. Banks that hoard cash do not make short-term loans. Businesses large and small now face a potential dearth of short-term credit to buy raw materials, ship their products, and keep goods on shelves.

If there are lessons from 1873, they are different from those of 1929. Most important, when banks fall on Wall Street, they stop all the traffic on Main Street — for a very long time. The protracted reconstruction of banks in the United States and Europe created widespread unemployment. Unions (previously illegal in much of the world) flourished but were then destroyed by corporate institutions that learned to operate on the edge of the law. .............................

In the end, the Panic of 1873 demonstrated that the center of gravity for the world's credit had shifted west — from Central Europe toward the United States. The current panic suggests a further shift — from the United States to China and India. Beyond that I would not hazard a guess. I still have microfilm to read.

I found this an interesting read.... especially the shifts in economic centers, the use of questionable financial instruments serving as a trigger, and the prolonged recovery period needed.......

Originally posted to xrepub on Fri Oct 10, 2008 at 04:36 AM PDT.

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Comment Preferences

  •  The big difference is.,,, (13+ / 0-)

    th.at in 1873 we were an awakening industrial giant rich in resources with an expanding manufacturing base. Today we seem more like 19th century Manchu China than 19th century America.

    CHRISTIAN, n. One who believes that the New Testament is a divinely inspired book admirably suited to the spiritual needs of his neighbor. A. Bierce

    by irate on Fri Oct 10, 2008 at 04:42:12 AM PDT

  •  Everyone says (7+ / 0-)

    if we fail to learn the mistakes in history, we are doomed to repeat them.

    So, we should put history professors in charge of everything!

  •  Thank you... (6+ / 0-)

    excellent posting. The similarities between the housing markets then and now are pretty astounding.

    Really appreciate this.

    "The revolution's just an ethical haircut away..." Billy Bragg

    by grannyhelen on Fri Oct 10, 2008 at 04:48:45 AM PDT

  •  Neither. (5+ / 0-)

    In terms of the U.S. work force we have higher education levels and a more skilled workforce; even if our infrastructure is wasting away we still have infrastructure that wasn't in place in the 19th century -- or for that matter the late 1920s.

    I do think that this will accelerate the financial clout of China and India -- it will diminish the U.S.'s economy power relative to the rising economic powers.  But my wild-arsed guess is that the U.S. will find its footing sooner rather than later IF we're able to get 60 votes in the Senate and the White House.  (e.g. we're looking at a 3 to 5 year turnaround, not a 10 to 20 year horizon).

    If McCain-Palin win, well that's 4 more wasted years.  All bets are off.

    •  I hope BUT fundamental changes are afoot (4+ / 0-)
      Recommended by:
      sxwarren, NotGeorgeWill, LaFajita, scotths

      there's no reason for the US to hold onto the 'high value' (and is there any REAL reason for these jobs to pay such obscene salaries?) financial jobs - when the customers - the REAL customers (companies who create value) are no longer here.....     even the 'thinking industries' - programming etc - are moving overseas

      Just where are the jobs that will pick up the slack?  Bush's 'small business' job engine was a farce - with many of those being franchises like Subway or Mailboxes etc bought by midlevel execs who lost their well paying jobs - unable to find anything else and desperate to make it to 65....

      New Eneregy jobs will go to where  its CHEAPEST to make things - still not here.  Where are most of the solar panel companies?

      •  I agree whole-heartedly . . . (1+ / 0-)
        Recommended by:
        LaFajita

        Investments in green collar jobs SHOULD be a no-brainer.  Look at the investments in the space program -- DARPA (which developed the foundation for the internet) -- or even things like the Interstate Highway system.  Those were investments in the real economy, which provided a basis for real economic growth.  The private sector will eventually take these things over, but it's hard to see how the U.S. will achieve a competitive advantage without a serious front end investment by the federal government.

        I also think fixing the health care system in this country is going to be vitally important.  The system that we have right now is extremely inefficient -- and it doesn't serve consumers or business well.  If a single-payer system can be run for 20 percent less than our patch-work system, that's a huge chunk of change that can be directed towards more productive uses.

        As far as the financial sector goes, I think the economic crisis will take care of this -- the financial sector exploded because foreign investors poured money into the sector.  It is now imploding in part because foreign investors (and domestic ones) no longer have confidence in the system.

        One way to put a check on the obscene growth at the top strikes me as putting in a taxation policy at the top of the economy similar to the one that we had for 50+ years during the post-war economic expansion.  Close down tax-shelters, raise the top-marginal rates, create a taxation system on markets that encourages investment rather than speculation (e.g. a one cent transaction tax).

    •  I am doubtful of this "imminent" (2+ / 0-)
      Recommended by:
      New Deal democrat, NotGeorgeWill

      China rise. It's almost becoming one of these ideas based on not much like "decoupling" a year ago.

      China has enormous problems that are rarely talked about. They are too many to count here, but if anyone believes they can escape a Western depression intact or barely damaged, then they've been drinking too much kool aid. Their domestic market is not even close to the overseas markets they export to, without exports, China is literally nothing. China's exports are going to take a massive hit in this crisis as Americans cut back by huge numbers.

      On a longer term outlook, their development is hinged on 19th century industrial models--totally unsustainable with the depletion of these resources. Their currency remains highly undervalued purposely fueling double digit inflation in order to keep their massive exporting--this is not going to last forever. Cheaper places to build factories will eventually spring out once China becomes a slightly worse deal to manufacture in. Their population is set for a massive fall come 2020, while the number of people living on under a dollar a day remains in the hundreds of millions.

      China is not going to become the new US any time soon, not even any time far away. Not unless they radically change their 19th century industrialization model which they very well may, but you're still not looking at King China in out lifetimes not our children's.

      "People place their hand on the Bible and swear to uphold the Constitution. They don't put their hand on the Constitution and swear to uphold the Bible." --J.R.

      by michael1104 on Fri Oct 10, 2008 at 05:28:32 AM PDT

      [ Parent ]

      •  I'm familiar with those arguments . . . (0+ / 0-)

        the thinking is that India is going to be a better long-term (20-30 years) bet because it has institutional stability.  China has some potentially devastating internal tensions between the new rich and the large numbers left behind.  I still think that China is going to be a serious economic player long-term.  If we're talking longer term (50-60 years) I think China should not be underestimated.

        •  I'm not underestimating them by any means... (0+ / 0-)

          they already are a serious economic player, no question about it, and will continue to be.

          I just don't believe the hype of the ridiculous analogy that they are somehow in the shoes the US was circa 1870 just a few years of becoming the biggest economic behemoth on earth. It simply won't happen this soon.

          And the simplest measure of that without looking at anything else is their GDP per capita: astoundingly low, even if we assume this 8-10% yearly GDP growth without interruption, their GDP would finally surpass the US's in 50 years--and on a per capita basis, pretty much never.

          "People place their hand on the Bible and swear to uphold the Constitution. They don't put their hand on the Constitution and swear to uphold the Bible." --J.R.

          by michael1104 on Fri Oct 10, 2008 at 08:07:27 AM PDT

          [ Parent ]

          •  China plays for the LONG term (0+ / 0-)

            Wo was the leader asked about the implications of the French Revolution who responded "It's too soon to tell..."

            I worked for someone whose grandfather was the Imperial Ambassador from China to a European country....   the Chinese were FAR more advanced than the West for thousands of years.  There's some evidence that the Renaissance and Age of Exploration were in  part sparked by CHINESE influences - much of DaVinci's work is eerily similar to the inventions shown in a Chinese PRINTED book of the period and there IS eivdence of cultural interaction between the Chinese and Italy/Portugal, etc at the time...   '1421' and other books provide interesting insight.....

            The Chinese view the past 2-300 years as anomolies - temporary changes in the balance of world power arising from China's own turn inward and the unexpected technological progress occurringin the West.

            But the Chineseview Westerners as immature - a youth who's had more power than judgement - one who has yet to learn from the limited experience they've had.... a youth lacking real judgement and maturity....

            The West is too often condescending to China - and though they are quiet and polite, resentment is there and is building......

            The future is China and our own ineptitude has hastened China's ascendency by 50 years.  China is winning /buying friends and influence - a far more effective strategy than what the US has been doing.   China has NO bases outside its borders - we cannot claim the same.

    •  We still need to play the expectations game (1+ / 0-)
      Recommended by:
      NotGeorgeWill

      on the political front and aggressively counter the spin and blame that the Repubs will continue to propagate through their friends in the Legacy Media.

      Obama/Biden will be inheriting a federal budget that's a triple-decker shit sandwich with special sauce and all the trimmings.  Even with a majority in the House and and a filibuster-proof majority in the Senate, it's gonna be a tough chew right through the 2010 mid-terms and progress likely will be incremental and difficult to demonstrate.  All the effort that we've put in to getting Obama/Biden and these Congressional majorities elected will need to be redoubled to hold onto those majorities.

      Some folks prefer a map and finding their own route. Others need someone to tell them where to go.

      by sxwarren on Fri Oct 10, 2008 at 05:52:34 AM PDT

      [ Parent ]

      •  Absolutely. (1+ / 0-)
        Recommended by:
        sxwarren

        Assuming that Obama-Biden pull this off, I think it's going to be important in the first month after the inauguration to get all of the sh-t out there.  To let people know this is what we're up against, and we're not going to turn the corner tomorrow.  We will make it through, but it will take time to turn the corner.

        •  I was thinking that one thing we could all (0+ / 0-)

          try to do is learn as much as possible about budget details and how to communicate those in an easily understandable way - so as to be able to demonstrate that much of what we face is a bookkeeping/accounting problem, thereby blunting the ideological component of potential criticisms.

          Some folks prefer a map and finding their own route. Others need someone to tell them where to go.

          by sxwarren on Fri Oct 10, 2008 at 08:14:43 AM PDT

          [ Parent ]

    •  A quibble with your statement (0+ / 0-)

      We are the 21st century equivalent of 19th century Europe, complete with a major power being led by a mediocre offspring who thinks war is cool.

      Nelson's article doesn't address the succession of minor wars by the various gimcrack "Empires" of the post Napoleonic period, brought to a climax of sorts, for the time being, by the spanking Napoleon III of France received at the hand of Bismark of Prussia. Empires are nothing if not damned expensive, and during this period in European history all involved had to have one.  

      •  I see some differences . . . (0+ / 0-)

        Iraq is something like a colonial occupation, but it's a lot less successful than any of the ones undertaken by 19th century European powers.  

        The era of colonial powers is over thanks to developments in technology (e.g. a local insurgency can exact a price on multi-million dollar military technologies with a few hundred dollars worth of equipment -- e.g. the Kalisnikov and IEDs).

        In terms of comparisons to other 19th century powers I see differences in terms of political structures.  

        I'm hopeful that the U.S. can transition in a manner similar to that of the U.K. post-empire.  Still a major player, but not a power that can dictate terms.  I think those days are likely coming to a close for the U.S.  In some respects it could be a healthy development.

  •  The Rethugs failed history courses (2+ / 0-)
    Recommended by:
    sxwarren, cherry poptart

    too.  Let's see, they failed the sciences, finance courses, history......am I leaving anything out?  I think it's time for the Rethugs to take some remedial history courses, maybe then they might learn something.  I am not holding my breath though.  Damn assholes.

    If the people lead, the leaders will follow.

    by Mz Kleen on Fri Oct 10, 2008 at 04:56:05 AM PDT

  •  Excellent diary (5+ / 0-)

    Not only are the specifics you go over important, but people need to know that the markets crash and the economy contracts; not just once during the Great Depression, but repeatedly.

    Another huge difference, of course, is that at that time currencies were based on gold. Today, we have fiat currencies, so there's nothing real to keep the bottom stabilized. I fear that we've only seen the beginning of this "readjustment".

    •  The LACK of a central bank was responsible for (6+ / 0-)

      many of the recurring PANICS in the US.  Gold was often in short supply and flew overseas to pay for imported items when times were good.  A lack of credit and even plain old currency (hard and paper) often caused downturns.

      Most Americans lived in a perpetual state of hard cash (gold/silver) SHORTAGES.  STATE chartered banks printed their own paper money - technically in proportion to gold reserves on hand (though that was often fraudulent).  Counterfeiting was rampant as were completely bogus banks.

      The LACK of 'liquidity' was an ever-present problem - farmers losing farms in Panics because they could not get their hands on money to pay mortgages - even as they HAD produce.

      This absurd situation led to Morgan bailing out the government at the trn of the century and the creation of the Federal Reserve (a rather half-assed system actually - government guarantees currency printed fro a bank owned not bu the government but by member banks operating under Federal approval)

  •  Thank you for this diary. (3+ / 0-)

    If the 'solution' to that financial crisis was for stronger companies to buy out the weaker ones, I imagine that China and Russia are just waiting until the right moment to own half of the Dow.

    It gets cheaper every day, seemingly.

    They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety. - Benjamin Franklin, Feb 17, 1755.

    by Wayward Son on Fri Oct 10, 2008 at 05:02:35 AM PDT

  •  We had a radical republican president then too. (3+ / 0-)
    Recommended by:
    grannyhelen, sxwarren, LaFajita

    Ulysses S. Grant was president from 1869-1877.

    From the White House web site:

    Late in the administration of Andrew Johnson, Gen. Ulysses S. Grant quarreled with the President and aligned himself with the Radical Republicans.

    You'd think we would learn from history.

    There is more parallels though.

    When he was elected, the American people hoped for an end to turmoil. Grant provided neither vigor nor reform. Looking to Congress for direction, he seemed bewildered. One visitor to the White House noted "a puzzled pathos, as of a man with a problem before him of which he does not understand the terms.

    Sounds familiar?

    Of course the man was a hero and led a far different life prior to being president than the moron we currently have besmirching the hallowed bedchambers of the White House.  However, the president doesn't sound too dissimilar than the chimp currently in charge.

    •  Did you know Frederick Douglass campaigned for (2+ / 0-)
      Recommended by:
      LaFajita, ppl can fly

      Grant? He did. Really.

      "Radical Republicans" were known as such as that time not necessarily because of their economic policies but because they were the staunchest abolishionists who wanted to punish the South, instead of embracing it.

      "The revolution's just an ethical haircut away..." Billy Bragg

      by grannyhelen on Fri Oct 10, 2008 at 05:11:15 AM PDT

      [ Parent ]

      •  Former 'co-operatives' were privatized (1+ / 0-)
        Recommended by:
        grannyhelen

        and rates went through the roof.....

        ask someone in Montana...   SOMETIMES plain old government owned or regulated monopolies make sense.

        AT&T worked FINE.... airlines were BETTER when regulated and provided far better service and coverage.  now you have 900 cheap flights to Vegas and half the country with NO air service.

      •  That irony wasn't lost on me. (1+ / 0-)
        Recommended by:
        LaFajita

        There were other very different things Grant did than the idiot in charge like oh I dunno, balancing a budget or two and having a trade surplus.  

        The biggest similarities between the two were that they had alot of scandals and both were seen as being weak leaders as a result their subordinates misconducts.  Grant even like Bush helped some escape conviction by granting a pardon.  That's where the similarities end though as Grant had many people replaced whereas Bush has done everything to keep his people in place and has even done everything to cover up and minimize the scandals, even calling critics traitors.  Bush is a truly odious and despicable figure and honestly comparing Grant to him is doing a serious disservice to Grant.

        I just made that comment because I thought it was funny that he won because of radical republicans.  Of course the republican party back then was nothing like what it is today and being a radical republican then is akin to being a ultra left winger today.  It's ironic how the political parties have completely reversed themselves over the years.  

  •  The crisis is a much bigger deal than troopergate (6+ / 0-)

    I'm worried that if dems focus too much on the latter, we'll look as out of touch as the goopers...

    Maverick - a calf that has become separated from its mother. By convention, it can become the property of whichever lobbyist finds it first.

    by Minerva on Fri Oct 10, 2008 at 05:08:13 AM PDT

  •  I advocate the Social Security Trust Fund buy out (1+ / 0-)
    Recommended by:
    grannyhelen

    the nations electric company. Begin "us the people" the genration of an income to lend to banks and corporations and to help rebuild the financial markets. The 1929 people did not have that opportunity but rather they gave us the Social Security Trust Fund that would enable us to do this at this time. We could of course eliminate the FICA tax for a year or so to serve as capital incentive to working households.

    Then after we rebild tyhe markets Medicare and medicaid will be shored up and everyone could join in and become a nation of free nationwide healthcare.

    The shareholders and politicians can't object to us doing so because there are just two many shareholders in the Social Securiy Trust Fund.

    If our lights are burning and the bills get paid then we are Socially Secure.

    Got a better suggestion? Let's hear itplease and quick!

    •  Nationalize the oil industry? (2+ / 0-)
      Recommended by:
      LaFajita, jthorn2002

      Start govt price controls?

      Use windfall profits tax for oil co's and fund alternative energy?

      I'm open as well...

      "The revolution's just an ethical haircut away..." Billy Bragg

      by grannyhelen on Fri Oct 10, 2008 at 05:13:26 AM PDT

      [ Parent ]

      •  gets better each time I hear it mentioned (1+ / 0-)
        Recommended by:
        grannyhelen

        this ain't Saturday Night Live!

      •  Keep free markets open for Ideas and hard work! (0+ / 0-)

        Reward goodness but strengthen the common usage drivers in our economy.

        Rewards for those improving the world and living.

      •  Mexico and Russia make the case against that (3+ / 0-)
        Recommended by:
        sxwarren, LillithMc, LaFajita

        huge bureaucracies that are horridly inefficient...

        the current system is remarkably efficient actually with smaller companies willing to invest time and effort into 'depleted' fields abandoned by larger players.... Apache exists by mking old fields pay.

        The problem with oil is that the financial markets DO play games periodically and government has 'given away the store' when it comes to royalties and taxes.

        I DO believe in private enterprise - Risk and reward - BUT current laws treat natural resources as something companies NEED INCENTIVES to go after....  now the OPPOSITE is true - compamnies should be paying - and paying well - for the priviledge to go after natural resources on Federal or state lands.

        •  Bureaucrats pay light bills ad their healthcare (0+ / 0-)

          will become interwined in joining in our nationwide healthcare plan.

          The Russians once made the case to kill millions of people and Mexico is providing us with a great number of workers that contribute to Social Security Trust Fund contributions. And in my area which is a dairy area they too pay their electric bills and yes we know if they are or aren't legal. But beforewarned that the NRA ain't gonna remove them because they are putting food on our tableswhile our kids play video games instead of doing the work we used to do when I was a kid.

          Times they change.

  •  Excellent.. (1+ / 0-)
    Recommended by:
    LaFajita

    Your efort caused me to pull some of my great-great-great grandfather Gould's letters. (The railroad one)

    Thank you for this effort and for the previously unexplored terrain.

  •  Monopolies WERE bad for competition. There was a (3+ / 0-)
    Recommended by:
    LaFajita, scotths, ppl can fly

    law.  What happened to that law?

    42.7% of all statistics are made up on the spot. A Wrightism

    by publicv on Fri Oct 10, 2008 at 05:19:34 AM PDT

    •  I have observed competetion kills even and it (3+ / 0-)
      Recommended by:
      JuliaAnn, LaFajita, publicv

      has its place but is no longer a term in debate on the betterment of the individual citizens normal living day.

      Boone Pickens is buying up water rights and Huge Wolfe in Texas owns so many West Texas water rights just by a single clause in the Texas Legislature. Thats not right and should be put in our Socially Security because each time it rains on these water rights owned zones the wells are recharged and Nature mae those guys a natural depost in the wells and their bank accounts. Those rains belong to THE PEOPLE that defend and die for the constitutional right for their ownership.

      Should I put a law in for rainrigts water? Should I become the Wells Fargo armored rain car delivery to Boone Pickens and Hugh Wolfe's water BANK's?

      •  This is how the Indians were swindled (2+ / 0-)
        Recommended by:
        LaFajita, jthorn2002

        They believed God gives to all and when the European offered 20.00 and some booze for land, they thought it preposterous because God gives this land for all.  They couldn't understand the concept, but signed on the dotted line and voila!  

        42.7% of all statistics are made up on the spot. A Wrightism

        by publicv on Fri Oct 10, 2008 at 05:36:42 AM PDT

        [ Parent ]

  •  Thanks for the diary and the link (0+ / 0-)

    This diary ought to be on the front page.

    I read the source article, and this part I still don't get:

    If there are lessons from 1873, they are different from those of 1929. Most important, when banks fall on Wall Street, they stop all the traffic on Main Street — for a very long time.

    The author does not explain how or why that happened.  In fact it appears that "Main Street" was affected because manufacturers themselves (i.e., Railroads) were caught up in the financial derivative speculation.

    What this history piece helps clarify is that it is transparency and disclosure that are needed, so that lenders can determine who has "real" value and who is just a house of cards.

    Cheers.

    "When the going gets tough, the tough get 'too big to fail'."

    by New Deal democrat on Fri Oct 10, 2008 at 05:29:43 AM PDT

  •  We should have begun post 9-11 gas rationing NOT (0+ / 0-)

    get out and shop and keep flying like our President.

  •  Great find (1+ / 0-)
    Recommended by:
    LaFajita

    I wasn't even aware of this crash and the comparison with what is happening today is right on.  The future is looking bleak.  This may be the end of American capitalism.

  •  When you hear about what's wrong with (1+ / 0-)
    Recommended by:
    LaFajita

    education in the United States, Math and Science are always at the top of the list.  I imagine they will soon come in a distant 2nd and 3rd to...History.

  •  Yeah buy more books and read read HELL lets do (0+ / 0-)

    something. It's as simple as the utilities that go to each house but now the products you choose to buy to go in that house are your busimess and competetive. But the Social Security Trust Fund should own all the electricity companies in America as well as our power grids.

    Lets get pro active and fix this crap not wait and see what they do with your kids future.

  •  1893 was worse (2+ / 0-)
    Recommended by:
    sxwarren, Temmoku

    The thought of John McCain with his finger on the button is almost as scary as the thought of Sarah Palin a heartbeat away from the presidency

    by Paleo on Fri Oct 10, 2008 at 05:46:27 AM PDT

    •  You took my comment! Yes, 1893 was very bad too! (0+ / 0-)
    •  Well, for me personally, 1979-80 was (0+ / 0-)

      teh major suck.  But that's another story.

      Heh.

      Some folks prefer a map and finding their own route. Others need someone to tell them where to go.

      by sxwarren on Fri Oct 10, 2008 at 06:02:53 AM PDT

      [ Parent ]

      •  For a LOT of people........ (1+ / 0-)
        Recommended by:
        sxwarren

        Clearly we didn't learn anything from that.

        North Slope and North Sea oil weren't used as a buffer for a transition away from oil.  They were an excuse to pary away and build 9mpg Expetditions and Yukons

        Reagan took the solar panels off the White House and told everyone "America is great!"

        Morons..... the triumph of new politics where a movie star had more of the attribute needed t be President than a statesman.

  •  I wonder if part of this (0+ / 0-)

    is that we need to let a new economic reality emerge. That means some big winners of the past are going to be big losers now.

    This could be in part why the Bush admin and Paulson are locked in traction. Any move has negative consequences as well as positive.

    Choices need to be made and personally, I'd rather have Obama and his admin involved in this process than Bush. Interesting times.

    Isn't that a Chinese curse " May you live in interesting times."?

    the future begins

    by zozie on Fri Oct 10, 2008 at 06:08:25 AM PDT

  •  Missed the most important point (1+ / 0-)
    Recommended by:
    LaFajita

    In 1873, US  banks de-monetized silver, an event known as the Crime of '73. Look it up. This became a huge political issue; the Greenback Party, Populist party and several others arose from this, and this event was still an issue in 1896 when Bryan delivered his "cross of gold" speech at the Democratic convention.

    The Crime of '73 is also the basis for the Wizard of Oz.   Really.

    This act instantly impoverished farmers, which is why dorothy's aunt and uncle "never laughed" in the book.  And those ruby slippers?  Silver in the book. Ruby was to show off the capability of technicolor.

    The European connections are more tenuous than your author allows.  

    You're also off base on the lack of liquidity / central bank connection, and JP Morgan's 1907  bank bailout was legalized theft.

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