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> Bold regulation on banks and insurance companies is necessary. What about bold regulation on the regulators and the politicians? You remember them - they th

by anamax 15y ago

> Bold regulation on banks and insurance companies is necessary. What about bold regulation on the regulators and the politicians? You remember them - they thought that subprime mortgages were a good idea, that everyone should own a house, so any bank that wouldn't play ball didn't get to play. You remember Fannie and Freddie - they lied about the fraction of the market that was subprime, so everyone's risk calculations were wrong. > Often the laws are written by the industry they're intended to police (cf. health insurance). Actually, they're always written by the relevant industry. > That's a horrible strategy. However, like gravity, it's how things are. Any plan that assumes otherwise is doomed. > This sounds like a quote by Herbert Hoover. Contrary to history's view of him (which is intensely negative) he was a very intelligent and probably a good-hearted man. He, however, believed that there was absolutely nothing government could do to save the economy, and that letting the beginnings of the Great Depression go unchecked was the least evil action. He was wrong. And, you're completely wrong. Hoover tried stimulus after stimulus; he dramatically increased spending. FDR actually campaigned against the spending and changed course upon taking office. Both Hoover and FDR believed that the great depression was caused by excess production, so they both tried to restrict it. FDR didn't give up until it became apparent that an "arsenal of democracy" had to actually produce lots of stuff. This "war on production" is now credited with putting the "Great" in "Great Depression", that is, with making it last as long as it did. http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonge...

aptwebapps 15y ago
You're right that Hoover ran a deficit. There's a common misconception that he was all for austerity when he in fact increased spending with a variety of stimulus programs. However, his stimulus programs were tiny compared to the size of the hole. FDR's programs got progressively bigger over time, until he blinked in 1937, but were still quite small compared to what was required. When WWII came along is when things got serious. Here's a nice table: http://www.presidency.ucsb.edu/data/budget.php http://www.presidency.ucsb.edu/data/budget.php That's the basic Keynesian view as I understand it. I find it credible, but the fact is that I don't actually know that much about economics. One thing that I am quite sure of, however, is that nearly no one else talking does either. Or if they do then they usually have got several axes to grind and are selective in their data, disingenuous in their arguments, or too emotional to be trusted. Wow, I'm getting pretty cynical about the whole thing.

by anamax 15y ago

aptwebapps 15y ago

You're right that Hoover ran a deficit. There's a common misconception that he was all for austerity when he in fact increased spending with a variety of stimulus programs. However, his stimulus programs were tiny compared to the size of the hole. FDR's programs got progressively bigger over time, until he blinked in 1937, but were still quite small compared to what was required. When WWII came along is when things got serious. Here's a nice table: http://www.presidency.ucsb.edu/data/budget.php http://www.presidency.ucsb.edu/data/budget.php That's the basic Keynesian view as I understand it. I find it credible, but the fact is that I don't actually know that much about economics. One thing that I am quite sure of, however, is that nearly no one else talking does either. Or if they do then they usually have got several axes to grind and are selective in their data, disingenuous in their arguments, or too emotional to be trusted. Wow, I'm getting pretty cynical about the whole thing.