Sometimes the timing is not to the appointmentNeed to keep some flexibility and stay pragmatic on investment opportunitiesHowever on the first two points Kouchner was very lowThe auto issue is organized in WashingtonPolitics must regain power with the banksHe described the peoples of the region Somali Dankalis OgadinesProfitsharing is one thing it is another the Government appeared for what it is iEverything goes back to the Elysée Palace5 million euros last year or an average of 24000 euros per loanThis is crazy, what we learn at school. It is crazy, because there is sometimes only a very distant report with reality. Example: the great depression of the 1930s. A close look, the lessons that have been reached are false. And these errors could explain our difficulties to understand the current crisis, and out. Small round-up.
Monetary policy has overcome business
After the October 24, 1929 Wall Street crash, the Central Bank of the United States would have the spigot liquidity, thus plunging the banks and businesses in the chaos. It is false. In the week that followed the crash, the Fed instead cut its main interest rates. It also injected massive liquidity. She then continued, bringing its reference rate at 0.5 early 1931. The US economy is thus not was precipitated in the crisis by monetary policy. She went there alone, with a financial system damaged by the crash. First financial lesson of 1929, is needed to repair banks.
Of course, the Federal Reserve then made dramatic errors. It noted its interest rates to keep its gold, stopped the liquidity injections, plunged the economy back into a deep recession in 1937 by tightening its monetary policy to avoid inflation. But it is not she who killed the US economy in the early 1930s.
The crisis led to protectionism
The collapse of the economy have led to the adoption by Congress of Act Smoot-Hawley under tariffs on more than 20,000 products, promulgated by President Herbert Hoover on June 17, 1930. The reality is different. The Smoot-Hawley Act comes first from the war of 1914-1918. Men then leave for the fields of battle. They burn the land where they compete and grow over the other. Agricultural production collapsed. But as he is still eating, America increases its crops to feed Europe. After the war, European farmers are moving away from the rifle to the cart. With a production dating, agricultural prices tumble and us farmers require protective measures. A second reason fueling protectionist pressures: the progress of the industry. Henry Ford opened the first chain of automotive Assembly in 1913. Huge productivity gains weighed on prices.
The first protectionist Act is passed in Washington as early as 1922. In 1928, Herbert Hoover won the presidential election by promising to tighten the screw. In his inaugural early 1929 speech, he says that this promise, "to do justice to our farmers, our employees and our industry, cannot be postponed. Of course, the crisis has amplified protectionist measures. But the shot went long before.
Then the protectionism led to the crisis
The closure of the borders would cause the implosion of global trade, the depression and ultimately war. Economist Alan Metzler says that the shock of the Smoot-Hawley Act "helped to convert a further downturn in a deep depression". Of course, each of the two events of departure is undeniable. From the Act, there has been an impressive wave of protectionism, since more than sixty countries have raised their tariffs or established quotas. And world trade really imploded, since the volume of international trade has collapsed to a third party from 1931 to 1934.
But the closure has really caused the fall It is permissible to doubt in illuminating 1929 on 2009. No protectionist measures of magnitude was taken up to now, even if knife strokes have been given here and there. And yet, the international trade collapses, as in the early 1930s. All manufacturers use the same expression: they have never seen a physical decline of such magnitude. The ships are becoming scarce on the maritime routes. China decreased its imports of 43 in one year, the Japan suffered a decline of its exports by 35, the Germany of 12. If trade drops, it is not because of barriers, but because financial suffocation that grows each to withdraw to its bases. No doubt there were the same in the 1930s. With then an amplification of the phenomenon by the construction of barriers. If the threat of protectionism should not be ignored, it should not be amplified. The real issue, once again, is the financial implosion.
Public spending has saved America
With his New Deal, Franklin Roosevelt reportedly handed the US economy on track. This lesson is essential... but it is far from certain. First, his predecessor Hoover had already let the public expenditure. Then, if activity resumes in 1934, she relapse then. In 1938, America produces less than 1929! It is actually the war effort that really boosts the machine (such as a little earlier in Germany), with an explosion of public debt. Increased from 16 of GDP in 1929 to 40 in 1933, it varies little until 1941 before triple in five years.
Today, historians still debate the revival of the 1930s. At the end of the 21st century, their successors discuss perhaps the usefulness of the set reminders today implementation. The 150 billions of dollars injected last year by George Bush in the United States caused only a hiccup of purchases. The 3,000 billion spent by the States of the rich in this year 2009 to support the consumption and investment may well be also waste (the rescue of companies through suffocation is valuable, as had shown it the example Alstom in 2004). The economic utility of the fiscal stimulus is to prove. His political usefulness is in obvious contrast: it shows that the rulers act or rather react. By the time running, it may be necessary to avoid the rise of populism pests.
The devaluation is not the solution
The lesson here is true! September 21, 1931, the United Kingdom decided that the pound sterling is more convertible into gold after suffering severe speculative attacks on the financial markets. The British currency rectifier immediately by 30 against the franc. More than 40 currencies follow, including the dollar in 1933. The monetary chaos wins the world. As early as 1936, the countries of the three major currencies worldwide the dollar, the pound and the franc sign a statement of cooperation. Eight years later, the Bretton Woods agreements create a stable system.
The problem here is that this lesson is likely to be forgotten. Crisis, the temptation of devaluation is as much stronger that it is the first which is earning. The President of the Federal Reserve, Ben Bernanke, specialist of the great depression, had stated clearly in 2002: "There are cases where an exchange rate policy has been an effective weapon against deflation." "A striking example of American history is the devaluation by Roosevelt in the dollar against gold in 1933-1934" that "to put an end to the U.S. deflation remarkably quickly." The monster of the unilateral devaluation might resurface.
This small round shows that the world is not out of the crisis of 1929 as the story goes. We will have to turn to heresies but, after all, the idea of nationalizing the banks was one a year ago. It will take perhaps of inflation to erase became overwhelming debt and therefore a "euthanasia of the annuitants", in the words of Keynes. You may need to accept the precepts of the old Austrian school that, as explained Gérard Dréan, "the cause of the crisis is not otherwise than in booms that have preceded" and therefore "the only answer is purging and weaning, necessarily painful" (1). Only certainty: out of the crisis, should think otherwise.
