True or False: Great Depression due to Lack of Federal Involvement

[constitutional]

A history professor says:

Great Depression was caused by: lack of federal involvement (too much fraud/not much oversight) and top heavy distribution of income (rich got richer compared to poor people-- Hedge funds?).

He said if RP was to be president today-- there would be less federal involvement thus we would face another depression. He said current situation is in line with the era before Great Depression--- AND THE FED RESERVE (Federal involvement) IS THE ONLY REASON WE HAVE NOT SEEN A CRASH.

How do I refute?


Another quick question: People say hedge funds are bad because it's basically people ripping off other people. How do I refute that mentality with capitalist ideas?

 

[Dr.3D]

The FED is the only reason the current situation is in line with the era before the Great Depression. Now the more they try to manipulate the economy, the worse it is going to be when it finally crashes. It would be better to have it crash and get it over with and then abolish the FED so they can't cause another one.

 

[yongrel]

I would recommend reading Rothbard's "America's Great Depression."

Many consider it the definitive work on the subject.

 

[rockandrollsouls]

Tell him Bernanke admitted the Fed caused it originally. Straight from the horse's mouth...

 

[yongrel]

Tell him Bernanke admitted the Fed caused it originally. Straight from the horse's mouth...

Correct me if I'm wrong, but I seem to recall Bernanke blaming the Fed's inaction, not action.

 

[rockandrollsouls]

I read something where he responded to a book written by someone or two people who researched the depression criticizing the fed's actions and he said he agreed and that they (the fed) wouldn't let it happen again. I could be wrong, though

 

[Kludge]

Correct me if I'm wrong, but I seem to recall Bernanke blaming the Fed's inaction, not action.

I was reading Time Magazine and they cited Bush as strictly "Free Trade" with his Fed cronies (Greenspan) pushing hard for loose money, high on their "blame-meter" for the recession. Fools living beyond their means by buying houses they could never afford were listed as having almost no blame....

I canceled my subscription. (Should have years ago).

"too much fraud"???? What does the Fed do when it loans out non-existent money?

 

[Kalifornia]

false. Your instructor is a fuggin idiot.

 

[Dr.3D]

false. Your instructor is a fuggin idiot.

Well, I think his professor was educated by those who would have us believe such lies.

 

[constitutional]

What about hedge fund? He thinks it's bad because it just top level wealth distribution (rich keep getting richer).

 

[Kludge]

What about hedge fund? He thinks it's bad because it just top level wealth distribution (rich keep getting richer).

Why shouldn't the rich get richer?

 

[constitutional]

Why shouldn't the rich get richer?

*I am going to argue with you with his mentality*

And the poor keep getting poorer (though hedge fund and this has no direct relationship).

And how about it's unethical/easy/rich club only? The poor can't participate. Or how about they are getting rich at the expense of poor?

Starvation?

 

[Dr.3D]

Why shouldn't the rich get richer?

Come on, you know that isn't a good thing in a socialist society.

 

[constitutional]

Come on, you know that isn't a good thing in a socialist society.

How about this: "My mother would have died of starvation if it wasn't for FDR's NEW DEAL (socialist programs)."

That's a touching issue. What do I say?

 

[Kludge]

*I am going to argue with you with his mentality*

And the poor keep getting poorer (though hedge fund and this has no direct relationship).

And how about it's unethical/easy/rich club only? The poor can't participate. Or how about they are getting rich at the expense of poor?

Starvation?

The poor can participate so long as they have human capital to expend. Regulation stymies any incentive for the poor to increase their wealth, God forbidding they move up a tax bracket.

The poor are given practically free reign in the stock market (losses are covered with no to almost no capital gains tax), however it isn't utilized. It's obvious to me that scarce resources can only be garnered through risk and hard work. A lazy welfare state only drags us further down.

 

[Kludge]

How about this: "My mother would have died of starvation if it wasn't for FDR's NEW DEAL (socialist programs)."

That's a touching issue. What do I say?

It's unfortunate that your mother didn't prepare properly and is now paying for her lack of responsibility.


What's for food at the reception?

 

[Libertytree]

Is your professor, and I'm assuming he's an economics prof, a follower of Keynesian economics or Mises/Freidman/Rothbard?

 

[Kludge]

Is your professor, and I'm assuming he's an economics prof, a follower of Keynesian economics or Mises/Freidman/Rothbard?

You need to ask?

 

[DrCap]

I would recommend reading Rothbard's "America's Great Depression."

Many consider it the definitive work on the subject.

Agreed.

The Federal government and the federal reserve did a number of very poor policy decisions which made a minor recession into a great depression, which we really didn't come out of until AFTER WWII (if you look at standards of living).
There were a number of steps that were made prior to the great depression by the government which also created bubbles which eventually had to burst.

In many ways it is what we may be seeing now as well. The government keeps adding more band aids to the problem and in essence, instead of letting things sort out, the politicians only delay and greatly exacerbate the problems.
The bailouts, the 'stimulus package' the gravely lowered interest rates, the destruction of whatever faith remained in a fiat currency... we will most likely see a number of additional laws passed to 'fix' the economic problems; laws which will only worsen things later.
FDR was our most damaging president ever.

 

[seapilot]

The Fed is like a lifeguard that stands on your shoulders holding you underwater then when you have just about drowned pulls you out recesitates you and gets an award for heroics. Then he does it all over again.