I thought the problem stemmed from ignoring Keynes at Bretton Woods and following Harry Dexter White to hell.

As regards Keynsian economics, must say that most of my farm life before and after army service during WW2 existed under Keynesianism.

Further, although during my retirement our familycompany has grown successfully, also as a political scientist have not been particularly happy as the safety of Keynesianism ended with what has been termed the greedy get big or get out phase, including the associated boom propped up so much by what social scientists have called both quarry economics and the resultant pitstock politics which anyone with any historical sense knows could never last.

Indeed the language alone should have been a warning.

Terms like free market associated with scary words like need and greed with the term deregulation sounds like letting all the shysters out of gaol and letting them have a free go - which certainly has happened.

Certainly Adam Smith, so-called father of Laizess-faire knew what he was talking about when he said that unfair competition gives its own warning.

But all I ever get is the worry that the good times can never last.

Have Fun, BB, Buntine.

Keith in Perth
"US GNP was 34% higher in 1936 than in 1932 after FDR's new deal. Unemployment fell in FDR's first term, from 25% when he took office to 14.3% in 1937."

These figures by themselves don't show that the Yanks were out of the depression, just that they were somewhat better off. After all, 14.3 percent unemployment is not good in anyones language. It wasn't until the war got underway that things really improved.

David

Shal
"But that pain = wholesale social dislocation, families torn asunder, a potential resurgence in fascism caused by resentment at the economic collapse?
Not only is this politically unacceptable. It is socially and morally unacceptable."

It is important to understand that the social dislocation takes place in the boom, when capital and labour flow into the bubble caused by new money entering a sector of the economy. The new money - created by government lowering interest rates - causes inflation as those with the new dollars are able to bid up prices. Classic example is the sub-prime bubble leading to the housing bubble.

The boom causes the malinvestment, only the bust makes it apparent. The supply of newly printed money makes investments appear to be profitable which, absent the rising prices, would be seen to be loss-making. Eventually the boom comes to an end, because society's supply of capital - real capital such as trucks, machine tools and bricks - is unequal to the old demand plus the demand set off by the new money. There is a need to rationalise scarce credit between competing possibilities. The process for discovering which investments are non-viable, is the process of profit and loss. This then shows that many of the activities funded during the boom, are in fact loss-making.

The social dislocation, unemployment, hardship, and tendency to fascism must be stopped where it started. What is morally unacceptable, and should be socially and politically unacceptable, is government's monopoly control of the money supply. It should be abolished.

The author was wrong in saying that there is a need to regulate against stupidity. It was the belief that government knows better that caused the entire problem in the first place. It is important to understand that governmental intervention can only make the problem worse and longer, and *is not capable* of making it better. If it was, the problem wouldn't exist in the first place.

And of course the boom caused many problems for the lowly paid. The boom was not a boom for them. It even caused the 'working homeless' syndrome. How can it have been a boom when people with jobs could not afford a place to live?
And we will probably just do it all over again.
Look at Keynes and learn from someone who at least had a glimmer of an idea about what he was doing.

Thanks,Daviy, concerning giving credit to Keynes, and must say that we are backed by many social scientists, though not sure about our modern business managers who probably as in the Roaring Twenties, saw the recent boom as never ending or rather never bursting.

Further, as simply just fiddling with interest rates to fix the problem, it is only the lesson of going broke that can cure the business recklessness caused by seemingly simple economic terms like deregulation which means simply to go ahead and be reckless with your spending.

Cheers, BB, WA.