"'So it seems that we aren't going to have a second Great Depression after all,' wrote New York Times columnist Paul Krugman last week. 'What saved us? The answer basically, is Big Government. ... [W]e appear to have averted the worst: utter catastrophe no longer seems likely. And Big Government, run by people who understand its virtues, is the reason why.' This is certainly a novel theory of the business cycles. To be taken seriously, however, any such explanation of recessions and recoveries must be tested against the facts. It is not enough to assert the US economy would have experienced a 'second Great Depression' were it not for the Obama stimulus plan. ... But the federal government didn't slash spending in the early '30s. ... Christina ... Romer also noted that 'recessions have not become noticeable shorter' in the era of Big Government. In fact, she found the average length of recessions from 1887 to 1929 was 10.3 months. If the current recession ended in August, then the average postwar recession lasted one month longer--11.3 months. The longest recession from 1887 to 1929 lasted 16 months. ... And bankers had no [Fed] to bail them out until 1913. Yet recessions after the Fed was created soon turned out to be much deeper than before (1920-21, 1929-33, 1937-38) and often more persistent", Alan Reynolds at the WSJ, 21 August 2009, link: http://online.wsj.com/article/SB10001424052970203863204574347000967657192.html.
As Yves Smith would say, creating longer, deeper recessions is a Fed "feature, not a bug". Kill this monster. Bankers had no Fed? Does the Fed encourage them to take risks they otherwise wouldn't? What other responsibility has the Fed? Creating inflation. From 1792-1913, the US "price level" was stable. Since 1913 the dollar's gold value has declined 97.9%. Was this by mistake or design?
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From Wikipedia.
"The Pujo Committee was a congressional subcommittee which was formed between May 1912 and January 1913 to investigate the so-called "money trust", a small group of Wall Street bankers that exerted powerful control over the nation's finances. After a resolution introduced by congressman Charles Lindbergh Sr. for a probe on Wall St. power, Arsène Pujo of Louisiana obtained congressional authorization to form a subcommittee of the House Committee on Banking and Currency. J. P. Morgan, George F. Baker, and other financiers testified."
Remember the recent story about Rahm Emanuel planning to attend the board of directors meeting for JP Morgan?
Does Emmanuel understand he is just a little tool of the banks? Or does he really think that JPM and GS really should be helping make the decisions about governing this country?
And the Federal Reserve is just another part of the axis...
The Federal Reserve is minion to Wall Street... they give lip service to the "real economy" but it's using the banks to intermediate monetary policy and increasingly fiscal policy.
Yes... audit the Fed now... it was disgraceful to see the Inspector General of the Fed testify in Congress. She was clueless.
Bring Pujo back from the grave. Give us an account of this monster.
The Feds job is to make our wealth theirs.
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