Cartoon from 1934 Chicago Tribune: The circle of history continues:

(Why do these themes all sound so familiar?)

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Thanks, Dunk!

Category: Bailouts, Financial Press, Humor

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

48 Responses to “1934 Chicago Tribune Cartoon”

  1. DeDude says:

    The sad thing is that these types of idiotic attitudes and opinions actually forced back the successful policies of the early 30’ies and put us into a second dip that really was not reversed until the ultimate (nobody can argue against it) spending spree of world war II got initiated (and hauled us out of the hole). If history repeats itself what will force the stupidity to retreat this time?

  2. VennData says:

    …and the Tribune was wrong about the gov’t going bust then, too.

  3. Ah, the 1930′s…when Men were Men, Liquor was Made in Bathtubs and a Woman Knew her Place

    LOL

  4. Transor Z says:

    Note that Donald Richberg was depicted in profile.

  5. Super-Anon says:

    FDR inherited a relatively compact efficient government without the kind of debt we have now.

    People might assume we could get away with the same things now as we did then, but looking at how our government is chronically running deficits these days makes me think otherwise.

    Social programs are the privilege of productive, unencumbered economies – not the means to achieve one.

  6. …and the Tribune was wrong about the gov’t going bust then, too.

    ? The Saint Gaudens $20 gold coins are the most heralded of all U.S. gold coins. Minted 1907-1933, St. Gaudens are known as Double Eagles, which means they are $20 gold coins. The only other Double Eagle gold coins are $20 Libertys, minted 1850-1907, which the Saint Gaudens superseded. Double Eagles are .900 fine (90% pure) and contain .9675 oz of gold.

    .9675 x ~878.50 Au =~850

    850/20= ~42.50

    42.50/1, I’ll guess ‘broke’ is relative..

    Past that, people would be stunned by seeing how many of these ‘toons’ from the ’30s are, again, applicable..

    2.0, and all that..

  7. Super-Anon,

    nice point. with that, no doubt.

    also, link for above: http://www.cmi-gold-silver.com/saint-gaudens-gold-coin.html

  8. Super-Anon says:

    …and the Tribune was wrong about the gov’t going bust then, too.

    But other countries have gone bust in that manner. Look at the problems Greece is having now.

    It’s not an issue of whether the government spends or doesn’t, but how effectively it utilizes resources compared to what it borrows.

    There are scientific, non-ideological ways of looking at the problem.

  9. There’s a big difference between now and the 1930′s that Ayn Rand wrote about. In Rand’s day the government was growing ever more powerful, appropriating property from the producers to give to the non-producers (as Rand saw it). She wondered what would happen if the producers, i.e., the capitalists, i.e., “Atlas” shrugged.

    Today, Atlas (in the form of the financial industry) controls the government, claiming that if he fails, so too will the government, which is a part of the world he carries on his shoulders. He and the government are in collusion to effectuate the same transfer as before, i.e., take from the producers and give to the non-producers, but this time the producers are the taxpayers and the non-producers are the government and its overseer, the financial industry. But the real Atlas here is the taxpayers. What happens if they shrug?

  10. Outlier says:

    In the 1930s we also had an efficient (for the time) industrial economy that was exporting tons for a nice trade surplus. Not particularly par to our current monster trade deficits and declining industrial base…

  11. Halp says:

    That’s a great toon!

  12. Super-Anon says:

    Today, Atlas (in the form of the financial industry) controls the government, claiming that if he fails, so too will the government, which is a part of the world he carries on his shoulders. He and the government are in collusion to effectuate the same transfer as before, i.e., take from the producers and give to the non-producers, but this time the producers are the taxpayers and the non-producers are the government and its overseer, the financial industry. But the real Atlas here is the taxpayers. What happens if they shrug?

    Ah… nice way of looking at it.

  13. ben22 says:

    Well,

    There is one thing that isn’t so familiar. it’s that line:

    the soundest govt in the world.

    lol. right.

    I was around back then, but I would not use that term to describe our current crew in washington. This isn’t a jab at BO, I would have said the same thing a year ago, or 12 years ago for that matter.

  14. MRegan says:

    http://dealbook.blogs.nytimes.com/2009/04/09/a-cheat-sheet-for-the-fertilizer-wars/

    For those of you interested in fertilizer. (and no, not my comments- bunch of squareheads- my zombie link and cannibalism riff was golden, better than a Spanish piece of eight or un lingote potosino)

  15. Super-Anon says:

    There is one thing that isn’t so familiar. it’s that line:

    the soundest govt in the world.

    That’s the key, and the thing that probably rules out a New New Deal.

  16. dsawy says:

    Yes, well, what is more interesting is what the cartoon doesn’t point out:

    The financial/banking sector of the US did not fully recover and resume proper functioning from the melt-down of the 30′s until *after* WWII. I’d rather like the financial sector to be repaired a tad more quickly than 10 to 12 years hence, thank you very much.

    Of course, what fans and proponents of FDR never seem to highlight is how FDR gold clause re-pegged the US dollar at $35/oz, up from a bit over $20/oz, devaluing the dollar by two-thirds or thereabouts.

    So is that what you proponents of FDR are advocating here? Devaluation of the US dollar by two thirds? Because I’m sure that some folks in China would be interested in talking about that. We could get away with that tactic in the 1930′s, because we weren’t a debtor nation, beholden to debt owners in other countries.

    Today, there are other countries who aren’t going to allow us to devalue the US dollar so radically as FDR did. So that option is effectively off the table.

    What so many proponents of FDR also blithely ignore is that there are two ways to deal with the resulting over-capacity of debt-financed over-expansion in the economy: stimulate demand, and destroy supply. FDR did both. All these pink-faced urbanites today who sing the praises of FDR seem to forget (because most of these urban liberals today have never seen where their food comes from) is that FDR and the AAA destroyed supply – by plowing in already planted crops, taking land out of production, buying and shooting a whole bunch of pigs and sows. Subsequent to the AAA being ruled unconstitutional, FDR then created the genesis of US ag programs for the next 60 years, paying farmers to not farm.

    What we have today is excess capacity brought on by an over-expansion beyond the ability of organic growth to support the existence of this capacity. This is true in autos, housing, services, etc. Excess capacity that was created with unsustainable debt now has to be wrung out of the system. We can either allow the market to run this capacity out of business, increase demand or destroy supply. FDR did all three. Liberals like to remember only the programs they view through rose-colored glasses – the ones where FDR put people on the government payroll. They like to gloss over the radical devaluation of the US dollar, the AAA and the resulting 60 years of “Moscow on the Mississippi” in the US ag sector.

    Today, the equivalent would be: a) let’s burn down a whole lot of houses, and b) pay contractors to not build anything. We can put aside the radical devaluation of the dollar as untenable in our import-based, debtor nation situation.

  17. wunsacon says:

    DeDude, that’s certainly one of my concerns. But, if the GOP should muster enough apoplexy to threaten to regain power, it could be a great shorting opportunity. (Meh, that’s my “silver lining” look at it.)

    Until then, Steve Barry’s debt-deflation-spiral has apparently been postponed. (I say that respectfully. It’s still Steve Barry’s world. I just live in it.) For how long? Maybe for as long we have trillion dollar budget deficits.

    I wonder what the end game will be. There’s reason and no way to “unwind” all these programs. So, I hope all central bankers get together and mutually forgive each others debt.

  18. km4 says:

    In 1930′s the US Banking Oligarchs did not make 40% of domestic corporate profits
    In 1930′s financial oligarchy did not have the power to block essential reform
    In 1930′s the US Banking Oligarchs we far from effectively capturing our government like they have today under Bush and now Obama

    The Quiet Coup
    http://bit.ly/9QobY

    The Big Takeover
    http://bit.ly/rpHLw
    we’re officially, royally fucked so 98% of Americans had better get a new dream and fast !

  19. franklin411 says:

    Curmudgeon,
    What were the 1920s, if not the decade when corporations ran Washington?

    Anyway, FDR’s point in 1932 was as true then as it is now: The so-called “producers” tell us that everything they have, they earned all by their lonesome. But it just ain’t true: everyone who lives in this society is profiting off the shared effort of everyone else. There would be no UPS or FedEx without public spending on roads and highways and airports. There would be no Union Pacific without government programs that gave railroads a mile of land for every mile of track they laid. There would be no Amazon.com without the internet, which the US Army created. There would be no The Big Picture without the Internet!

    http://www.americanrhetoric.com/speeches/fdrcommonwealth.htm

  20. dunnage says:

    You know, living in a country that now has enjoyed decades of homeless men, women and children in good times — must be the way it’s supposed to be. Can’t get money for children and old folks.

    Then Systemic Risk: Frickin Trillions show up within months. And of course Trillions more will be needed but just for 9 investment “banks” — and whoever owes them money.

  21. franklin,

    you’re big on History, when was the last time the USGov declared Bankruptcy?

  22. DeDude says:

    Super-Anon @ 4:56

    Social programs achieve the social stability that is needed for a productive and unencumbered economy. And since pretty much every cent are used on locally produced products and services, they are about the most efficient thing to use the fruit of our productivity on, if you want to grow the economy. Spending our productivity on peoples pathetic self-indulgence of bigger houses, bigger cars and bigger juvelry on the other hand is highly inefficient.

    Wunsacon,

    Yes if the GOP gains more than 2 senators at the mid-term, then I would start shorting the hell out of US stocks. They already said they want Obama to fail and that would be the tool they needed to make it happen.

  23. usphoenix says:

    @dsawy: Correct. The US is economically defined today by a very limited number if hot spots. NYC – Wall Street, Bellevue, WA (Microsoft), Silicon Valley and a handful of others.

    One fundamental problem today is our government is not being open and honest with its constituency. How much American farmland is owned by foreign interests? And who cares as long as meat prices remain low.

    And yeah FDR was a Wall Street owned fraud. The only thing that saved his legacy was inviting the Japanese into Pearl Harbor. Oh, 9/11.

    So what’s going to save BO’s bacon?

  24. Super-Anon says:

    Social programs achieve the social stability that is needed for a productive and unencumbered economy.

    FWIW I’ve defended the New Deal on the basis that it probably saved the economy by giving the population a good reason not to overthrow the government. But I think it’s dangerous to think of social programs as economic programs – i.e. arguing that social programs are needed to stimulate the economy.

    Social programs may provide the stability needed for economic recovery, but that’s only if they’re economically viable.

    I.E. a social program that bankrupts the government is not socially responsible or economically productive.

    As a nation I think we’ve been fiscially irresponsible to the point where we can no longer assume that social programs will be helpful, even if well implemented.

  25. Marcus Aurelius says:

    I sometimes wonder, with all of the revisionist history being bandied about regarding the nefarious FDR, exactly how he kept getting elected. To hear the revisionists tell it, our grandparents must have been blithering freekin’ idiots.

    The fear mongering cartoon didn’t come to pass.

    OTOH, we have a whole ‘nother ball game this go round – and the playing field, rules, and players are different. I don’t agree with bail-outs on the back end when regulation on the front end can put a stop to the need for them. We had regulations to keep this kind of chicanery from happening, and in our great “conservative” wisdom, we did away with them. We’re getting what we paid for.

    As for alternatives, I hear all kinds of grousing and whimpering from the sniveling little pussies who got us here – what I don’t hear are any good ideas.

    I will tell you this: the middle and lower classes need large infusions of taxable cash (and, yes, that will devalue the dollar – but it’s fiat and it’s being created and handed out anyway, so who’s kidding whom), or no amount of “stimulus” will work. Trickle down in the form of more credit for the consumer is nothing but bad marketing. Cash in the hands of the indebted and those who will spend freely is the answer.

  26. bman says:

    dsawy Says:

    “What we have today is excess capacity brought on by an over-expansion beyond the ability of organic growth to support the existence of this capacity. This is true in autos, housing, services, etc. Excess capacity that was created with unsustainable debt now has to be wrung out of the system.”

    The unsustainable debt has already been wrung out of ‘autos, housing, services, etc.’, the only thing left to wring out is the financial sector.

  27. FromLori says:

    obama is a fascist who was bought and paid for by the banks, the stress test is a complete joke our media is now filled with more propaganda than china

    http://blogs.moneyandmarkets.com/martin-weiss/jpmorgan-chase-goldman-sachs-citibank-wells-fargo/

  28. franklin411 says:

    Lori,
    If Obama really was a fascist, you wouldn’t be around to post that.

  29. Marcus Aurelius says:

    Lori,

    I’d be interested to hear your thoughts on Cheney.

  30. franklin411 says:

    Let it be noted that the Chicago Tribune was run by a guy named McCormick in the first half of the 20th Century. McCormick was in America First, which advocated non-resistance to the Nazi takeover of the world.

    Oh, and this cutie pie also published a news story revealing that American Naval Intelligence had cracked the Japanese military code, putting the lives of tens of thousands of American sons at risk.

    But hey, anything to sell a paper, right?

  31. Transor Z says:

    Pretty sure we were a net oil exporter in the 30s. And had only the 16th largest standing army.

    Women were not 51% of law and med school classes. Blacks were lynched. A politician had to hide his partial paralysis. The US exported its legal justification of eugenics to Nazi Germany.

    Penicillin didn’t exist. Or The Pill. Cars didn’t have seatbelts. A lot of Americans lived their entire lives never leaving the counties they were born in.

    Thanks, but I’ll take 2009 with all of its problems over 1932 and its censorship and ignorance any day.

    Here’s the thing: America has always been the world’s leading producer of con artists, charlatans, snake oil salesmen, three-card monte dealing fake Rolex-selling Brooklyn-bridge selling nogoodniks. You either embrace and come to love that side of America (reading Mark Twain helps) or you will be forever disappointed. And if you can’t keep pace with the cons, maybe you should go live someplace else. Like it or not, a major part of the American credo is “There’s a sucker born every minute.” Up there with caveat emptor.

    That’s why your parents told you (hopefully) to always get it in writing, and never buy a car from a guy who tells you the selling price expires at 5 pm today. Before our time they told their kids not to take wooden nickels.

    It’s why Americans are skeptical of academics.

    And now, some of our financial institutions have gotten their nuts in a vice perpetrating one of the greatest scams EVER. As in, bring down the world economy and put everybody’s grandma in the poorhouse epic scam.

    It’s the wide-eyed innocents who seem to believe this generation of bankers and financiers invented greed and political corruption that troubles me. Those people aren’t reading their history — or at least not the REAL history.

    Quick example of what America is really all about — and has ALWAYS been about.

    I was doing a research project a while back and looking at old Union newspapers from the Civil War. I read the ad section of one and there was this big headline that looked like a news story:

    FROM FORT SUMTER

    and then in little letters just below it: we have no news. But at so-and-so’s haberdashery, you will find the finest examples of men’s apparel!

    Hideously tacky and shameless advertising. Gotta love it.

    Jim Cramer is part of what America is all about. And deep down you know I’m right.

  32. TJoe says:

    So WHAT IS THE SOLUTION ?

    I’ve read several hundred blog posts slamming govt. intervention in the markets, yet I have to read ONE post on the solution

    Again, WHAT IS THE SOLUTION ? What would you rather do if you were in Ben’s shoes?

  33. TJoe says:

    It’s fashionable practice in the blogosphere these days to rip the Govt. yet no one proposes a solution.

    WHAT IS THE SOLUTION ?

  34. Marcus Aurelius says:

    We are Prison Nation, if you’re not white, rich, and connected (two of the three won’t help). Never cozy up to thugs.

  35. Mannwich says:

    @Transor Z: You are indeed correct, sir. However, there is one distinct difference IMO – the rewards today are much greater for such behavior (in our “winner-take-all” system), hence the behavior is much more outrageous.

  36. @Transor Z…excellent rant…and I’ve read lots and lots of Mr. Clemens. He was our first rationalist/ empiricist philosopher, w/ a slight bent of romanticism cum Rousseau re man in nature, and kept you laughing all the while.

    Truly one of the half-dozen or so folks I’d like to have for dinner (not to eat MRegan…just for company):)

  37. Ted says:

    Love the way the educated are slammed in that cartoon! Doggone those powerful academic types!

  38. usphoenix says:

    @tjoe: Solution? Simple.

    Get the government out of the markets and get the markets out of the government.

    What could be simpler?

  39. bman says:

    Tanzor Z, Save all the patriotic crap shooter crap. You know what else is in the history books? Stockades, Drawn and quartering, Burning at the stake. You want to get all nostalgic and help us get a warm fuzzy feeling inside for the all American scheister?

  40. Pat G. says:

    In 1935 it took $1.38 to buy a dollar’s worth of goods and services. In 2008 it took $21.79. The last time that you could buy a dollar’s worth of goods and services for a dollar was in 1913 and we all know what happened that year, to change the equation forever.

  41. dsawy says:

    The first part of a solution is to get the financial sector working again. That is going to involve some real disruptions for awhile. We cannot plod along with fictional banks stacking up cash on their balance sheets, opaque public lending to banks to prevent the public from knowing who is in trouble and who isn’t.

    It is time to get the crap out in the open, take under the banks that are insolvent, break apart their assets and NOT sell them to other “too big to fail banks.”

    That’s part one.

    Concurrently with that, the Fed should step up service to smaller local and regional banks and tell consumers to look to these smaller banks for loans and services. The Fed should help smaller banks assume the business that will be left behind by the larger banks.

    There’s no way around it: we’re not going to get this economy going again until we have a functional financial system, and we’re not going to have a functional financial system until the zombie banks are put out of our misery.

  42. dsawy says:

    bman – the excess is not yet out of autos, etc. Auto loan defaults continue to rise, as do credit card charge-offs. As unemployment continues to climb, the rate of default on loans to consumers will also continue to rise.

    With home equity reversed back a decade or more, and auto companies in dire straights financially, the lending for auto loans and other consumption will likely have to come from local banks, which will place tighter standards on lending than the former “manufacturing companies with a bank inside” setup.

  43. dsawy says:

    Second part of a solution would normally be “some manner of program to increase employment.” Trouble is, trying to replicate the sort of projects from the FDR era is now nearly impossible.

    Want to talk about why FDR’s spending spree worked relatively well for the fix they were in? Sit back and think about the economic multiplier effect of programs like the Rural Electrification Act. Huge multiplier. Think about the economic assets created by Hoover Dam, the Grand Coulee, the TVA projects, etc. We could not have won WWII without those huge hydropower projects of the 1930′s.

    Today, you’d never get past the environmentalists’ lawsuits to get those projects started, never mind started in the timeframe necessary to accomplish economic results. Just read the history of the TVA project in Tennessee and how quickly that project was started. Without the power from TVA, we would never have been able to enrich enough uranium for the Manhatten Project.

    Second reason why trying to replicate those projects won’t fly: we’re already electrified. We don’t have any projects sitting on the drawing boards (or even in anyone’s imagination) that can employ that many people. We have transportation projects, true, but they won’t come close to employing that number of people, or creating the economic multipliers of those hydropower projects.

    Third problem with trying to create mass employment by government project: absent a lot of manual labor (as on jobs in the 30′s), we don’t have a lot of projects that need the people hit the hardest – ie, people with less education. The skew in the unemployment stats is already saying something about this ‘recession’ – if you’re better educated and female, you have a significantly higher likelihood of keeping your job. If you’re male and less educated, you have a much higher likelihood of losing your job. I don’t see much spending in the stimulus bill(s) that is going to create work for these guys.

    Fourth problem with trying to replicate FDR’s employment projects: the structure of the economy has changed. In the 1930′s, if we needed machines, tooling, etc — all of that was made here. Today, if you wanted to put up a wind power project (eg), it is entirely possible that you’d be using Suzlon turbines, which come from an Indian company, not a US company. Or if you’re going to do a whole lot of re-engineering of the power grid, many of the parts and control systems might be coming out of Europe. Right there, we’re giving away chunks of the economic benefit very quickly. The stimulus bill has all sorts of money in it for new computers for the USDA. Well, where are those going to come from? Taiwan, China or elsewhere most likely. How much of the money for a new PC stays here in the US? Not even a quarter of it, I’d guess. That condition didn’t exist in the 1930′s, Smoot-Hawley notwithstanding. There weren’t cheaper places to import trucks, concrete, machine tools, etc from. They were made here.

    So how would we duplicate a FDR-style jobs program? I have no ideas, given the constraints we have to work with. If we could relax some of the constraints, then maybe the FDR-style major jobs programs could work.

  44. DeDude says:

    Super-Anon @ 7:29 PM

    I don’t think there is anything wrong with recognizing that social programs serve several purposes. Most things do. The fact is that social programs do serve an economic stimulus purpose, and it would be dangerous not to recognize that. As the last 8 years should have shown so clearly – if you close your eyes for reality, it will hit you hard in the a**. I also will have to disagree with the idea that the richest country in the world cannot afford our current social programs. As a % of our GDP we are actually not spending much on social programs compared to other industrialized countries. Look at tax-rates and social program spending in the Scandinavian countries, and they are doing just fine. Even if we did have to accept slightly smaller houses and cars or cut in other self-indulgences to make sure everybody have a home and food on the table, we would still all be just fine.

    The fiscical irresponsibility that has and will continue to hurt this nation was the rounds of taxcuts early in this decade at at time when we still had a huge national debt and there were no indication of a severe ressesion. On top of that we then had an even worse fiscical irresponsibility in form of a $ 2 trillion war without a corresponding war-tax to pay for it. Bush took over a budget that was slowly paying down the national debt (as it should) and then added $ 1 trillion to the debt for every year in office except for his first. The idea that poor people should be paying for this fiscical irresponsibility of huge taxcuts for the rich is not only morally bankrupt but also economically irresponsible.

    Ted @ 11:14 PM

    Yeah who needs knowledge when opinions are 5 cents a dozen :-)
    And those opinions are only slightly used (they were used to put us in the hole we are today.

  45. Bob A says:

    amazing.. an entire cable TV network… FoxNews… based on a comic from 1934

  46. cbosco76 says:

    I find the scariest part of all of this to be that none of the guilty parties involved — and there are quite a few — have even the slightest hint of remorse. No lessons have been learned, and the rapists are still walking free. It makes me sad for my children’s future.

  47. Oroville says:

    So in 1934 the fears were of communism taking over. They were wrong, and we went on to effectively defeat communism. Today the fears are of socialism. I believe they will be wrong again. The fear-mongers are almost always wrong because they don’t understand that smart govt spending keeps the system going.