Tag Archive | Great Depression


In the first part of this post I mentioned possible solutions to the moral hazard problem with banks. I forgot to mention what I think should be done right now in order to stabilize our financial system. The pressing problem with our financial system is that banks are massively undercapitalized. The relation of debt to […]

How To Handle The Great Recession, Part I

September 2008 will go down in history as the start of long period of economic disturbances. As of July 2010, we are still right in the middle of the greatest economic crisis since the 1930s. Some people compare our current situation to the summer of 1931, when a worldwide serious of bank closures turned a […]

Have We Learned Anything From History?

Remember one of the mistakes of Herbert Hoover, President of the USA during the Great Depression 1929-1933? He raised taxes during a depression, thereby reducing consumption and increasing the speed of the deflationary spiral. Fast forward to 2011:  Obama and the democratic Congress will let the temporary Bush tax cuts expire, effectively increasing taxes heavily […]

Das wird noch richtig hässlich

Griechenland bettelt nun um Hilfskredit bei anderen Euro-Ländern. Sollten sie genehmigt werden, wäre das Land erstmal von steigenden Zinsen befreit und könnte weiter schön Schulden machen. Ist damit die “griechische Tragödie” zuende? Nein, bei weitem nicht! All diese Hilfsmassnahmen betreffen nämlich nur die Staatsschulden. Was aber ist mit den privaten Schulden?

You Will Pay Anyway

Regarding the financial crisis: Many people think that Bush, Obama, and the Congress made tax payers pay for the banks in order to rescue them. This is correct, but if the banks hadn’t been rescued, tax payers still would have paid for them. How, you ask? Well, guess whose checking account would have been closed […]

Da kommt die Depression…

Die Griechen legen mit dem Sparen los. Und die Wirtschaft geht den Bach runter, aber richtig. Mal sehen wie lange die das aushalten werden, ehe sie dann doch lieber aus der Eurozone austreten wollen… Wird jedenfalls ziemlich hässlich. Und all die Leute, die jetzt in den Nachrichten sagen, dass Griechenland über’n Berg ist, werden sich […]

Worse Than The Great Depression?

Who’da thunk it? If Bernanke and his gang wouldn’t have rescued BofA, Citi, and Wachovia, the total amount of deposits lost would have been far higher than in the Great Depression of the 1930s. Imagine what could have happened, if Bernanke, Paulsen, Geithner and others weren’t there to rescue everybody. We would have lost Bear […]