The nation's plight on March 4, 1933, the day Franklin Roosevelt assumed the presidency, was desperate. A quarter of the nation's workforce was jobless. A quarter million families had defaulted on their mortgages the previous year. During the winter of 1932 and 1933, some 1.2 million Americans were homeless. Scores of shantytowns (called Hoovervilles) sprouted up.
Since 1929, about 9,000 banks, holding the savings of 27 million families, had failed. Of those bank failings, 1,456 folded in 1932 alone. Farm foreclosures were averaging 20,000 a month. The public was desperate for action. Hamilton Fish, a conservative Republican congressman, promised the president that Congress would "give you any power that you need."
A month before taking office, Giuseppe Zangara, a mentally ill bricklayer, tried to assassinate the president-elect in Miami. Chicago's mayor was killed, but Roosevelt miraculously escaped injury. In his inaugural address, Roosevelt expressed confidence that his administration could end the Depression. "The only thing we have to fear," he declared, "is fear itself."
In Roosevelt’s first hundred days in office, he pushed 15 major bills through Congress. The bills would reshape every aspect of the economy, from banking and industry to agriculture and social welfare. The president promised decisive action. He called Congress into special session and demanded "broad executive power to wage a war against the emergency, as great as the power that would be given me if we were in fact invaded by a foreign foe."
Roosevelt attacked the bank crisis first. He declared a national bank holiday, which closed all banks. In just four days, his aides drafted the Emergency Banking Relief Act which permitted solvent banks to reopen under government supervision, and allowed the RFC to buy the stock of troubled banks and to keep them open until they could be reorganized. The law also gave the president broad powers over the Federal Reserve System. The law radically reshaped the nation's banking system; Congress passed the law in just 8 hours.
Roosevelt appealed directly to the people to generate support for his program. On March 12 he conducted the first of many radio "fireside chats." Using the radio in the way later presidents exploited television, he explained what he had done in plain, simple terms and told the public to have "confidence and courage." When the banks reopened the following day, people demonstrated their faith by making more deposits than withdrawals. One of Roosevelt's key advisors did not exaggerate when he later boasted, "Capitalism was saved in eight days."
The president quickly pushed ahead on other fronts. The Federal Emergency Relief Act pumped $500 million into state-run welfare programs. The Homeowners Loan Act provided the first federal mortgage financing and loan guarantees. By the end of Roosevelt's first term, the Homeowners Loan Act provided more than 1 million loans totaling $3 billion. The Glass-Steagall Act provided a federal guarantee of all bank deposits under $5,000, separated commercial and investment banking, and strengthened the Federal Reserve's ability to stabilize the economy.
In addition, Roosevelt took the nation off the gold standard, devalued the dollar, and ordered the Federal Reserve System to ease credit. Other important laws passed during the 100 days included the Agricultural Adjustment Act--the nation's first system of agricultural price and production supports; the National Industrial Recovery Act--the first major attempt to plan and regulate the economy; and the Tennessee Valley Authority Act--the first direct government involvement in energy production.
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Sorry Raybond, I'm not sticking up for Bush here, but IMO, the destruction of the gold standard by Roosevelt was a huge mistake and we are still feeling the repercussions to this day.
For example, I have a silver dollar in my coin collection. Back in 1920, when the coin was minted, it was worth face value; one dollar. Currently, it is worth close to 20$ using today's currency.
The truth is, your dollar is really only worth 4 cents and the only thing that gives any value to it is the governments ability to fleece the American taxpayer.
IMO? Roosevelt was a socialist in capitalist clothing that used an emergency to gain vast economic powers for the already corrupt US government.
Also IMO? The same thing is about to happen all over again and while we may see some relief for the short term, in the long run, we are going to pay through the nose for this....
-------------------- One is never completely useless. One can always serve as a bad example.
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So, NR, you are wanting the government to artificially force the price of gold to be like so many people think special relativity requires of the speed of light, that it be absolutely never changing, no matter what.
Couple of problems with that......
First, the speed of light isn't never changing. It varies with whatever medium the light is passing through and, when not within some medium, with respect to the effects of other electromagnetic beasties.
Second, if our government (or any other) tried to maintain your 1920 silver dollar at just $1 (i.e., a silver, not gold standard, by the way), it would have had to file for bankruptcy decades ago.
Third (yeah, I know I promised a couple, but I didn't say ONLY), there ain't enough silver or gold or both at once on or in the Earth to match the amount of 1920 dollars that are out there, not even bothering to mention including Euros and pesos and dinars and whatever else needs to be included.
In order for the world's economy to minimally contain enough money to even hope to try to feed its overblown population, there is no standard possible other than a trust in governments to maintain a reasonable value for money.
In fact, in order to return to a monetary system based on some commodity, while assuring that everyone would have a chance to eat close to regularly, it would first be necessary to do away with most of the people.
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quote:Originally posted by bdgee: So, NR, you are wanting the government to artificially force the price of gold to be like so many people think special relativity requires of the speed of light, that it be absolutely never changing, no matter what.
Couple of problems with that......
First, the speed of light isn't never changing. It varies with whatever medium the light is passing through and, when not within some medium, with respect to the effects of other electromagnetic beasties.
Second, if our government (or any other) tried to maintain your 1920 silver dollar at just $1 (i.e., a silver, not gold standard, by the way), it would have had to file for bankruptcy decades ago.
Third (yeah, I know I promised a couple, but I didn't say ONLY), there ain't enough silver or gold or both at once on or in the Earth to match the amount of 1920 dollars that are out there, not even bothering to mention including Euros and pesos and dinars and whatever else needs to be included.
In order for the world's economy to minimally contain enough money to even hope to try to feed its overblown population, there is no standard possible other than a trust in governments to maintain a reasonable value for money.
In fact, in order to return to a monetary system based on some commodity, while assuring that everyone would have a chance to eat close to regularly, it would first be necessary to do away with most of the people.
Exactly and that is why currencies "float" ...
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posted
Bdgee, I do agree, there are problems with a commodity based currency. However, IMO, bigger problems arise when you have a currency that ISN'T based partly on a commodity because there isn't anything REAL that gives the currency it's value.
As you said, a currency that is not based on a commodity requires that you TRUST in a government to maintain a reasonable value for it's currency. If you ask me? Placing that kind of trust in the government is foolish at best, and I believe a little research in the history of worldwide currency would prove me correct...
I'm not trying to suggest we keep 1$ of gold or silver on stock for every dollar the US government prints, but for heavens sake, lets at least try to keep something of value on hand to give our currency value otherwise it is only worth the paper we print it on, and it only has value as long as the population is ignorant and believes it does. If that belief falters, and there is nothing REAL to give the currency value, the system crashes.
Roosevelt's removal of the Gold standard opened the doors to a never ending printing spree at the FED that in the end, will only destroy our currency.
Without some kind of "Gold Standard", the dollar to me is worth about as much as a share printed by a pinksheet stock company that has unlimited authorized shares.
You guys can keep your dollars, they will come in handy one day soon when it costs more to buy wood that it does to burn your dollars in the oven for heat.
-------------------- One is never completely useless. One can always serve as a bad example.
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You guys are asking that a necessarily intricate and complicated system that works be replaced by simple and simple minded one that has repeatedly been proved unworkable.
I don't care how much you want it to be simple and straight forward enough to work, no monetary standard based, even in part, on any commodity has beer workable since the early 19th century for one simple reason......the world's population is too damned big.
You might as well be pinning to return to the days of heating and cooking only via fire wood. There are too many fires needed now and not nearly enough places to stack the necessary stores of stove wood.
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LOL.. i know i'm a hard head, but it could be done just as easily as what we are doing now..
it would be a completely different kind of economy with much less cash, lower pay and lower costs...
of course you wouldn't have been able to do Social Security, but we aren't going to be able to do it anyway; and much sooner than most people think, and did i mention that inflation wold have been lower...
taking us off the gold standard simply allowed the ultra-wealthy to become relatively even wealthier...
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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Of course it would work. What we have now is a fiat money system that will result in a collapse, as fiat money systems always do. The currency that we have now is based on nothing but the government's ability to extract taxes from Americans. Unfortunately, with all the entitlements we can't afford, the government can no longer cover expenses with taxes. That is why our debt it exploding. Regardless of the current bailout or anything the next president will do, we will soon have a major collapse due to our inability to pay the debt. Dilution of our money will soon result in runaway inflation and a wheelbarrow full of money won't be worth the price of a loaf of bread. When the public loses confidence in our money and people begin to refuse accepting dollars as payment for debts, then you'll know that the end has arrived!
The only good thing about all this is that we'll have an opportunity to start this country over in the correct manner. A currency based on gold and an end to entitlements that we can't afford will be the end result.
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Just won't work only worked in a old primitive world that all used it and traded in it. It was soon over taken by the paper script that capitalism needs to function.
But there have been many other things besides gold that were used as money or to back a currency. Slat,wine,and beer for instance.
-------------------- Wise men learn more from fools than fools from the wise.
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OK, it seems to me that some people are thinking that metal coins are needed to have a "backed" currency..
i am not saying that. i am saying that if we had gold and silver on deposit that the money represented, it would work. of course we can't make enough coins out of .9 silver...
silver and gold certificates would work just fine. and capitalism would still survive...
it would remove alot of this "voodoo economics"
if that sounds vaguely familiar? it should...
that's what Bush the First called Reagans trickledown, "supply side" plan...
that "plan" is what has ruined the economy.
you don't "inject" cash into the economy and "hope" that people will "grow" into it...
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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What do you do when gold goes up to $1000 an once and then falls to $100 once? Do you adjust your paper. Or do you freez the price of gold like we did at $35 an once no matter what the world market did.
-------------------- Wise men learn more from fools than fools from the wise.
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Shades of Herbert Hoover By: Phoenix Woman Monday September 15, 2008 10:59 am 15 diggs digg it
Abandoned house, NYC suburbs, 1940. "I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future."
-- E.H.H. Simmons, President, New York Stock Exchange, January, 1928.
Tell me if this sounds familiar:
Modern industry had the capacity to produce vast quantities of consumer goods, but this created a fundamental problem: Prosperity could continue only if demand was made to grow as rapidly as supply. Accordingly, people had to be persuaded to abandon such traditional values as saving, postponing pleasures and purchases, and buying only what they needed. “The key to economic prosperity,” a General Motors executive declared in 1929, “is the organized creation of dissatisfaction.” Advertising methods that had been developed to build support for World War I were used to persuade people to buy such relatively new products as automobiles and such completely new ones as radios and household appliances. The resulting mass consumption kept the economy going through most of the 1920s.
But there was an underlying economic problem. Income was distributed very unevenly, and the portion going to the wealthiest Americans grew larger as the decade proceeded. This was due largely to two factors: While businesses showed remarkable gains in productivity during the 1920s, workers got a relatively small share of the wealth this produced. At the same time, huge cuts were made in the top income-tax rates. Between 1923 and 1929, manufacturing output per person-hour increased by 32 percent, but workers’ wages grew by only 8 percent. Corporate profits shot up by 65 percent in the same period, and the government let the wealthy keep more of those profits. The Revenue Act of 1926 cut the taxes of those making $1 million or more by more than two-thirds.
As a result of these trends, in 1929 the top 0.1 percent of American families had a total income equal to that of the bottom 42 percent. This meant that many people who were willing to listen to the advertisers and purchase new products did not have enough money to do so. To get around this difficulty, the 1920s produced another innovation—“credit,” an attractive name for consumer debt. People were allowed to “buy now, pay later.” But this only put off the day when consumers accumulated so much debt that they could not keep buying up all the products coming off assembly lines. That day came in 1929.
The only thing that saved the capitalists from themselves was Franklin Delano Roosevelt, who put the brakes on Capitalism As Cancer and put government to work for the people, not just for war profiteers and office-seekers. But over the last few decades, the Republican ascendancy has led to the systematic and planned destruction of Roosevelt's safeguards, just so a tiny minority of extremely greedy and amoral people could benefit.
Because of this recent greed-is-good amorality, we're now seeing a rerun of the runup to 1929:
Rising income inequality fueled by slashing taxes on the rich.
Growth in productivity not matched by growth in real prosperity for the vast majority; only those at the very top reap the benefits.
The non-rich majority being encouraged to spend money they didn't have to prop up the whole edifice, until they lost their jobs and couldn't even begin to pay back the huge debts their "betters" had all but ordered them to rack up.
Oh, and even as the house of cards collapses one domino institution at a time (Lehman, Bear Stearns, AIG, etc.) , the people behind the whole scam are sending out their mouthpieces to put a happy-talk spin on everything, to the point where they mock those people who've been the first ones smacked around by the bow wave of the coming crash as "whiners".
Bush's and McCain's minders were hoping that Bernanke and Paulson could forestall the collapse until after the election. It looks like that might not be possible. This is one bullet they won't be dodging.
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quote:Originally posted by raybond: What do you do when gold goes up to $1000 an once and then falls to $100 once? Do you adjust your paper. Or do you freez the price of gold like we did at $35 an once no matter what the world market did.
the price of gold would be set by the amount of currency that it represents...
-------------------- Don't envy the happiness of those who live in a fool's paradise.
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quote:Originally posted by T e x: What's the big deal about gold?
Dental work? Electronics?
In other words, why not diamonds?
Why not intellectual property?
Gold?
It doesn't corrode or decay which makes for good store of value. It is easily divisible thus it is easy to exchange. It is rare which helps prevent forgery or fraud. It has been a recognized and accepted form of currency for thousands of years.
All of those characteristics make for a good currency.
Believe it or not, even Alan Greenspan, was FOR the "Gold Standard" back before he became FED chairman.
quote:Originally posted by Propertymanager: Of course it would work. What we have now is a fiat money system that will result in a collapse, as fiat money systems always do.... Unfortunately, with all the entitlements we can't afford, the government can no longer cover expenses with taxes. That is why our debt it exploding....A currency based on gold and an end to entitlements that we can't afford will be the end result.
You really are a one-trick pony aren't ya PM?
quote: the price of gold would be set by the amount of currency that it represents...
Glass? That sounds a hell of a lot like stock. You and I both know that can be manipulated just as easily as cash.
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"Might as well use barrels of salt or purple dye"
At times both have been used, salt in various parts of the world at various times and purple die was once used in the Roman Empire as well as in some later European countries, wherein it was also illegal for certain classes to wear clothing that was purple......only for the "elite" and powerful.
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Or to stay true to our American history perhaps we should use wampum?
LOL Seriously though I would like glass to explain his idea in more detail. Cause I still don't get how it could be expected to work in today's electronic society.
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