Rakesh Saxena

Great Depression, Ominous Political Headwinds and the S&P 500

Dear axelrod: I could not agree more on the futility of bailouts. However, at this point in time, these bailout plans are providing quite a bit of hope to investors throughout the world--let's see how long this will last. Many thanks - Rakesh


On Jan 08 07:16 PM axelrod608 wrote:

> Carey jim - good post. The generally held overview of world history
> in the US is, er. sketchy. And only relatively accurate.
>
> As for the article, good work, Rakesh. Economic hardship increases
> tension and stress in all but the most primitive of societies, so
> if the global spread of economic woes continues to disrupt other
> countries, we can expect unrest and other repercussions to mount.
>
>
> Decades of easy, cheap, unlimited credit is turning out to be an
> experiment gone wrong. The laws of natural consequences will now
> determine the outcome. Not some petty little bailout plan.

Great Depression, Ominous Political Headwinds and the S&P 500

Dear carey_jim: Yes, the appeasement of Hitler should be left for another forum, another time. But just to clarify---and the article format is obviously limited in this regard--my view is that the "rapid" erosion of economic conditions caught the German Left off guard, thus allowing the Nazi Party to consolidate its hold. I agree with you in the sense that the Great Depression did not, by itself, cause fascism; only the underlying conditions towards that end. Many thanks for your observation. - Rakesh

On Jan 08 01:25 PM carey_jim wrote:

> Rakesh:
>
> You clearly hit a nerve with your article!
>
> Obviously, politics, religion, culture and history (have I missed
> anything?) are important and often trump economics, which is based
> on simple, common sense rules for trading goods and services with
> other people and countries.
>
> I have to dispute some of your facts, however.
>
> First, Germany was only a democracy for a short time after World
> War I and this democracy was imposed by the victorious powers. Germany
> had only known totalitarian governments before that.
>
> So it isn't accurate to say that the people chose Nazism (fascism)
> over communism/socialism because of the Great Depression.
>
> In fact, the Nazi party destroyed the socialist and communist parties
> in Germany by imprisoning and often simply liquidating (murdering)
> them along with other liberals, Jews, homosexuals, and other left
> wing liberal undesirables.
>
> Most people don't know that Hitler maintained that his main purpose
> was to rid Germany and Europe of Jewish based socialism and communism
> and 'race poisoning' (which included gypsies, Jews and Slavs) and
> that he did not want to fight with either Britain or America both
> of which he considered racially similar to Germany.
>
> Hitler did, however, state that he wanted to purify America of its
> African Americans, Mexicans and Native American populations,etc.
> but that is another story. He was ambiguous about Asians in America
> because of his alliance with Japan but most people think he would
> have stabbed Japan in the back once he achieved world domination
> and would have enslaved Asians also.
>
> Hitler and the Nazis (fascists) hated Russia because they hated communism
> and they also considered the Slavic peoples to be subhuman (sub Aryan)
> and only worthy of being slaves to Aryans.
>
> They planned to liquidate as many Slavs and possible along with Jews,
> etc. and about one third of all people killed in German concentration
> camps were gypsies, Slavs, homosexuals and socialist/communists.
>
>
> I might add that America faces a much greater threat from fascism
> today than from socialism, which barely exists here (post office,
> public school system, Tennessee Valley Authority, etc.) oldamericancentury.org...
>
>
> The word Nazi is an abbreviation of Nationalsozialismus which obviously
> means national socialism but Germany was not socialist under the
> Nazis but fascist. www.secularhumanism.or...
>
>
> In fact American firms operated in Germany and were only taken over
> (in the sense of directed but not owned by the German government)
> during the war. It is well-known that American car makers based in
> Germany built the tanks that allowed Hitler to invade Poland in 1939,
> for example.
>
> The irony is that, in America the same companies built the tanks
> that fought those tanks they built for Germany during the war! <br/>
>
> The story of American upper class appeasement and admiration of Hitler
> and even collaboration with Nazis, is an interesting one but controversial,
> of course. I'll leave that for historians to debate: www.amazon.com/George-...;s=books&amp;qid=1...
>

Great Depression, Ominous Political Headwinds and the S&P 500

Dear Socialism cannot compete: The point to be made here is that though Germany did witness an intense ideological struggle between the Hegel-Marx school and the Mien Kampf school, the rapid deterioration in economic conditions following 1929 caught the German Social Democratic Party and the German Communist Party (both advocates of the former school) totally off balance. Some analysts of that era even suggest that the sheer "speed" of the deterioration made the Nazi solution more appealing to working Germans, than the socialist solution. But more on this issue at another more approriate time---I just wanted to draw a distinction. Many thanks- Rakesh


On Jan 07 12:48 PM Socialism cannot compete! wrote:

> "Without the Great Depression, it is difficult to visualize the sharp
> rise in the popularity of the Nazi Party."
>
> While it is clear that the Depression hastened the rise of the Nazi
> party, it is equally clear that it (or something much like it) was
> coming regardless -- Nazism was a result of atheistic Hegelian-Marxist
> philosophies taking hold, not of poor economic conditions, which
> merely served to increase its palatability. If you look around the
> world today, you will see those same Hegelian-Marxist philosophies
> have taken hold in many other places, as entailed by notions that
> the individual is there for the good of the state, rather than vice-versa.
> And if there is no God and no intrinsic, infinite value to each and
> every life, including those who are perhaps deemed "inferior" by
> way of genetics, disability, or age...then we are free to choose
> who is of benefit to society...or is just a cost that can be eliminated.
> Here in the U.S. we already do this -- we call it a "woman's freedom
> to choose". Not unexpectedly, there has been an economic cost --
> over 35 million potential workers, taxpayers, and home buyers were
> not born as a result.
>
> Wake up people.

Great Depression, Ominous Political Headwinds and the S&P 500

You make a very strong point, prudentinvestor, in terms of "interconnected societies". Earlier in the 20th century, before the Second World War, many countries of the developing world were largely "natural economies" where village- and district-level demand and supply factors were paramount. All that changed in the modern era. This transition of "connection" is an interesting subject by itself, and perhaps an important study today. Many thanks - Rakesh


On Jan 07 09:16 AM prudentinvestor wrote:

> Rakesh, I agree that the global economic order is shaky, and the
> connection between economics and politics creates unknowns.
>
> Basic economics suggest that a disparity between standards of living
> cannot persist between interconnected societies that have similar
> capability and productivity. The standard of living disparity between
> the West and Asia was possible when their economies were disconnected,
> and there was disparity in their capabilities. With globalization
> and the shrinking disparity in capability, the standards of living
> must converge. How this paradox will be resolved, possibly within
> the next decade or two, is still unclear, and may well create political
> problems, not just economic ones.