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History lesson requested - RE early/mid 20th century economics

I'm hoping someone with more historical knowledge can spit some truth my way.

I've often heard of Paul and supporters of his such as Peter Schiff reference our economic history with a common anecdote similar to this:

"Back in the day Ford Motors had the highest paid workers in the world. They manufactured the highest quality cars, and sold them the cheapest to boot."

This and other similar examples are recited as shining examples of free-market Austrian economics at work.

While I am totally sold on the concept of free markets and that the government through taxation and regulation is a noose around the necks of business opportunity, advancement, and competition, I am unclear as to what happened to change the course of our economic path.

It seemed so clearly to be the superior method of economic policy.

What was the catalyst that changed our course? I figure the Great Depression and subsequent New Deal policies are the main culprits, but I'm hoping someone else could provide further insight as to what exactly changed the minds of the people and our political representatives. Even in the 50's and 60's we still seemed to have a booming period of productivity.

Someone educate me!



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For a history lesson, Paul_S.

For a history lesson, Paul_S. has it right. Much to be learned at the Mises.org. But for insight into the philosophical path we have taken to this point, I believe "Atlas Shrugged" is a good place to start. "The Ominous Parallels" is a great book also, but probably as dry as they come. I'm biased towards Ayn Rand and the Objectivists, but there really is so much out there.

It was a great run !!

ie. Greeks could retire before 50 with a great pension :D

Only one spouse could support an entire family. The income tax return was one page and we could buy a full cart of groceries for 20 bucks and a cup of coffee for a nickel and cars ran for 30 years and we could rent an entire house for 60 bucks a month....Now we are the fortunate ones to pick up the tabs due to the insanity since the early 70's lol

donvino

insurance

"the government through taxation and regulation"

Add federal guarantees, such as FDIC insurance. If people want their deposited bank funds to have insurance, let private companies provide the insurance.
When government backstops insurance, there is distortion in the marketplace.

People build multi-million dollar houses near the beach because of government subsidized flood insurance that keeps the insurance price artificially low. Why should people in Idaho subsidize flood insurance for people on the coast of North Carolina?

Remember the way it is was

Remember the way it is was not always how it was,there essentially had to be a transition.That transition was away from the founding documents and liberty to the building up an empire.

*Killing nullification & secession
You have to go back to the beginning to see how all this is tied together.The old whig party had dreams of establishing a empire(protectionism,central banking,corporate welfare) and the radical republicans(whig party anew)got there way by use of force.Nullification and secession were dead,the declaration of independence meaningless,the bulwarks to stop centralization ceased to exist.

*Forced schooling
Americans needed to be "reeducated" to fit in the new empire.The establishment of forced schooling was created by the elitists,borrowing the programs from Prussia.The purpose was to make obedient people to the state as well as corporations.We can't have a great empire without conditioning them while there young.=regimentation,dependency,and absence or omitting of faith,revisionist history,fearful

*The rise of "professionalism"
Now that we are all taught the same we need to be led by force by our betters.The same ones who promoted forced schooling also "funded" many universities.Free people are not very useful or profitable.=caste system

*The federal reserve for empire
Establishing the strongest central bank by the bankers was pretty easy now,no Jeffersonians or Jacksonians to get in the way.Don't worry there professionals!

*Circumventing the Constitution and the promotion of democracy
Most of what the government does today is unconstitutional,and no you don't need the people in black robes to tell you if it is or isn't.So today we are led by the rule of men and not the rule of law.No principles just majority rule,representation is reelected by the largess that they hand out.Constitutional scholars = practiced at the art of deception

13 No servant can serve two masters; for either he shall hate the one, and love the other, or else he shall lean to the one, and despise the other. Ye cannot serve God and riches. - Luke 16

It all began a long long time ago.

No sooner than the ink on the Constitution was dry, it was confronted by 'Hamilton's Curse.' (by Thomas Dilorenzo). http://mises.org/media/2984/Authors-Forum-Hamiltons-Curse In 1791 the First Bank of the United States was chartered for 20 years.

The Coinage Act of 1792 create a legal Dollar as a "A Constitutional Dollar" by Michael Rozeff
http://mises.org/daily/4149/A-Constitutional-Dollar

What do you want to know:
http://mises.org/media.aspx?action=author&ID=425
http://mises.org/media/author/424/Thomas-E-Woods-Jr
http://mises.org/media/authors/299/Rothbard
and so much more

Free includes debt-free!

More specific on the corruption of central banks

http://www.youtube.com/watch?v=82wHzFiG714

Free includes debt-free!

High Standard of Living

A high standard of living made us soft. The government took over charitable functions of social and religious institutions ("Why should I give if I already gave to the IRS?"). We industrialized and moved large populations to the cities where anonymity made people rely on government instead of neighbors.

The whole process is cyclical, historically. It has happened before.

My hope is that the ugly turn we're about to take will happen faster and with less violence due to the technological advantages of the Internet. This is an educational effort: we need to turn toward freedom, not tyranny.

What do you think? http://consequeries.com/

go to mises.org

Mises.org

click on media or literature, your choice. But there are great lectures by Thomas Woods and Thomas DiLorenzo on these topics.

my diy adventure blog: dickdoesit.blogpsot.com

The catalyst?

There were different events that began putting America on the wrong track. For example, the creation of the Federal Reserve, and adoption of the income tax in 1913.

That set the stage, but we still had a pseudo gold-standard even after Roosevelt ordered the confiscation of gold at $20.67 per troy ounce to the Federal Reserve notes in 1933 (another small push in the wrong direction).

But the REAL catalyst came in 1971. In that year Nixon took us off the gold standard entirely, saying international holders of dollars could no longer redeem them for gold (yep, we stiffed them). Incidentally, this is why Dr. Paul decided to get involved in politics and speak out.

What this meant was government could print and spend money and grow with no limit. This sounded good for a while, because as government grew and bought services (military and otherwise) the economy benefited.

However, this is unsustainable. Think of it this way. If someone hands you a credit card, with no job, and says you have a $10 million limit on it, but you have to pay it back with interest, have they truly made you wealthy or given you the illusion of wealth?

I would say the Progressive

I would say the Progressive movement really got the ball rollin. The Republican party of the 1800s were pretty big central planners while the Democrats were the jeffersonians... Then in 1896 the two parties compromised on some issues and became "two wings of the same bird" which opened up a spot for the progressive ideas which had been coming over from Europe... 1913 was a bad year - Federal Reserve, income tax, direct election of senators was nearby... Then the WWI mentality of spreading peace through war was introduced.

The 20s was the decade of easy credit and bubble economy followed by the crash. THEN lord Keynes introduced his theory which was applied by FDR and prolonged the Great Depression.. Now, why the FDR experience wasn't enough to nip it in the bud, I have no idea... I'm no historian but this is just what I've gathered after looking at some stuff.

In a nut shell, I think it was a shift in understanding what the role of government was in the early 1900s that allowed space for the economic policies of the 1930s and beyond.

"You must be frank with the world; frankness is the child of honesty and courage...Never do anything wrong to make a friend or keep one...Above all do not appear to others what you are not" - Robert E. Lee, CSA

The creation of the Federal

The creation of the Federal Reserve in 1913 transformed American life. It gave the big banks, and the corporations that surround the banks, unlimited access to funds which they've used to steadily reduce competition and consolidate wealth through inflation and taxation.