2020 Economic Adjustment: How Severe?

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After the Dow Jones peaked in 1929, the index fell during the Great Depression ...

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Note when it starts to rise and the steady growth in the 30's

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Top 10 New Deal Programs of the 1930s

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To Act or Not to Act

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Herbert Hoover was the sitting U.S. president when the stock market crash occurred in 1929, but he felt that the government should not take stringent action to deal with heavy losses by investors and the subsequent effects that rippled throughout the economy.

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Franklin D. Roosevelt was elected in 1932, and he had other ideas. He worked to create numerous federal programs through his New Deal to help those who were suffering the most from the Depression. Besides programs built to directly help those affected by the Great Depression, the New Deal included legislation intended to correct the situations that led to the stock market crash of 1929. Two prominent actions were the Glass-Steagall Act of 1933, which created the Federal Deposit Insurance Corporation, and the Securities and Exchange Commission, created in 1934 to be a watchdog over the stock market and police dishonest practices. The SEC is one of the New Deal programs still in effect today. Here are the top 10 programs of the New Deal.

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1. Civilian Conservation Corps (CCC)
2. Civil Works Administration (CWA)
3. Federal Housing Administration (FHA)
4. Federal Security Agency (FSA)
5. Home Owners' Loan Corporation (HOLC)
6. National Industrial Recovery Act (NIRA)
7. Public Works Administration (PWA)
8. Social Security Act (SSA)
9. Tennessee Valley Authority (TVA)
10. Works Progress Administration (WPA)

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... and didn't fully recover until 1954, 25 years later.

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The economy for the workers recovered sooner than the stock market (which is not a measure of worker economy) Capitalism is not fair to workers unless they unite. As Bernie says "together we win"Enjoy

Just to elaborate on this point, between 1946-1952 the *actual* economy (not the DJIA) boomed like no one has seen before or since. This is why:1. Wartime rationing and constantly shilling of war bonds caused huge amounts of personal saving, since spending opportunities were limited.
2. Returning veterans (some 11 million) also had some limited savings and caused an immediate upsurge in demand for products.
3. Dunning the Europeans for all that money loaned during WW2 kept the nation solvent.
4. The nation was relatively undamaged since the war was almost entirely fought outside of its main territory.
5. Republicans and Democratic centrists had not yet partially destroyed FDR's legacy (they didn't start until 1980 at the latest).What evidence do I have?1. Father 1908-1995; Mother 1924-2008. Every adult and nearly every adult relative in my childhood was a WW2 Vet and lived through the Great Depression. I received an earfull growing up.
2. Books.Edited by anglagard, : Clean up spacing.Edited by anglagard, : No reason given.

Also add that the average worker was in a union, and the wages were sufficient for one worker in a family to earn enough to support a family, own a car, and get a mortgage on buying a house.Enjoy

A house, a car, and new things like a refrigerator instead of an ice box and an electric range and dish washers and TV and washer/dryers.

Not too many analysts are optimistic about the economic future of the United States. About the only thing you called was that the bill Will Get Paid. My retirement is virtually wiped out, all I have is social security and a modest pension which could also evaporate, and the only solace I have is that many will share my boat. I know you always laugh at Biblical Literalist prophecy and predictions---you claim that it is silly and unproven. All I can say is that for many older Americans, surviving the coronavirus is just the first step. Avoiding homelessness is a real possibility.

And again, that is totally up to you and the other US citizens. You get what you want. If you support a government that has empathy for the least of these then your retirement would be secure. If you support a government that says "let the old die if they have not prepared to take care of themselves" then yes, it will be out with the poor old and in with the new rich.There is a reason that concierge health services and food services and private planes are doing very well during this period.The rich are important and favored by God.AbE:Here is a relevant recent article that may help explain the reality of the current situation.‘White-Collar Quarantine’ Over Virus Spotlights Class Divide - The New York TimesAbE2:Here is part of the back story regarding pandemic preparedness.The U.S. Tried to Build a New Fleet of Ventilators. The Mission Failed. - The New York TimesEdited by jar, : see AbEEdited by jar, : AbE2

The market is attempting to rally and is up slightly today, but I fear that upcoming events will prove to be the nails in the coffin. But where will the money come from to provide secure retirements? They cant simply keep creating money out of thin air to ease the economic impact of COVID-19. The global economy will have to reopen in order to prevent a global depression. I predict several things:

China will emerge from this as the global superpower 5 years ahead of schedule.

The US Dollar will tank and we will have as tough of a time as anything they had during the Great Depression

Even if the armageddon bunch is hopefully wrong, our environmental damage is increasing alarmingly and the global warming ecological predictions will likely come true in the worst possible way. This pandemic is only the beginning of many upcoming global challenges. And again I ask for an answer: Where will the relief money come from? We have basically used up our bag of tricks. The Bill Will Get Paid and it will hurt a lot of people.

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The only way I know to drive out evil from the country is by the constructive method of filling it with good.Calvin Coolidge
"A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
As the fear of God is the beginning of wisdom, so the denial of God is the height of foolishness.-RC Sproul, Essential Truths of the Christian Faith

- You can safely assume that you've created God in your own image when it turns out that God hates all the same people you do. Anne Lamott
Believe those who are seeking the truth. Doubt those who find it.~Andre Gide

The bill will get paid. How much people get hurt depends directly on how they decide during the upcoming elections. It's not a matter of creating money, it is a matter of how money will be allocated and used.So far ALL of the evidence is that we have decided to make the rich richer, to enrich those who own the oil companies and screw the workers, to reduce wages for the average person and grant tax releif to those earning over a million dollars a year.It really is that simple Phat. We will get the world we decide to build.

And what I'm saying is that with a likely Depression and job losses coming, we simply don't have the money to do anything. Unless we somehow tax it back from the rich. And they can simply move. The Dollar itself will; be the next bubble. We likely will see inflation take off just when we all need to buy things.

Actually, considering we are not on the gold standard anymore, most Fiat currencies can just be poofed into existence. We just conjured up $2 trillion out of thin air. (More or less) Funny how when we want universal health care and better education subsidies, there is no money to be had. But the moment corporations and banks are threatened, it seems money just magically manifests. Yes and no. Our dollar is in no more danger than any other currency in the world. Ultimately, if you see deflationary pressures, the dollar value will increase. The Fed will offset that by poofing money into existence to create an equilibrium. Not a guaranteed strategy, but its the only option they have.The big issue is the severity and duration of the downturn. We've been shut down now for almost a month (most places). Some states will likely carryover into May as well to extend their downturn. Although based on the projections I am seeing and the sentiment of people, I think any shutdowns passed May 15th are unlikely. With the exception perhaps of New York City.Certain sectors will likely come back slowly. The restaurant chains that survive will being to start to recover. Businesses that are essential or can accommodate remote workers will likely absorb the downturn better.
The main damage I see is the travel and tourism sectors. Along with potentially some of the entertainment sectors like movie theatres. I think people will be far more tepid to want to go on a cruise, go to Disneyland or get on an airplane unless they absolutely have too. Families with children will likely opt for road trips instead. Something that allows them more isolation capabilities.Of course, this is all just conjecture on my part. Time will tell.

And what if any connection to reality is there in that statement?Money is simply not an issue; the distribution of money is an issue. How wealth gets distributed is a political issue.If US citizens elect representatives at all levels that will work toward redressing the wealth distribution in the US then there needs to be little or no pain.If US citizens elect representatives at all levels that will not work toward redressing the wealth distribution in the US then there will be massive pain for those not among the "elect".It's totally up to you and other American citizens to decide just how painful you wish things to get.

Agreed, but add to that the fact that the US was pretty much the only industrial nation that was not bombed out and physically devastated by the war. While everybody else was having to practically (if not literally) rebuild their industry from scratch, all we had to do was retool our factories which were already in very good shape from years of wartime production. As a result, we were able to dominate the global market. Now we have so many competitors.We used to be able to keep our manufacturing jobs within our country, which at first was almost a no-brainer since we pretty much had the only functional factories. Now most of those jobs have gone overseas where labor is cheaper.We also were operating under sane and more realistic economic models and policies (as far as those adjectives can be attributed to economics). Now since 1980 we're being afflicted with an insane and unrealistic economic model, "supply side", which is ruining the actual economy.And, to agree with RAZD in Message 18, we had strong unions who helped to contribute to strengthening the actual economy leading to the growth of the middle class, which in turn led to the growth of small businesses and all other segments of the economy. Another effort that started in the Reagan Administration has been the GOP campaign to destroy the unions -- one key tactic has been to ignore the law and stop prosecuting employers who break the law by hiring undocumented workers (eg, in construction).BTW about me and unions. Having been military and then a software engineer, I've never belonged to a union. For a long time I was antipathetic towards unions because of how they treated my father -- as a general contractor, he had to pay union dues in order to be able to work alongside union carpenters, but he could never draw any benefits because he was management. However, the more I've looked into it, the more I've come to realize the positive contributions that unions have made (as well as the downside0 and the negative consequences on the actual economy that have come from breaking the unions.

The question is: Who will it be paid to?If it's the rich who get paid, yes, the poor will get hurt. We need to hire politicians who can figure out more creative ways to pay the bill.

While republicans embrace the killing of thousands every day in a vain attempt to spur the economy the facts are this is not going to work.This is Jim Yong Kim, past President of the World Bank. He was instrumental in fighting the financial battles during the SARS, MERS, HIV/AIDES and Ebola pandemics.Why the World Bank ex-chief is on a mission to end coronavirus transmission

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No one in the field of infectious disease or public health can say they are surprised about a pandemic. But what I just couldn’t believe was that after the first cases of community transmission, in Washington state, folks were saying it’s too late for containment. What surprised me is just how quickly we gave up on the standard shoe-leather-epidemiology approach to fighting epidemics that has been in place for hundreds of years.
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I spent seven years at the World Bank. So, I’m a finance guy. I can tell you it makes absolutely no sense to keep putting trillions of dollars into a stimulus package and not put hundreds of billions into the one thing that will stop the financial crisis. The thing that will stop the financial crisis is getting the virus under control.

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By "getting the virus under control" Dr. Kim is talking about testing, tracing and isolating.But even though this would be the best, fastest route to economic recovery, it is not fast enough for the blood lusting capitalist oligarchs in the Republican party. They would rather sacrifice thousands of Americans per day now than see any negative impact to their quarterly reports.Meanwhile, the Orange Bastard continues to push poison and deadly "cures" like irradiating your body with powerful UV rays and drinking and injecting surface disinfectants.The man is an absolute ass.Edited by AZPaul3, : No reason given.

Kinda, sorta. The man is brilliant. We have a massive UV light generator that is freely available to everyone. It's super reliable and available worldwide. But when Governors tell folk to go ahead and swim and enjoy the UV generator he can say, "Sorry, you move too fast and did not follow the guidelines so all the damage will be YOUR fault."And as he says. "It might work. It might not work"Edited by jar, : to ---------> too