Comments on: Some Thoughts on the Credit Crunch http://taxesandbudget-blog.ncpa.org/some-thoughts-on-the-credit-crunch/ Insights on Taxes, Economic Policy, Federal Budget | NCPA Tue, 16 Mar 2010 17:24:04 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: John Petty http://taxesandbudget-blog.ncpa.org/some-thoughts-on-the-credit-crunch/comment-page-1/#comment-7115 John Petty Mon, 20 Oct 2008 02:03:58 +0000 http://www.bob-mcteer-blog.com/some-thoughts-on-the-credit-crunch/#comment-7115 Marriner S. Eccles, was the Chairman of the Federal Reserve from 1934 1948 In his 1951 memoir Beckoning Frontiers, Eccles detailed what he believed caused the Great Depression. Our current situation is eerily similar. Eccles wrote: "As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth — not of existing wealth, but of wealth as it is currently produced — to provide men with buying power equal to the amount of goods and services offered by the nations economic machinery. Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped. Marriner S. Eccles, was the Chairman of the Federal Reserve from 1934 1948

In his 1951 memoir Beckoning Frontiers, Eccles detailed what he believed caused the Great Depression.
Our current situation is eerily similar.

Eccles wrote:

“As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth — not of existing wealth, but of wealth as it is currently produced — to provide men with buying power equal to the amount of goods and services offered by the nations economic machinery.

Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

]]> By: Richard W. Symonds http://taxesandbudget-blog.ncpa.org/some-thoughts-on-the-credit-crunch/comment-page-1/#comment-6824 Richard W. Symonds Mon, 28 Jul 2008 16:14:41 +0000 http://www.bob-mcteer-blog.com/some-thoughts-on-the-credit-crunch/#comment-6824 So, who was the first to dream up the term "credit crunch" ? http://gatwickcity.phpbb3now.com/viewtopic.php?f=11&t=611 There is no malicious intent here - be assured of that, please ! So, who was the first to dream up the term “credit crunch” ?

http://gatwickcity.phpbb3now.com/viewtopic.php?f=11&t=611

There is no malicious intent here – be assured of that, please !

]]> By: Creditor http://taxesandbudget-blog.ncpa.org/some-thoughts-on-the-credit-crunch/comment-page-1/#comment-6096 Creditor Thu, 31 Jan 2008 13:31:07 +0000 http://www.bob-mcteer-blog.com/some-thoughts-on-the-credit-crunch/#comment-6096 I searched for \'credit help\' in google and found this your post (\'Some Thoughts on the Credit Crunch\') in search results. Not very relevant result, but still interesting to read. I searched for \'credit help\' in google and found this your post (\'Some Thoughts on the Credit Crunch\') in search results. Not very relevant result, but still interesting to read.

]]> By: Bryan http://taxesandbudget-blog.ncpa.org/some-thoughts-on-the-credit-crunch/comment-page-1/#comment-1585 Bryan Mon, 01 Oct 2007 02:36:24 +0000 http://www.bob-mcteer-blog.com/some-thoughts-on-the-credit-crunch/#comment-1585 Thanks for your posting. How now does the Fed deal with the negative side-effects of their decision,ie the lowering of the dollar? Do they think about international currency intervention? Thanks for your posting. How now does the Fed deal with the negative side-effects of their decision,ie the lowering of the dollar? Do they think about international currency intervention?

]]> By: dougfromeagan http://taxesandbudget-blog.ncpa.org/some-thoughts-on-the-credit-crunch/comment-page-1/#comment-1352 dougfromeagan Wed, 19 Sep 2007 00:58:59 +0000 http://www.bob-mcteer-blog.com/some-thoughts-on-the-credit-crunch/#comment-1352 What ever happened to Free Market Capitalism? My feeling is that this whole real estate bubble was the consequence of Alan Greenspan messing with the market. Talk about a Keynesian!! We need to stop the government from trying to help the economy and just let it run it's self. How much is a gallon of milk worth? Who knows, the price is subject to so many artificial forces it is impossible to say. Why can't the government just stop trying to HELP US!!!! What ever happened to Free Market Capitalism?

My feeling is that this whole real estate bubble was the consequence of Alan Greenspan messing with the market. Talk about a Keynesian!!

We need to stop the government from trying to help the economy and just let it run it’s self. How much is a gallon of milk worth? Who knows, the price is subject to so many artificial forces it is impossible to say. Why can’t the government just stop trying to HELP US!!!!

]]> By: Andy Ellwood http://taxesandbudget-blog.ncpa.org/some-thoughts-on-the-credit-crunch/comment-page-1/#comment-1348 Andy Ellwood Tue, 18 Sep 2007 18:40:40 +0000 http://www.bob-mcteer-blog.com/some-thoughts-on-the-credit-crunch/#comment-1348 Bob, Great call on the 50 bps cut. Enjoyed your appearance on CNBC as well. Keep up the great work. Andy Ellwood Bob,
Great call on the 50 bps cut. Enjoyed your appearance on CNBC as well. Keep up the great work.

Andy Ellwood

]]> By: Tony Salvaggio http://taxesandbudget-blog.ncpa.org/some-thoughts-on-the-credit-crunch/comment-page-1/#comment-1286 Tony Salvaggio Sat, 15 Sep 2007 18:55:57 +0000 http://www.bob-mcteer-blog.com/some-thoughts-on-the-credit-crunch/#comment-1286 Since I've forgotten more than I ever knew about the Fed, I'm able to salvage af bit of my reputation with my golfing friends when they question me about Fed actions(or non-actions) thanks to your timely blogs. I just have to remember to check it every now and then because things are changing awfully fast. I might add that the folks I know are not bothered too much by the credit crunch and would just as soon see interest rates remain high. Hope you, Suzane and boys are doing well. Tony Since I’ve forgotten more than I ever knew about the Fed, I’m able to salvage af bit of my reputation with my golfing friends when they question me about Fed actions(or non-actions) thanks to your timely blogs. I just have to remember to check it every now and then because things are changing awfully fast. I might add that the folks I know are not bothered too much by the credit crunch and would just as soon see interest rates remain high. Hope you, Suzane and boys are doing well.
Tony

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