Wednesday, September 17, 2008
Who's the socialist?
The brand-R talking point heads continually define FDR as a socialist who tried to nationalize everything and blew up the Constitution. The same brand-R talking point heads also describe Sultan Bush as a "conservative".
How did FDR handle the banking crisis in 1933? He closed all banks to stop the run, sent out inspectors to check solvency, and immediately re-opened the good banks with a federal guarantee behind them. The guarantee turned into FDIC.
Was this constitutional? Yes. The Federal gov't is given power "To coin Money, regulate the Value thereof..." Since the banking crisis was destroying the Value of Money, the gov't clearly had the authority to intervene.
How does Sultan Bush handle this banking crisis? He nationalizes the insolvent companies.
Now tell me again, who's the socialist?
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A side thought: We can't really have a "run on the banks" in the same way now. In 1932 and 1933 people quite rationally distrusted banks, and took out their money in physical form, preferring to keep it at home. But the available greenbacks weren't enough to sustain the amount of value in circulation, so various companies, banks, cities and states issued private currencies.
Nowadays very little money is in physical form, and very few people expect to carry around lots of green rectangles. If you withdraw your account from your bank, you get a check which isn't any good until you deposit it in another bank. So we may have a run on certain banks, but the result will be more money in other banks.
If large numbers of people demand physical money, the whole system would be in a different kind of trouble..... not just individual banks but the entire Treasury would run out. Nobody would have the imagination or the authority to issue private currencies; you can be sure the Secret Service would bring in the Delta Force if anyone tried it. ¶ 6:25 AM
How did FDR handle the banking crisis in 1933? He closed all banks to stop the run, sent out inspectors to check solvency, and immediately re-opened the good banks with a federal guarantee behind them. The guarantee turned into FDIC.
Was this constitutional? Yes. The Federal gov't is given power "To coin Money, regulate the Value thereof..." Since the banking crisis was destroying the Value of Money, the gov't clearly had the authority to intervene.
How does Sultan Bush handle this banking crisis? He nationalizes the insolvent companies.
Now tell me again, who's the socialist?
= = = = =
A side thought: We can't really have a "run on the banks" in the same way now. In 1932 and 1933 people quite rationally distrusted banks, and took out their money in physical form, preferring to keep it at home. But the available greenbacks weren't enough to sustain the amount of value in circulation, so various companies, banks, cities and states issued private currencies.
Nowadays very little money is in physical form, and very few people expect to carry around lots of green rectangles. If you withdraw your account from your bank, you get a check which isn't any good until you deposit it in another bank. So we may have a run on certain banks, but the result will be more money in other banks.
If large numbers of people demand physical money, the whole system would be in a different kind of trouble..... not just individual banks but the entire Treasury would run out. Nobody would have the imagination or the authority to issue private currencies; you can be sure the Secret Service would bring in the Delta Force if anyone tried it. ¶ 6:25 AM
