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Financial lessons of the Great Depression

READ MORE: Financial lessons of the Great Depression
The lessons of the Great Depression are many; from "clean your plate", to a need for tighter fiscal regulation. Here we are in 2008. Sayeth the sage, "If we don't learn from history… we are doomed to repeat it." "This crisis could have been avoided if the people in authority, Wall Street, the White House, Congress, had a little better memory from the Great Depression," said Roger Lowry, UNCW political scientist. As time goes by, the memories and lessons of the Great Depression have not been lost on Miss Hannah Block and her colleagues who grew up in those years here in Wilmington. Their parents taught them well; back when thrift was still an honored virtue. Charles Boney said, "My father said tell me what you've got to have and I'll show you how to get along without it. And he did do that." Inez Richardson said, "Eat all the food you had on your plate. You don't waste food. You don't destroy your clothing. You use it, you keep it well taken care of and it will last a long time." It is becoming an increasingly difficult thing in 2008, especially if you're paying your way by waiting on tables. Try Barefoot is a college student and said, "My personal income is probably about a fourth of what it was a year ago." For older students trying to learn a new skill and manage a family, it's becoming even harder. Clareas Jacobs is a single mother of two and said, "We have to be very careful with our resources, that we don't overspend, that we have money until the next paycheck." "I honestly think it's a positive thing. In the future we need to start saving our money, thinking of the future, and not just doing everything in the past, living in the moment, because obviously if this occurred twice this can occur again," said Iman Khatib, also a college student. It seems today's college students are getting grounded in a hurry. Evelyn Chagaroy added, "I want to get my associates degree in nursing. Everybody needs nurses." "Unless they get a job and unless they can get things moving, nothing can take place," said Block. Precisely the philosophy that drove Franklin Roosevelt and the new dealers to create programs like the CCC and WPA in the 1930's, publicly funded programs to build roads, parks, dams, bridges; things that need upgrading today. Might a new Works Progress Administration work today? "Something like the WPA, if it were administered well, is something that should be given serious consideration. I think we're at the point though where the economy is nor nearly in that much danger as it was in the 1930's," Tom Simpson, former Federal Reserve Senior Advisor said. To a person, our group of seasoned citizens thinks we'll get through this downturn okay. "Someone once said we weren't just survivors we were thrivers. I think we were. We just appreciated what we had," Dottie Weathersbee.

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FDR made the depression worse and longer

It is good to hear that people are remembering how to deal with bad economic times. If we are in something like the GD, we have a long tough path ahead. However, the article continues thee myth that FDR and the new deal helped us in any way. Quite to the contrary, he made things worse and kept the economy in the depression for 7 yrs. FDR launched the National Recovery Administration (NRA) in 1933. Roosevelt called it a ‘partnership in planning’. Others called it a step towards a managed (non free market) economy. Washington's planners controlled production in entire industries, while government-sponsored bodies set wages and prices. The smallest businesses were cajoled to sign government ‘codes’ on matters like a minimum wage and earned a useless Blue Eagle badge if they did so. Even Left-wing historians now concede the codes were a fiasco. By 1935, they ran to 13,000 pages of text, a classic example of bureaucracy gone mad. Companies were battling with red tape instead of investing for recovery. According to one economist, the NRA put the cost of doing business up by 40 per cent and many small enterprises went bankrupt — the worst possible scenario in the middle of a Depression. The only winners, inevitably, were the biggest businesses of all, for whom the NRA worked as a massive price-fixing cartel. By 1937, businesses were so constrained by red tape and bureaucracy that corporate confidence was shattered and the economy plunged back into the abyss, with profits down 80 per cent and more than 10million out of work. What saved the administration was the war. Without it, recovery would probably have been long delayed. Historians at the University of California say that by eviscerating small businesses and destroying confidence, the New Deal prolonged the slump by seven years.

FDR prolonged the depression is baloney!

Thata A LOT OF BULL! Next you want us to believe that the Republicans were not to blame for the Depression just like Bush is not to blame. Get Real!!!!

I'd suggest you read the NY Times Editorial

...from Monday. The editors are very upset that the New Messiah is appointing some of the very same people who oversaw the deregulation liberals like to blame for the current economic crisis, to key positions in his cabinet and staff. Blaming the current economic situation on one political party is a waste of time and bespeaks an embarrassing ignorance of both Economics and history. It's not that I can't stand you blaming Republicans, it's that I won't let you exonerate the equally guilty. Let me give you a few examples.... I rarely listen to Hannity (his voice makes my skin crawl), but yesterday he played a series of audio clips concerning this very subject. You could hear Barney Frank, Maxine Waters, and several other key Democrats talking about "absolutely no problems or danger" at Freddie Mac or Fannie Mae. You could also hear some key Republicans warning of the eventual meltdown. You have to also remember that both current forms of the institutions, flawed and doomed for the past forty years because of their basic concept of reward with no risk (for the shareholders), risk with no reward (for the taxpayers) were brought into being under Democratic Congresses. Of course, maybe they would have held on a bit longer had they not come under pressure to lend money to less than credit-worthy buyers in depressed areas back in 1999. The source of that pressure was the Clinton White House. See what I mean? It's incorrect to blame only Republicans for the current mess. Both parties share equal blame for the current crisis, but the largest helping of the blame should fall outside Washington. Blame idiot bank executives that lost site of fundamental banking principals, overly creative junior executives (the Mark Fastow syndrome), dishonest mortgage pimps, and an American public who truly believed that double-digit increases in housing value was legitimate and infinitely sustainable. As Alan Greenspan explained it, no one believed that banks would intentionally commit suicide. BTW, while I feel the blame is unfounded, most critics cite the Gramm Leach Bliley Act as the single biggest piece of deregulation that caused the current economic mess. It repealed Glass Steagall....and was signed into law by William Jefferson Clinton.

Counting on the government to help?

WASHINGTON (AFP) – US elected officials scored abysmally on a test measuring their civic knowledge, with an average grade of just 44 percent, the group that organized the exam said Thursday. Ordinary citizens did not fare much better, scoring just 49 percent correct on the 33 exam questions compiled by the Intercollegiate Studies Institute (ISI). "It is disturbing enough that the general public failed ISI's civic literacy test, but when you consider the even more dismal scores of elected officials, you have to be concerned," said Josiah Bunting, chairman of the National Civic Literacy Board at ISI. "How can political leaders make informed decisions if they don't understand the American experience?" he added. The exam questions covered American history, the workings of the US government and economics. Among the questions asked of some 2,500 people who were randomly selected to take the test, including "self-identified elected officials," was one which asked respondents to "name two countries that were our enemies during World War II." Sixty-nine percent of respondents correctly identified Germany and Japan. Among the incorrect answers were Britain, China, Russia, Canada, Mexico and Spain. Forty percent of respondents, meanwhile, incorrectly believed that the US president has the power to declare war, while 54 percent correctly answered that that power rests with Congress. Asked about the electoral college, 20 percent of elected officials incorrectly said it was established to "supervise the first televised presidential debates." In fact, the system of choosing the US president via an indirect electoral college vote dates back some 220 years, to the US Constitution. The question that received the fewest correct responses, just 16 percent, tested respondents' basic understanding of economic principles, asking why "free markets typically secure more economic prosperity than government's centralized planning?" Activities that dull Americans' civic knowledge include talking on the phone and watching movies or television -- even news shows and documentaries, ISI said. Meanwhile, civic knowledge is enhanced by discussing public affairs, taking part in civic activities and reading about current events and history, the group said.


To think you could have added one more with Palin.... "Bush doctrine" I EVEN KNEW what that was. These guys in Washington are not there to help us, they want the pay and the benefits. ALL of them.


just backs up what I thought all along...our country is run by a bunch of monkeys! We just keep them up there....keep electing the idiots! We should really be bent over the knee of George Washington and Co and WHOOPED!

don't worry

Obama's here now!