Friday, August 14, 2009

Poly is a Dweeb

Ever hear of the Reconststruction Financial Corporation? Hoover instituted it.

"It lent almost \$2 billion in its first year, which was enough to serve the immediate goal of delaying a banking catastrophe, but the money did not inspire the expected general economic upturn."

"In February 1933 the banking system collapsed again. President Franklin Roosevelt, inaugurated in March, had none of Hoover's reservations about state capitalism. Roosevelt immediately declared a banking holiday and passed the Emergency Banking Relief Act.." Reconstruction Finance Corporation

Insolvent banks weren't allowed to re-open. Solvent ones were capitalized.

This article could have been written yesterday as an explanation of the past few decades up to the present.... rather than explaining the development of the Great Depression. Deja vu?.

Great Depression in the United States

Same responses to the same problems. Of course, today there are a few differences. We've outsourced our "real economy' and are now the world's largest debtor nation rather than the world's largest creditor nation. We're broke and using non-existent resources to enable the banks to pay off derivative players in an attempt to make them solvent.
Thank you for clarifying your position. But this only points out why I find you a dull to respond to. Out of your 5 links one works and one I could fix. You failed to even acknowledge that you got confused about who said what. As far as the "Reconststruction Financial Corporation", HH was President but that was about it.
In January 1932, on the recommendation of President Herbert Hoover, Congress created the Reconstruction Finance Corporation (RFC), which would use government money to make loans to banks, railroads, and insurance companies. In July, with the crisis deepening, the Emergency Relief and Reconstruction Act authorized the RFC to make loans directly to farmers, states, and public works projects.Britannica Concise Encyclopedia: Reconstruction Finance Corporation
So not even created the bill just a recommendation and it should also be noted that it was much more than banks and was a loans only aspect of any support to the markets but then this does not fit in your view:
Hoover was wary of any sort of government intervention in the marketplace. He was slow to propose the RFC because he hoped bankers could solve their own problem, and he never stopped viewing it as a temporary agency. Hoover's chairmen (Eugene Meyer and Atlee Pomerene) insisted on an overly conservative set of guidelines. The RFC's loans carried high interest rates (they did not want to compete with private lenders), and its collateral requirements were extremely rigid. Moreover, RFC-funded public works projects had to pay for themselves (hydroelectric plants or toll bridges, for example). According to Hoover and his advisers, the primary purpose of the RFC was to encourage banks to start making loans again so the private sector could initiate its own recovery.
You conveniently ignored that section as it stated the loans had high interest rates and required collateral. Not many "Zombie Banks" have lots of good collateral lying around. It also does not seem to have any subsidy basis to it.
U.S. government agency established (1932) to provide loans to railroads, banks, and businesses. The RFC was an attempt by Pres. Herbert Hoover to counter the early effects of the Great Depression by rescuing institutions from default. It was widely used by Pres. Franklin Roosevelt in the New Deal and to finance defense plants in World War II. After the war, the RFC's powers and functions were gradually transferred to other agencies.
Oh, so FDR used it more. Well that again does not fit in your ideology.
We are pumping blood money into zombies. Same thing Herbert Hoover did.
So letting 744 banks fail in 1930 was pumping blood money into zombies? And allowing 9000 banks to fail? And wiping out 140 billion dollars of depositors money is "pumping blood money into zombies"? So maybe FDR pumped blood money into a lot of banks, railroads, farmers, and public works projects? {Bank Failures}
In January 1932, on the recommendation of President Herbert Hoover, Congress created the Reconstruction Finance Corporation (RFC), which would use government money to make loans to banks, railroads, and insurance companies. In July, with the crisis deepening, the Emergency Relief and Reconstruction Act authorized the RFC to make loans directly to farmers, states, and public works projects.
Let the spin begin...

Records of the Reconstruction Finance Corporation [RFC]

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