Chris wrote on October 12, 2009 01:12 AM: Health insurance is a pain after being laid off too. I could keep "my" insurance and pay $800 a month, I could go on COBRA and pay $1100 a month, or I could drop it a take the chance that no insurance company would ever cover me and my wife ... too many unprofitable "pre-existing" conditions. Luckily my wife was able to get us on her work plan for $400 a month with a lot of pleading. But if my wife's work had no insurance plan we also wouldn't be able get on Badgercare (our state assisted program) because we made $100 too much a month. Too poor for private insurance to rich foor state insurance. Hope the wife doesn't lose her job or we're screwed. My wife has a number of medical issues and "our" insurance fights many of our claims. Smelly poor people with their nasty habit of getting sick and the audacity to expect their health insurance would pay! I bet they think their auto insurance will pay if they get into an accident or their life insurance will pay if their spouse has the nerve to die what fools. At least the emergency room will take you, but when the bill arrives you'll just wish your dead....

Chris wrote on October 12, 2009 01:01 AM: "Unemployment relief will prolong unemployment indefinitely, and delay the shift of workers to the fields where jobs are available." I'm a machinist who got laid off in June. I worked at the 2nd highest paying machine shop in Wisconsin. All the big shops have laid off and all the little shops have hiring freezes or are forcing their employees to take a pay cut or worked reduced hours. All the jobs in the area (30 mile radius) pay a third of what I was making. And their not returning my calls because they're worried when the economy picks up I'll jump ship. I can't even go back to school, because financial aid is based on what you made last year. Last year was good and I was busy. Now I have time and little funds. Health insurance is a nightmare too. I worked hard, went to tech school, and paid my taxes now I'm unemployable. The bankers who crippled the world economy are back inventing new ponzi schemes to get quick cash. Government officials in this "socialist government" are ex-Goldman Sachs people and afraid govt. regulation will hurt the struggling economy. My former company's bottom line is looking better not having to pay so many pesky workers. And the upper management and corporate officers who made foolish business decisions at my job got promotions, moved to other positions or got fired and got bigger slaries due to their "experience." Ah capitalism a system where only the little guy needs to learn discipline. He learns the golden rule - those who have the gold make the rules.

Dave West wrote on October 11, 2009 08:09 PM: In response to your story about causes of recession, is it just possible that relief will arrive about September of 2010,just in time for the election season and of course it will be because the democrats have been so benevolent... could that possibly be the strategy? Hmmm?

Rossputin wrote on October 11, 2009 11:00 AM: Your comments are right on target, but I have an answer to your ending question: Washington insists on "repeating this experiment" for two reasons:
1) It's about buying votes, not helping the economy, and
2) Progressives always believe the only reason their policies failed in the past is that they weren't implemented by just the right people. Of course, the Obama Adminstration is soooooo much smarter than everyone else that "The One" will be the one to make failed policies work this time.

That said, it's primarily about buying votes.

nyp wrote on October 06, 2009 09:08 AM: wow - this is the classic "liquidationist" approach come back to life. The most succinct version came from Andrew Mellon's advice to Herbert Hoover:
"liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people."

Amazing to see this approach reappear in 2009.

Brian Macker wrote on October 05, 2009 08:58 PM: John F,

"I don't doubt that left to its own devices the economy will self-correct eventually, but why make the people who are out of work wait when we can do something to speed the process. "

Well one problem with this part of your analysis is the assumption that the actions taken will speed the process. In fact they hamper the process and increase the length of the depression.

I suggest you go over to you tube you and watch the video by Thomas Woods titled "Why you've never heard of the Great Depression of 1920".

In fact, history shows you to be wrong as to timing. Those depressions where nothing was done ended much faster than those where the government attempted to "do something". With one caveat, if the "do something" involved cutting government expenditures and letting banks fail that was in fact helpful.

Geotopia wrote on October 05, 2009 04:55 PM: Very insightful article! Mr. Rothbards writings make a good backdrop to contrast todays' events!

John F wrote on October 05, 2009 10:09 AM: Mr. Robertson,

I didn't say it was monetary expansion AFTER WWII that created the recovery; it was the monetary expansion DURING WWII that did it. The period I cited was 1940 - 1945. That expansion of the money supply in the early 1940's was necessitated by the entry into the labor pool of all the people entering the military and all the people entering industry to supprt the war effort.

I don't doubt that left to its own devices the economy will self-correct eventually, but why make the people who are out of work wait when we can do something to speed the process.

Winston Smith had it just right yesterday. The problem is that neither major party can find the political courage to do what is right when things are good, namely tighten the belt on spending. They either use good times to justify large tax cuts, large spending increases, or (usually) both. Look what happened in 2000 (And I am not blaming only the Republicans on this. The Democrats, minority though they were, could have stopped it had they really wanted to.)

I suppose we'll never really know which of these two major economic theories is correct as there are no true Keynesians actually setting economic policy and there hasn't been such a thing as a truly free market in this country for a very long time. I'd be willing to give either a try.

Bob_Robertson wrote on October 05, 2009 09:41 AM: John F., you are so close to getting it. After WW2 it was NOT monetary expansion that created the recovery. It was the return to the active labor pool and the consumer demand of all those returning soldiers. The Fed.Gov also retrenched after the war, stopping much of its vast intervention into the economy that did exactly what you say it did: Prevented the falling of prices to match the reduction in the money supply of 1/3.

Now, in case you didn't know, the money supply of the US had a very similar drop in 1836. The Bank of England called it its loans, causing a monetary contraction and "depression". It lasted all of 6 months and the economy came out of it stronger than it went in. But why, with the same conditions, didn't the depression of 1836 last 17 years?

Because government deliberately got out of the way, instead of doing everything possible to prevent the correction, as it did in 1929 and now.

Please, please, please read/listen to this:

http://mises.org/mp3/Pres/Pres11a.mp3

http://mises.org/story/2201

Martin van Buren: The American Gladstone / What Greatness Really Means

Frank wrote on October 05, 2009 08:11 AM: Could the continuation of these reckless policies be an intentional attempt to wreck the economy to gain some kind of perverse control and force us into a globally controlled economy? Heaven forbid! But Heaven predicted.

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