Who was Charles Ponzi?
Who’s really running Ponzi schemes?
The Rise and Fall of the Dollar: 1800-2009
HT Mises.org
Listen here to the United States Declaration of Independence, authored primarily by Thomas Jefferson, and adopted by the Continental Congress on July 4, 1776.
President and World War II General Dwight D. Eisenhower warned against the “military industrial complex” in 1961:
“The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes.”
He advised this defense:
“Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.
“Only an alert and knowledgeable citizenry…”
Tagged as:
history
This WSJ cover from March 30, 1999 (via mokoyfman.com and others) features “Dow Industrials Top 10000” and “If This Is a Bubble, It Sure Is Hard to Pop.” Wa wa.
“The Dangers of Printing Money” via Time:
Forget toys: with as many as 4.2 trillion marks to the dollar by late 1923, German children played in the streets with worthless money.
Happy Anniversary, America!»
76 years ago today, President Roosevelt signed into law a bill passed by the US Congress that outlawed gold held by citizens. Keep in mind that private ownership of gold was not decriminalized until the 1970’s.
Here is an excerpt from Wikipedia on the Emergency Banking Act of 1933:
The Emergency Banking Act (also known as the Emergency Banking Relief Act) was an act of the United States Congress spearheaded by President Franklin D. Roosevelt during the Great Depression. It was passed on March 9, 1933. The act allowed a plan that would close down insolvent banks and reorganize and reopen those banks strong enough to survive.
On March 5, 1933, the day after Roosevelt’s inauguration, he called a special session of Congress which instituted a mandatory four-day bank holiday. This act provided for the reopening of banks after federal inspectors had declared them to be financially secure.
The bill also gave the Secretary of the Treasury, William Hartman Woodin, the authority through an amendment to the Trading with the Enemy Act to confiscate the gold of private citizens, excluding dentists’ and jewelers’ gold and “rare and unusual” coins. These citizens received an equivalent amount of paper currency which was subject to later devaluation with relation to gold. Ultimately, the US dollar was devalued by approximately 40%, ending the deflationary spiral the American economy was experiencing.
Within 3 days of the act’s passage, 5,000 banks had passed inspection and were reopened. Roughly two-thirds of U.S. banks quickly reopened under this act, and faith in banking institutions was somewhat restored.
This act was a temporary solution to a major problem. The 1933 Banking Act passed later that year presented elements of a more permanent solution, including formation of the Federal Deposit Insurance Corporation (FDIC).
For additional info, see also:
A Reading List on the Great Depression»
If you believe that markets generated the Great Depression and that government intervention via the New Deal and other programs ended the Great Depresssion, you’re doing it wrong.
from The Austrian Economists: "How Corrupt is Our Language in Economic Discourse?"»
a great read. spot on.
Robert Higgs in the CSM yesterday:
Instead of stimulus, do nothing — seriously.
Stimulus is unconstitutional. And history shows that the economy can recover strongly on its own, if politicians stay out of the way.
Until the 1930s, the Constitution served as a major constraint on federal economic interventionism. The government’s powers were understood to be just as the framers intended: few and explicitly enumerated in our founding document and its amendments. Search the Constitution as long as you like, and you will find no specific authority conveyed for the government to spend money on global-warming research, urban mass transit, food stamps, unemployment insurance, Medicaid, or countless other items in the stimulus package and, even without it, in the regular federal budget.
This Constitutional constraint still operated as late as the 1930s, when federal courts issued some 1,600 injunctions to restrain officials from carrying out acts of Congress, and the Supreme Court overturned the New Deal’s centerpieces, the National Industrial Recovery Act and the Agricultural Adjustment Act, and other statutes. This judicial action outraged President Roosevelt, who fumed that “we have been relegated to the horse-and-buggy definition of interstate commerce.” Early in 1937, he responded with his court-packing plan.
Although Roosevelt lost this battle, he soon won the war. As the older, more conservative justices retired, the president replaced them with ardent New Dealers such as Hugo Black, Stanley Reed, Felix Frankfurter, and William O. Douglas. The newly constituted court proceeded between 1937 and 1941 to overturn its anti-New Deal rulings, abandoning its traditional, narrow view of interstate commerce and giving the federal government carte blanche to spend, tax, and regulate virtually without limit.
After World War II, the government enacted the Employment Act of 1946, codifying the government’s declared responsibility for managing the economy “to promote maximum employment, production, and purchasing power,” and it has actively intervened ever since, purportedly to attain these declared ends. Its shots have often misfired, however, and we have endured booms and busts, a decade of stagflation, bouts of rapid inflation, and stock-market crashes. The present recession may become the worst since the passage of the Employment Act.
Federal intervention rests on the presumption that officials know how to manage the economy and will use this knowledge effectively. This presumption always had a shaky foundation, and we have recently witnessed even more compelling evidence that the government simply does not know what it’s doing. The big bailout bill enacted last October; the Federal Reserve’s massive, frantic lending for many different purposes; and now the huge stimulus package all look like wild flailing – doing something mainly for the sake of being seen to be doing something – and, of course, enriching politically connected interests in the process.
Our greatest need at present is for the government to go in the opposite direction, to do much less, rather than much more. As recently as the major recession of 1920-21, the government took a hands-off position, and the downturn, though sharp, quickly reversed itself into full recovery. In contrast, Hoover responded to the downturn of 1929 by raising tariffs, propping up wage rates, bailing out farmers, banks, and other businesses, and financing state relief efforts. Roosevelt moved even more vigorously in the same activist direction, and the outcome was a protracted period of depression (and wartime privation) from which complete recovery did not come until 1946.
The US government has shown repeatedly that as an economic manager it is not to be trusted. What we need most are authorities wise enough to follow the dictum, “First, do no harm.” The stimulus package will do enormous harm. The huge debt burden it entails, by itself, ought to condemn the measure. America is already drowning in debt. But the measure will also wreak harm in countless other directions by effectively reallocating resources on a grand scale according to political priorities, rather than according to individual preferences and economic rationality. As our history shows, the economy can recover strongly on its own, if only the politicians will stay out of the way.
There are limitations to the powers of governments and of peoples that inhere in the constitution of things, and that neither despotisms nor democracies can overcome.
Legislatures are as powerless to abrogate moral and economic laws as they are to abrogate physical laws. They cannot convert wrong into right or divorce effect from cause, either by parliamentary majorities, or by unity of supporting public opinion. The penalties of such legislative folly will always be exacted by inexorable time. While these propositions may be regarded as mere commonplaces, and while they are acknowledged in a general way, they are in effect denied by many of the legislative experiments and the tendencies of public opinion of the present day.
John Mackay
Toronto General Trusts Building,
Toronto, 31st March, 1914
Historical Fiatch: Watch this vintage pro-inflation propaganda (hat tip to mises.org). This is ridiculous.
Historical Fiatch: President Ronald Reagan, Thanksgiving Day, 1985.
Historical Fiatch: FDR in 1933 and 1934 on mortgages, gold, reflation, and labor.
