Great Depression Holds Lessons, but What Are They?

[seemslikeadream]

http://online.wsj.com/article/SB122636879415716127.html?mod=googlenews_wsj

Andrew Wilson is right: The New Deal did not end the Great Depression ("Five Myths About the Great Depression," op-ed, Nov. 4). No less an authority than FDR's Treasury secretary and close friend, Henry Morgenthau, conceded this fact to Congressional Democrats in May 1939: "We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong . . . somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises . . . I say after eight years of this Administration we have just as much unemployment as when we started . . . And an enormous debt to boot!" Indeed, FDR's market-suffocating policies are almost surely what put the "Great" in Great Depression.

Laura S. Clancy
Arlington, Va.


Associated PressI am concerned that we are following the lead of 1930s failures into another depression. In response to a financial crisis, President Herbert Hoover raised taxes on businesses and wealthy individuals and instituted protectionist tariffs, thereby escalating the crisis into a depression. Franklin Roosevelt followed with the New Deal which destroyed business incentives and extended the Depression for over 10 years. That Depression led directly to World War II which was the greatest social, environmental and economic crisis the world has ever seen. President-elect Barack Obama campaigned on many of these same measures.

Capitalism has served America incredibly well for over 200 years. The current crisis resulted primarily from anticapitalists forcing banks and mortgage companies to lend money to people with little or no means to pay it back. That is not capitalism. Now, many say capitalist principles have failed. No way! It was the tinkering, with blatant disregard for capitalist principles, that failed and we should get back to what works: Reduce taxes on businesses and expand individual tax cuts. This will energize our economy and create a flood of tax revenue which would allow America to truly address the needs of the poor here and overseas. So what if it allows rich people to keep their money. Do we want to punish them so much that we are willing to sacrifice our country and make everyone poor?

Walter S. Creasy, Ph.D.
Bridgewater, N.J.

I am always surprised that the loss of exports is not given more credence as a factor in the Depression. Exports declined by $5 billion between 1929 and 1933.

The average wage was $1,000, so this meant a loss of five million direct jobs and over 12.5 million in total. The Fed should have tried to maintain price stability as it was mandated to do. But could any policy have replaced that loss? Those jobs were replaced and the Depression ended when exports picked up as France and Britain rearmed. France was occupied and Britain ran out of money, so the give-away Lend Lease program allowed exports to carry on.

The Smoot-Hawley Tariff Act of 1930 required Britain to repay loans in gold. There was no money to pay for U.S. exports after 1929. Before 1929 we had exported capital in the form of loans. Exports collapsed when they ceased in 1929.

James Cooper
Chatham, Mass.

[ben_meyers]

1. That is exactly the same road we are following now. All the

bailouts and protectionism will only delay the inevitable and cause a much harder crash than otherwise.

FDR took office in 1932, 3 years into the problem, and the depression wasn't declared over until 1943. Lend-lease got the wheels turning again but only a full scale wartime economy brought the world out of the "Great Depression. 17 million Americans under arms, and our factories converted to military production employed the rest.

[Winterblues]

2. Don't let Republicans control all three branches of government

The last time they did we got the Great Depression and now this....

[msongs]

3. avoid debt, pay cash, save your money, dont buy stocks on margin, invest in long

term things that will appreciate after they decline. BTW the real reason the depression ended was WW 2. not a recommended economic strategy more than once : -)

Msongs

[lib2DaBone]

4. Agree..NEVER let the Republicans control all 3 branches of Government...

Republicans in the presence of money are like Crack Addicts. They will lie, cheat and steal. It makes no difference who is destroyed in the process.

Any group that would clamor for the election of Sarah Palin can't be trusted with adult issues, let alone the economy of a country. (They are not functioning on a reliable level)

Wages have been falling since Reagan in 1980, and we have been sold on the world market to servitude. It's going to be a helluva struggle to get our Constitutional freedom back (if ever).

[JJ]

5. First Lesson

Don't believe a thing in the WSJ

It's always been a free market trickle down rag, but now it's Rupert Murdoch's free market trickle down rag.
All those poor misunderstood millionaires worrying that they'll have to pay some taxes.

[roamer65]

6. Delete.

[roamer65]

7. The editorial section of the WSJ is full of flying monkey reich wing nuts.

Ignore it.

The USA without the New Deal would have become the former United States of America. Civil unrest would have been the result of 8 more years of Hoover's foibles.