Tuesday, October 5, 2010

Graph Points To A Depression

The nearby chart is an update of one I showed on this page in early July. It depicts how the stock market over the last year and a half has followed a path eerily similar to that of 1937. This week corresponds on the chart to mid-August 1937, when the cumulative effects of massive hikes in personal and corporate tax rates, severe monetary tightening, and aggressive business-bashing by the Roosevelt administration tipped the economy into the "depression inside the Depression." From there, stocks were in for the longest and second-deepest bear market in history.


Thankfully, we're not repeating all the mistakes of 1937. But Congress and the Obama administration are flirting dangerously with one of them by failing to extend the expiring low tax rates for all Americans. What's worse, we're close to repeating the mother of all policy errors, the one made not in 1937 but in 1930—the one that started the Great Depression. We're on track to resurrect the 1930 Smoot-Hawley Tariff Act.


  1. interesting. monetary tightening and higher taxes=austerity measures and higher taxes-coming to USA in 2011? or QE to infinity doller debasement and a mix on taxes/fee's...who knows, either ways-bad, very bad. no easy way out huh

  2. History as the economic chart shows is repeating itself ,the second tome as farce.

    The 'expert" economist propagandist claims to have the correct solution to the crisis by sticking to the "Right".

    But ,both economists solutions,'right" austerity and new deal keynesianism type stimulus were tried in the last depression and nether economic periods got americans back to work.

    Only a war economy its production first kick-started by the transfer of the British empires gold reserves and other british assets and then later by extending credit for 'lend lease' war credits ,put america back to work.

    The recovery after the war was only because the industrial competitors were knocked of the game and profitable export markets for American goods could be found.

  3. There's also the fact that we are on this shitty fiat currency now. You can't really compare the two, this country is a joke now.

    The solution isn't to cut taxes on corporations and let them continue to outsource everything while defrauding US consumers. The solution is to fuck over every corporate office overseas so hard that they are forced to have jobs in the US. The global economy is a farce and all it does is drain money out of an already drained country.

    No rational, intelligent, true American can believe in either the fiat or outsourcing. It's ironic how India and China refuse to allow their work to be outsourced but the US will just laugh at its jobless citizens and tell them taxation is the problem. There is no way that American workers can compete with third world workers in the wage department. The only way to even the playing field is to tax these corporations, they AREN'T taxed and that's the problem.

  4. Let's just be careful not to lose sight of things. This is a resilient economy and we may have seen our worst days behind us (I hope). If we get too caught up, everyone is going to need depression treatment therapy and then where will we be?

  5. It is at this point a fact that the start of this hasn't even begun... Herb Dean.

    What the fuck? lol, are you being a joker?

  6. Herb Dean aparently has a seat on Benankes money dropping Fed helicopter.

    He got the 'resilient economy" line from istening to talks from the last president bush on the great innovative American banking system.

    But now,being a non-partisan realist , reads his 'Confidence" talk from the creen a TBTF bank sponsor installed Obama brand telepromter on the helicopter.

    In this way by paying attention to reading from the official script on the telepromtor, the growing lines of unemployed and those on food stamps are never ever visible below and so herb is never, ever needing treatment for depression.
    He recomends this non-parizan course of confidence building propaganda to all.

    The american dream will live forever and can never die in insolvancy.
    Right Herb?

  7. why is this site linking to articles from Stormfront? Is there something we should know?

  8. What's wrong with revisiting the 1930 Smoot-Hawley Tariff Act? The United States must impose stiff duties on all imported goods and services, and it's long overdue. Moreover, this is the only sure fire way of restoring our manufacturing base along with the good paying jobs. Contrary to popular thought, the 1930 Smoot-Hawley Tariff Act was not responsible for the Great Depression nor did it aggravate it. The level of trade between the United States and its other trading partners at that time was simply too low as to have any measurable effect on the economy. Protectionism is the answer and always was.

  9. When will people realize IT IS NOT ABOUT "MONEY" they don't need money they do what they want and what they want is population controll. They print the money, corporations are all in debt, just be happy to live another day.


Everyone is encouraged to participate with civilized comments.