What the President had to say about the credit crisis

[fpb]

True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence.

Only the President in question is FD Roosevelt, and the credit crisis in question is the Great Depression. Are you, however, going to tell me that "stimulus packages" and the like are any cleverer than what he calls "the lending of more money"?

Comments

[fpb.livejournal.com]

I dealt with this point elsewhere, pointing out that between 1931 and 1940 the real freedom to move of any head of state was probably zero, since there was no international cooperation of any kind and growing intimations of war. What has kept the crisis today from spiralling out of control has been massive foreign buying into US stocks and businesses, carried out with real uninflated money and often by sovereign funds. IN 1932, foreign powers kept their money at home and, in the worst cases, financed pseudo-recoveries with massive military spending financed by uncontrolled state debt. Poor Mr. Roosevelt could do little except try to raise the US by its own diminished resources - effectively, by its own bootstraps. And you might remember that the US' own contribution to the widespread atmosphere of international ill-will and beggar-thy-neighbour, Smoot-Hawley, predated Roosevelt. The importance of Roosevelt is not so much in single inititatives (honestly, when the best you can think of is the Tennessee Valley Authority, you have a problem), but with the never-say-die, if-at-first-you-don't-succeed-try-try-and-try-again mood he instigated. Have you ever heard one of his speeches? They are remarkable, but they are to be heard from his living voice, because the sense of unconquerable energy and courage they convey dies on the printed page.

[stigandnasty919.livejournal.com]

The Credit Crisis is something we are going to have to thole, and work our way through. Bad lending decisions and bad investment decisions were made, all in the name of short-term gain with the intention of driving up share-prices. I believe that our economic system was driven into an unending boom and bust cycle when the value of shares ceased to be related to the value of the companies and became a large game of Poker with numerous card sharps, in the shape of speculators.

[fpb.livejournal.com]

Agreed.