News from 1930: “Playing politics at the expense of human misery”
This comes from the Blog News from 1930 which tells us what happened on this day in 1930 according to the Wall Street Journal:
Pres. Hoover criticizes wide variety of extensive relief measures introduced in Congress as “playing politics at the expense of human misery”; says prosperity can’t be restored by raids on the public treasury, relief measures already proposed by administration are maximum possible without increased taxes; “no matter how devised, an increase in taxes in the end falls upon the workers and farmers, or alternatively deprives industry of that much ability to give employment.”
Here’s another tidbit from the same day:
Whaley Eaton Washington letter: “The great industrial leaders and financiers have more at stake than any others, and they are not twirling their thumbs … They are doing a tremendous amount of work. The economic system has not toppled over and is not going to. This is a typical trade depression and it will disappear just as others before it have.” Sees positives in: extensive liquidation already accomplished; financial situation “incomparably better than it was a year ago,” with Fed. Reserve “magnificently buttressed”; adjustment to new price ranges and equilibriums progressing.
Col. Ayres of Cleveland Trust now sees 1931 as year of slow business recovery, with activity still below normal at end of year. However, sees fair prospect “it will be characterized by progressive improvements, instead of by recurrent declines.” This business depression “has been very much more severe than anyone expected,” but records of the past half-century indicate improvement next year; by our records, businesses has never declined for so long and to such low levels and then postponed a definite recovery for another year.
Plus ça change. More here.
then as now, few seem to appreciate what the wrecking of household and corporate balance sheets by an asset collapse following a debt boom really means.
i wish more folks would get past the wild-eyed reactionary fear of taxes to see what has to be done and how important it is to do it — even if you’re attached to the idea of government debt issuance, frankly spending today has little to do with future taxes because debt is never retired. how much debt from ww2 did we actually retire? any? did it cripple the country? it’s been rolled in perpetuity and will continue to be. so will the debt incurred in 2009. the only material metric is the long-run rate of debt servicing costs versus the long-run rate of economic growth.
hoover’s quote is salient. this country was nearly destroyed once because it feared “raids on the public treasury” more than it understood the consequences of a private sector balance sheet collapse. the private sector has to save and retire debt, and the only way to do it is through public sector deficits — seems to me our choice is only whether to do it before or after a deflationary asset/income/wealth collapse.
Well said. It is unclear if Hoover is defending the common man or saying that we can’t go on spending or both. If it’s both, it would make the parrallel to Obama that much greater.
Here ya go:
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