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Marriner S. Eccles on the Great Depression

Ken Watts's picture

What does that get us? A discontented, lazy rabble instead of a thrifty, working class. And all because a few starry-eyed dreamers like Peter Bailey stir them up and fill their heads with a lot of impossible ideas.

Frances Goodrich and Albert Hackett

THERE'S A BRILLIANT LITTLE POST over at maven&meddler quoting Marriner S. Eccles on the causes of the Great Depression.

As Eccles put it, it's like a poker game in which only one side wins.

Pretty soon they have all the chips, and the game is over.

It has to do with one of the two areas we touched on in the series of the last few days: honesty and money.

Eccles, who was a millionaire by the time he was in his twenties, was Chairman of the Federal Reserve between 1934 and 1948.

In the quote over at maven&meddler he explains, in some detail, why the depression happened.

His analysis is instructive, and has a great deal to say to us today, in the midst of this recovery.

Eccles argued that the problem was a matter of (and I'm paraphrasing here) the redistribution of wealth.

Not the redistribution of wealth from the rich, who already have too much, to the poor, who don't have enough, by means of taxes—but the redistribution of the wealth produced by the poor and middle class to the already wealthy by means of the overall economic system.

He says that the reason for the Great Depression was that the very wealthy became so greedy that they sucked all of the money out of the pockets of the poor and middle class.

In order to survive, the poor and middle class began to live on credit, and when they got in so deep that they couldn't pay off the debt they could no longer afford to buy the goods the wealthy were selling, and the economy ground to a halt.

As maven&meddler points out, Eccles was anything but a socialist, yet he had the good sense to see that a set of policies that destroys the wealth of the average citizen will eventually destroy the economic health of the whole country, including that of the wealthy.

You don't have to be a liberal to understand how the economic system works, or to realize that it is very easy to destroy the whole game by tipping the advantage toward wealth.

As Eccles put it, it's like a poker game in which only one side wins.

Pretty soon they have all the chips, and the game is over.

At least, that's what I think today.

I'll take up honesty (and spirituality) tomorrow.

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