MARKET MYTHS

Jorina Fontelera, reported in her ThomasNetIndustrialNewsRoom article, Light Friday: Great Depression Myths and Bailout Bashes (Nov. 14, 2008): We are probably misguided if we believe our current state of affairs is at all like the Great Depression. To quote:

"1. Herbert Hoover Believed that markets were self-correcting. Fact: Hoover believed in government intervention to support incomes and employment. His policies kept businesses from cutting wages as the economy fell and championed many of the ideas in Franklin D. Roosevelt's New Deal such as central planing and control of the economy."

This tells me that we are repeating the past in that the current administration will inherit the last administration's foibles, if that's what they are. The current administration inherited the predecessors problems, or what goes around comes around.

"2. The October 1929 crash precipitated the Great Depression. Fact: The crash triggered the passing of countervailing tariffs that caused the international economy to collapse."

A bit different this time, but the crash of the international economy is directly related to the U.S. ability to stay afloat.

"3. Where the market failed, the government stepped in to protect the people. Fact: The Agricultural Marketing Act caused farmers to lose export markets and raised prices from hard-pressed consumers, which both lowered farm productivity and drove farmers off their land."

Where there is cause there is affect or influence. Because the corn market got way out of whack and the price of fuels got way out of whack hasn't seemed to have created a great collapse in the other factors that produce, food, energy and medical related needs. These last three, according to this week's CPI grew a few tenths of a percent where things like transportation absolutely tanked.

I won't go on with the list, but Ms. Fontelera's article is worth reading -- it puts values in perspective again. I believe that the value remains where value belongs, in the products and things that we really need to live. The rest of the stuff, SUV's and $5million houses aren't really necessary in today's economy. Check the archives at http://news.thomasnet.com/IMT/archives/2008/light-friday-111408-great-depression-