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The real problem is not that Goldman Sachs knows how to exploit bubbles or that they sell bad products or turn to the government when their gambles don't pay of

The real problem is not that Goldman Sachs knows how to exploit bubbles or that they sell bad products or turn to the government when their gambles don't pay off. The real problem is that our government seems to be at the beck and call of Goldman Sachs and entities like it. Congress has even surrendered its responsibility for our money to the Federal Reserve, a scheme hatched by bankers that created the bubble leading up to first great depression.

borism 17y ago
tin foil hat alert!
cynicalkane 17y ago
"First great depression"? The "first" great depression had the Dust Bowl, mass migration, people starving to death right in public, shantytowns popping up everywhere, and 25% unemployment. The "first" great depression had a 30% decline in GDP. When was the second great depression?
- pw0ncakes 17y ago
  I call this the Petty Depression. It's not nearly as bad as the depression of the 1930s, but it's worse than a recession. Recession is the predictable, brief, and necessary period of creative destruction and contraction in a functioning economy. It causes some people to get laid off, but they usually get better jobs within 1-3 years, and the economy as a whole improves. This is something else, and will have a long-term scarring effect on the nation. The fact that "petty" means both small (which this one is, as far as depressions go) and mean-spirited (price-gouging on housing with young families at the barrel-end) means it fits surprisingly well.
  - stretchwithme 17y ago
    how about we see how this goes before we declare it healed? The government borrowing massively to keep the government sector expanding and is paying people to consume in an effort to convince everybody that things are recovering. This is not sustainable and only worsens our situation. One day, we must face up to our debts. We'll be very lucky if interest rates aren't jacked up on us. And, as in Japan, it seems they want to keep the zombie banks alive and avoid acknowledging the extent of the problems.
    - pw0ncakes 17y ago
      I'm not ready to "declare it healed", but the probability that our depression becomes anywhere near as severe as the 1930s Great Depression is very low. It has created a lot of suffering, and will likely cause a lot more, and we may not get out of it until the 2020s, but I don't see it as likely that people will starve in this country, nor do I see widespread bank failures as likely.
      - vlod 17y ago
        Agreed. People still seem to have enough money to fill up and drive their huge SUV. When they trade them for Camrys is when I pull my money from the banks.
      - codexon 17y ago
        We will never see another depression driving down living standards to the level of the 1930s due to technology. But a relatively similar percentage reduction? Quite likely. I would say that this depression looks quite similar to the beginning of the great depression when you consider unemployment percentages and debt as a percent of GDP.
patrickgzill 17y ago
To add to this: the Fed was created in response to the usual ups and downs of the marketplace - there would be financial crises about every 20-30 years, and they could be quite crushing. The claim was that if the Fed was created, we would never have such bubbles/panics again. Since the Fed was created in 1913, and we have had the Great Depression and lots of other monetary issues, including the current one, it is safe to say that the original argument in favor of the Fed is proven false.
- jimbokun 17y ago
  Outside of the great depression, have the crises been as bad as they were before the institution of the Fed? It's possible that the Fed has moderated the severity of monetary crises.
  - stretchwithme 17y ago
    no, its all been relatively minor. There was no massive inflation in the 70s, and there's no massive $12 trillion debt. And we aren't going from bubble to bubble. yep, its all been smooth sailing. only because they've figured out how to borrow and inflate their way out of every correction. in the mean time total system risk grows to never imagined heights.

borism 17y ago

tin foil hat alert!

cynicalkane 17y ago

"First great depression"? The "first" great depression had the Dust Bowl, mass migration, people starving to death right in public, shantytowns popping up everywhere, and 25% unemployment. The "first" great depression had a 30% decline in GDP. When was the second great depression?

pw0ncakes 17y ago
I call this the Petty Depression. It's not nearly as bad as the depression of the 1930s, but it's worse than a recession. Recession is the predictable, brief, and necessary period of creative destruction and contraction in a functioning economy. It causes some people to get laid off, but they usually get better jobs within 1-3 years, and the economy as a whole improves. This is something else, and will have a long-term scarring effect on the nation. The fact that "petty" means both small (which this one is, as far as depressions go) and mean-spirited (price-gouging on housing with young families at the barrel-end) means it fits surprisingly well.
- stretchwithme 17y ago
  how about we see how this goes before we declare it healed? The government borrowing massively to keep the government sector expanding and is paying people to consume in an effort to convince everybody that things are recovering. This is not sustainable and only worsens our situation. One day, we must face up to our debts. We'll be very lucky if interest rates aren't jacked up on us. And, as in Japan, it seems they want to keep the zombie banks alive and avoid acknowledging the extent of the problems.
  - pw0ncakes 17y ago
    I'm not ready to "declare it healed", but the probability that our depression becomes anywhere near as severe as the 1930s Great Depression is very low. It has created a lot of suffering, and will likely cause a lot more, and we may not get out of it until the 2020s, but I don't see it as likely that people will starve in this country, nor do I see widespread bank failures as likely.
    - vlod 17y ago
      Agreed. People still seem to have enough money to fill up and drive their huge SUV. When they trade them for Camrys is when I pull my money from the banks.
    - codexon 17y ago
      We will never see another depression driving down living standards to the level of the 1930s due to technology. But a relatively similar percentage reduction? Quite likely. I would say that this depression looks quite similar to the beginning of the great depression when you consider unemployment percentages and debt as a percent of GDP.

patrickgzill 17y ago

To add to this: the Fed was created in response to the usual ups and downs of the marketplace - there would be financial crises about every 20-30 years, and they could be quite crushing. The claim was that if the Fed was created, we would never have such bubbles/panics again. Since the Fed was created in 1913, and we have had the Great Depression and lots of other monetary issues, including the current one, it is safe to say that the original argument in favor of the Fed is proven false.

jimbokun 17y ago
Outside of the great depression, have the crises been as bad as they were before the institution of the Fed? It's possible that the Fed has moderated the severity of monetary crises.
- stretchwithme 17y ago
  no, its all been relatively minor. There was no massive inflation in the 70s, and there's no massive $12 trillion debt. And we aren't going from bubble to bubble. yep, its all been smooth sailing. only because they've figured out how to borrow and inflate their way out of every correction. in the mean time total system risk grows to never imagined heights.