Congressman: “If We’re Not Very Lucky Or If We Don’t Do Everything Right, We Could Easily Have A Ten- Or Fifteen-Year Depression”

Congressman Jerry Nadler told Democracy Now today:

The economy is on the brink of an absolute catastrophe. I’ve been saying for six or seven months now that we’re in 1931. In 1931, a recession that started with the Crash of 1929 tipped into a fifteen-year depression. We are on the precipice of that. If we are very lucky and if we do everything very right from now, we will probably have a two- or three-year very bad recession. If we’re not very lucky or if we don’t do everything right, we could easily have a ten- or fifteen-year depression, a repeat of the 1930s.

While many other people have warned of a depression, including the IMF, the National Bureau of Economic Research, Spain’s central bank, and some of the economists who predicted the financial crisis, the length of a depression discussed by Nadler is stunning.

The government is obviously not doing “everything right”, so Nadler’s warning doesn’t really contain much wiggle room.

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  • The very first thing that must happen is for us to abandon the Free Market theory that got us to this point. As shown by the reaction to the auto bailout by some countries who raised import tariffs on our goods, in a free market we ain’t. Secondly we can stop giving money to the banks and other crooks who created the problem. It would be nice to think you could buy the mortgages back and turn them into direct government loans as we did in 35, except we can’t they have been sliced and diced to the point they either can’t be undone or won’t be.To foster the return of our industrial base we need to place tariffs on all manufactured goods we want to make here as we did for 200 years. This would increase our tax base and rebuild our industrial base. Sure it would cost us more to live.But we can take care of that by raising to minimum wage to the level of a living wage. At least double the present level and maybe more. Put in force regulations that prevent wild inflation and speculation that caused this problem. I would go as far as making derivatives illegal.The last 30 years but particularly the last 10 have proven beyond a shadow of a doubt removing regulations to place limits on operations will create careless actions in all phases of the marketplaces.

  • The federal parasites need to undo everything right.

  • Sorry Tiger…you’re wrong about a free market theory being responsible for this mess. We haven’t had a free market since before a private banking cartel gained control over currency creation and monetary policy. Creating paper money out of thin air that is not backed by anything but “faith in the system” and a monetary policy of perpetual debt to banks is a giant ponzi scheme that has always been doomed to failure. The more of something there is, the less it is worth. By its very nature the Fed creates inflation and deflation with its “fractional reserve” system. The “Federal” Reserve is as federal as Fed-Ex. When the government gave up its Constitutional duty in creating and issuing currency to a private bank, it wiped out years of true market freedom and progress. Couple that with taxation without representation, sending jobs overseas, market manipulation with no prosecution, laws that make small business startup and success all but impossible, and no gold standard and you have what we have today, with the worst yet to come. No thanks to the education system that is mum on the fact that the greats like Jefferson, Jackson, Lincoln, etc. knew that this is exactly what would happen if private banks were ever given such broad powers. America became the most prosperous country in the world without central banks, income tax, or exessive government regulation. Manufacturing and import tariffs are old-fashioned, apparently. Then so is wealth, opportunity and prosperity for all Americans.

  • A free market system without any kind of noblesse oblige is just economic rape. If the government was to give everyone a bailout by reducing taxes by 25%, the gougers from the worlds of real estate and fuel would promptly swallow it and demand even cheaper labor through unfettered illegal immigration.

  • I’m still waiting for a sign that shows me that we can compete with Chinese labor. A country without a manufacturing base will not thrive. I’m not in love with the Federal Reserve either and theoretically a return to the gold system would create stability.When investing your Austrian School literature I see many , many comparisons to the Chicago school theory. A theory that has destroyed more countries than you can count.I was attracted to Ron Paul when he was running for prez and his plans for money, and war stance and a few other things were good. However when you get to no (little) regulation, the system rewards only those with the money. the Austrian system seems to put little value on the labor input and that bothers me. Leaving things like medical care , retirement plans in the private sector just takes advantage of the worker bee.I am a lite weight on the Austrian School Theory so I’m waiting to be convinved that it is any different than the Chicago School Theory.

  • The differences, besides the Austrians’ no-compromise stance on hard money, is that the Austrians do not believe in the use of violence (especially the central government’s monopoly on the use of force) to affect economic, political, or social change. For instance, they oppose the imposition of “capitalism” by the government, while most Chicagoites don’t. An example would be the tragedies of Chile and other S. American countries (of course later on, Friedman realized this flaw). Austrians oppose the use of inflation at all, period; the Chicagoites believe that inflation (which is violence in the form of taxation through the destruction of wealth) can be used “if the government is restrained” (but of course, as we have seen in our lifetimes, this is a naive and impossible hope). Chicagoites are not necessarily free-marketers, but the Keynesians are even worse: they are mercantilists and national-socialists posing as capitalists (barely an iota of restraint on the central government’s power to “manage” the economy; we’ve seen the wonders their philosophies have done to our economy since the turn of the 20th century, and let’s not mention the fate of Soviet Russia, Zimbabwe, et al., ad infinitum). Partial free-market will not work. Lifting a few unconstitutional “regulations” (a.k.a., corporatist favoritism within industries) will not work. The Federal Reserve Act, the 16th and 17th Amendments, must be repealed. The programs of the New Deal, the Great Society, and others must be either abolished or moved to the state and local levels. And, of course, eliminating the empire and standing army is a must. Spend+debt+inflate+consume=oblivion. Save+sound money+produce=prosperity. Some Chicagoites believe the insanely idiotic notion that wars bring prosperity, while all Keynesians seem to peddle it. With people like Congressman Nadler in control of the federal government, we are doomed to more Keynesianism and pseudo-free market corporatism. BTW, Nadler, in that Democracy Now! transcript, contradicts himself embarrassingly, multiple times, on presidential power and the economy, while pushing long-debunked Keynesian theses; which, by their nature, are typically self-contradictory anyway.

  • I have real problems with the Austrian theory to either eliminate or move to state control of the New Deal Programs. Before SS for instance over 80% of seniors lived in poverty after about 10%. Every other industrial nation has national health care which in my mind does a couple of things 1. it makes free markets impossible because the companies in the US cannot overcome the cost of health care. 2. it gives their people security and piece of minds and fiscal security throughout their lives. Free markets sound good but I do not see how the People in the US can earn a living wage while in competition with the Chinese. Free markets let countries like China put dangerous stiff in food or toys. Uninhibited corporations have demonstrated time and time again left unregulated they will eventually implode as evidenced right now. I’m open to being convinced that some different economic plan would work better and the Austrian plan with basic security for the working bee might work. When you say just do away with SS I think you have the obligation to show a replacement or a willingness to go back to object poverty in your old age. You cannot provide all these things on 46K or less and that’s 50% of the country

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