WI: A Second Great Depression in 2008

The POD is no TARP.
Not going to happen. Remember, the House did vote down TARP--at first. The market crash that occurred immediately afterwards persuaded them to turn around, along with a number of modifications to the plan made by the Senate. Ultimately, everyone realizes that there's a crisis and sooner or later they're going to come together to agree on something to do about it, so you're going to get something like TARP. Maybe not a direct purchase of "troubled assets," but there's got to be something done to recapitalize banks and prop up the economy.
 
some conservatives went hardcore, they called Obama a socialist and a Muslim. Of course, not that there’s anything wrong with being a Muslim. (but if you were a Hindu, for example, you might not appreciate being repeatedly called a Sikh!)

and some conservatives used the phrase “debt crisis,” not to refer to repackaging and re-selling of subprime mortgages which was the cause of the crisis, but to governmental debt. Of course, this is their standard playbook, but it just didn’t apply to the immediate circumstances.

So, be careful with your propaganda. You may end up believing it yourself. Or your supporters might!

Things could have easily been worse.
 
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Not going to happen. Remember, the House did vote down TARP--at first. The market crash that occurred immediately afterwards persuaded them to turn around, along with a number of modifications to the plan made by the Senate. . .

first response was fine (early Oct. '08), and second part was okay, too (Feb. '09)
What Did We Learn from the Financial Crisis, the Great Recession, and the Pathetic Recovery?

by

Alan Blinder, Nov. 2014

https://www.princeton.edu/ceps/workingpapers/243blinder.pdf

' . . . But it would have been much worse had Congress, the US Treasury, and the Federal Reserve not taken a series of extraordinary actions. After much prodding and a Munchian scream from the stock market in 2008, Congress held its collective nose and passed the much-reviled Troubled Assets Relief Program (TARP), which was quickly labeled a "$700 billion bank bailout" although it was neither. Months later, under the Obama administration, Congress passed a huge fiscal stimulus over almost unanimous Republican opposition. . . '

' . . . a severe political backlash against "deficit spending" (but perhaps not against tax cuts) developed and, more or less, took over the fiscal policy debate in the U.S.—which by 2010 was focused on reducing the deficit. . . '
But then in 2010, we had this premature putting on the brakes.

And much of Europe did go the route of austerity. For example, both Spain and Greece had depression-level unemployment.

It's like a doctor getting pissy and saying to the patient, okay, all well now. Whereas, you kind of need to watch the patient and see how he or she does, and play the actual hand of cards you were dealt, not the one you wished you had.
 
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But then in 2010, we had this premature putting on the brakes.

And much of Europe did go the route of austerity. For example, both Spain and Greece had depression-level unemployment.
Yeah, sure. But my point was that the specific PoD suggested wouldn't work, because Congress was going to do something like TARP sooner or later. Moreover, by 2010 the chance of a Second Great Depression happening, at least in the United States, was gone. So that's much too late a PoD.

The ultimate problem is that everyone remembers (not literally, of course) the Great Depression, knows how bad things got, and aren't going to make the mistakes that led to the Great Depression becoming Great. They might make new and exciting mistakes, or other mistakes once the worst of the crisis is past, but it's just hard to get something as systematically bad as the Great Depression to happen once it's actually happened.
 
. . . or other mistakes once the worst of the crisis is past, but it's just hard to get something as systematically bad as the Great Depression to happen once it's actually happened.
Okay, I’ll agree with that specific point. And thank goodness, for it is a very important point. :)

But . . . why did the EU throw done on Greece and Spain? (and that was when the chips were down)
 
Yeah, sure. But my point was that the specific PoD suggested wouldn't work, because Congress was going to do something like TARP sooner or later. Moreover, by 2010 the chance of a Second Great Depression happening, at least in the United States, was gone. So that's much too late a PoD.

The ultimate problem is that everyone remembers (not literally, of course) the Great Depression, knows how bad things got, and aren't going to make the mistakes that led to the Great Depression becoming Great. They might make new and exciting mistakes, or other mistakes once the worst of the crisis is past, but it's just hard to get something as systematically bad as the Great Depression to happen once it's actually happened.

I was talking to someone not to long ago and he said their will be another recession. Apparently its a matter of when not if. You can see it, the economy is nothing compared to what it once was. The economies of the world are directed by unelected bankers, not politicians. I think there will be another recession, and it will just be an extension of 2008 but who knows about a Great Depression. Anything could happen. (You might have spoke too soon)
 
Not going to happen. Remember, the House did vote down TARP--at first. The market crash that occurred immediately afterwards persuaded them to turn around, along with a number of modifications to the plan made by the Senate. Ultimately, everyone realizes that there's a crisis and sooner or later they're going to come together to agree on something to do about it, so you're going to get something like TARP. Maybe not a direct purchase of "troubled assets," but there's got to be something done to recapitalize banks and prop up the economy.

True, but what if Citigroup and Bank of America followed Lehman into bankruptcy before the second vote? In OTL, this very nearly happened and were only saved by TARP. It's quite possible that if they go under, we could have reached a point of no return where you need much more than $700 billion to prevent the collapse of the remaining major investment banks.
 
True, but what if Citigroup and Bank of America followed Lehman into bankruptcy before the second vote? In OTL, this very nearly happened and were only saved by TARP. It's quite possible that if they go under, we could have reached a point of no return where you need much more than $700 billion to prevent the collapse of the remaining major investment banks.
At this point, everyone knows there's a crisis and the response will be escalated as necessary until it's sufficient to at least prevent an economic collapse, i.e. a Great Depression-like scenario, up to and including outright nationalizing the banks and turning them into technically federally-owned companies the way that other countries did in some cases. The recovery may (likely will) be slow and difficult, as IOTL, but until there is a recovery people are going to be pushing harder and harder.

I was talking to someone not to long ago and he said their will be another recession. Apparently its a matter of when not if.
Of course it's a matter of when. Recessions happen from time to time, and no one really has such a great handle on why that they could possibly prevent them.

You can see it, the economy is nothing compared to what it once was.
Yeah, it's way stronger than at almost any other time in history.

The economies of the world are directed by unelected bankers, not politicians.
They're "directed" by nobody. You think Lehman Brothers wanted to go bankrupt? Bankers might have more influence than politicians, but overall the system is more akin to a hurricane or an earthquake than anything else; no one has all that much actual control over where things go.

I think there will be another recession, and it will just be an extension of 2008 but who knows about a Great Depression. Anything could happen. (You might have spoke too soon)
When there is another recession, it will be as separate from the Great Recession as the Great Depression was from the Panic of 1907.
 
. . . The economies of the world are directed by unelected bankers, not politicians. . .
Banks, and the financial “industry” in general, damn sure have more power than us regular citizens. Laws and policy supporting the banks are viewed as highly critical and absolutely necessary in a way that, say, helping unemployed young persons is not.

In addition, the “masters of the universe” who are the traders for JP Morgan, Citigroup, etc, are basically a bunch of overgrown adolescents not too different from poker players such as Mike Matusow, Phil Ivey, Annie Duke, Scotty Nyugen, except the poker players are much more personable and likeable!

And age doesn’t seem to bring wisdom, to wit, Don Regan. He was the former Merrill Lynch Chairman of the Board who was Reagan’s Treasury Secretary in his first term and his Chief-of-Staff in his second. He famously feuded with Nancy and left in a snit. Reagan asked him to stay till the new person could take his place, and he didn’t.

And then approaching age 70, Don Regan (pronounced with long e) went scorched earth and wrote a book, not in which he attacked the president, but in which he attacked Nancy which he knew would hurt worse. This was the business in which Nancy’s use of astrology came to public attention, and happened during Reagan’s last year.

And this son-of-a-gun is the former chairman of Merrill Lynch? ?

He’s a boy.

He’s an asshole.

He’s an aggressive, pushy salesman type, who frankly should not have been running anything of consequence.

——————

As we as citizens attempt to use Sherman Anti-Trust or similar, in very lawful, orderly way, to break up the big boy banks, the biggest obstacle we will face will be the idea that, if Germany and the UK have mega-banks, then we need them, too.
 
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Same thing that happened in 1932 , the Republican party would get massacred in the election and probably lose control of Congress for 20 years seeing as voters would remember how bad they screwed up.
We'd also see the rise of Socialist Democrats happen 10 years earlier.
 
. . . the Republican party would get massacred in the election and probably lose control of Congress for 20 . . .
I’m not at all so sure, for even during the 2008 crisis itself, different conservative viewpoints gained traction.

And not near enough public notice was given to . . .

The fact that about a third of the Feb. 2009 Congressional stimulus was a tax cut (yes, Obama, too, but I’m so tired of us only focusing on presidents)

Each adult with income got a built-in credit of $400. Or about $33 a month, or if you’re paid twice a month, $16 more in each paycheck.

And since it changed withhholding, little noticed.

And the Republicans really beat the drum that Obama was going to raise taxes since he was in favor of—regarding the Bush tax cuts which were due to expire either on or after 2010—letting them go ahead and expire.

* Obama probably should have sent out checks like Bush!
 
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https://www.google.com/amp/s/www.vo...merica-unaccompanied-children-immigrants-daca

Remember the surge of unaccompanied minors from Mexico and Central America (mainly Guatemala, El Salvador, and Honduras) coming to the U.S. the Summer of 2014,

to escape recruitment and retaliation from gangs,

and although gang activity has many causes, damn straight economics is a big part of it. Meaning, even though our own country the United States may have escaped depression-like conditions, other countries may not have been so lucky.
 
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