WOULD YOU SURVIVE?
The main character of A Tunnel Too Far:
Frank Cermak, white male, ethnic background Bohemian, opinionated, self-centered, knows what he wants and how to get it.
The main character of A Tunnel Too Far:
Frank Cermak, white male, ethnic background Bohemian, opinionated, self-centered, knows what he wants and how to get it.
WHAT WOULD YOU DO?
WHAT HAVE YOU DONE?
WHAT HAVE YOU DONE?
The Great Depression and A Tunnel Too Far
Causes
The political left believes that this recession was caused by the last president. The right sees more clearly, but blames economic pressures placed on our economy by the last two presidents and in particular by the government’s policy as regards homeownership. It seems agreeable to say that “bubbles” caused both. In the case of the Great Depression, the bubble was caused by free credit in the form of buying on margin. Brokers would lend $9 for every $1 an investor had to spend. As long as the market kept going up, the investor could sell for more than his purchase and never come up with the other $9.
With the current recession, it was free credit in the form of ridiculously low down payments, lax requirements for credit, and the government’s push to make even the poorest worker a homeowner. This was in some ways worse than 10% margin requirements in stocks, because some home loans were 0% down. Likewise, when the value of homes went south, people in over their heads couldn’t sell at a loss when they didn’t have anything invested in the first place.
The market bubble of 1929 affected investors and businesses in a more direct way than the housing bubble of 2007, but the initial result has been the same: Tight credit, slowing of free market activity, loss of jobs, and stagnant wages.
Cures
There are many theories about how to deal with an economic downturn. But the most prominent fall into two categories. As this is not intended to be a completely scholarly work, I will not bore you with the origins of the theories.
*Theory 1: Spend government money to get people back to work and economic activity will follow. How you spend that money can mean the success or failure of this theory. As spending a lot of government money, taxpayer money, means you have to have tight control, this usually means a lot of extra government regulation. Roosevelt tried this during most of the 1930s.
*Theory 2: Let taxes fall and loosen government regulation and private investors will not see the government as such a threat to investment. With more private money in the economy, a rising tide floats all boats. This is actually what happened in the Reagan era.
Into this mess we throw you, dear reader, and our protagonist, Frank Cermak. How will you both survive?
The political left believes that this recession was caused by the last president. The right sees more clearly, but blames economic pressures placed on our economy by the last two presidents and in particular by the government’s policy as regards homeownership. It seems agreeable to say that “bubbles” caused both. In the case of the Great Depression, the bubble was caused by free credit in the form of buying on margin. Brokers would lend $9 for every $1 an investor had to spend. As long as the market kept going up, the investor could sell for more than his purchase and never come up with the other $9.
With the current recession, it was free credit in the form of ridiculously low down payments, lax requirements for credit, and the government’s push to make even the poorest worker a homeowner. This was in some ways worse than 10% margin requirements in stocks, because some home loans were 0% down. Likewise, when the value of homes went south, people in over their heads couldn’t sell at a loss when they didn’t have anything invested in the first place.
The market bubble of 1929 affected investors and businesses in a more direct way than the housing bubble of 2007, but the initial result has been the same: Tight credit, slowing of free market activity, loss of jobs, and stagnant wages.
Cures
There are many theories about how to deal with an economic downturn. But the most prominent fall into two categories. As this is not intended to be a completely scholarly work, I will not bore you with the origins of the theories.
*Theory 1: Spend government money to get people back to work and economic activity will follow. How you spend that money can mean the success or failure of this theory. As spending a lot of government money, taxpayer money, means you have to have tight control, this usually means a lot of extra government regulation. Roosevelt tried this during most of the 1930s.
*Theory 2: Let taxes fall and loosen government regulation and private investors will not see the government as such a threat to investment. With more private money in the economy, a rising tide floats all boats. This is actually what happened in the Reagan era.
Into this mess we throw you, dear reader, and our protagonist, Frank Cermak. How will you both survive?
A Tunnel Too Far
A Novel
by Charles A. Turek
A Novel
by Charles A. Turek
*Would you turn to crime to achieve your goals?
*Is morality relative to how much society can take?
*If confronted with a life or death decision, would you chose life at any cost?
*Economic pressures are felt differently by different strata of society: Do you think one group is more favored than others?
*How important to survival is the political climate?
*What is your political climate?
Feel free to ask and answer other questions you see asked in A Tunnel Too Far.
Email here.
*Is morality relative to how much society can take?
*If confronted with a life or death decision, would you chose life at any cost?
*Economic pressures are felt differently by different strata of society: Do you think one group is more favored than others?
*How important to survival is the political climate?
*What is your political climate?
Feel free to ask and answer other questions you see asked in A Tunnel Too Far.
Email here.
The Great Depression. At this long perspective of 80-plus years, The Great Depression seems much like the old stories our grandparents told of walking to school barefoot, in the snow, uphill both ways. Although today’s economists and government forecasters would probably have had this one over sometime in 1935, it is widely accepted that we did not get out of it, as a country, until the United States entered World War II. Logically, you had to be born about 1936 or 1937 to have any recollection of the hardships. That makes even the youngest veteran of this economic downturn a ripe old 72.
Sure, stories were passed down and embellished, but the hardships were real. In A Tunnel Too Far, protagonist Frank Cermak is a young, opinionated member of the working class, on his way up by any means possible, and thinking at all times that he has a good handle on what to do to get himself everything he wants in life.
How is the economic downturn we are experiencing today the same and different from The Great Depression? And how are you handling it?