Lets Repeat the Mistakes of the Past by Turning to the Extreme Right
If we do not learn from that past we are condemned to repeat it. The political group in the US that believed that small government and that an unregulated market is a good thing gained enough political power to put its ideas into practice and destroyed the US economy and as a result the world economy.
There were many causes of the economic collapse but it started with a financial one. A small group of people made off with most of the money in the financial system. The lack of money convinced those in power that almost no business was financially viable. Normally we think of companies that make money as good companies and those who lose money as bad companies. We think of a company as making money if it sells a good or a service for a profit. There is another way to make or lose money based on what the company came be sold for. If a person steals the money available to buy a company then that company is worth nothing even if it makes a great deal of money, A financial crisis like the one we have now can lead to economic destruction if companies are closed because on paper they are worth nothing.
If the stock market drops low enough then the money a company can be sold for will drop and the company may go out of business. Groups of investors drive down the price of stock by selling stocks short. We all know the idea of buying a stock and if it goes it the stock can be sold for a profit. The problem is a stock can only be worth so much which limits how much money can be made. One can do the opposite by selling a stock that one doesn't have and buying it later when it is time to deliver the stock to the new owner. If more people are willing to sell a stock at any price then there are people willing to buy the stock then the stock can become worthless. The term bear raid is use to describe an event where many people get together to sell stocks and drive the price down to zero,
A bear raid was important cause of the stock market collapse in 1929 that lead to a world wide depression. In order to prevent future depressions laws were passed to prevent bear raids. After that regulations in the US increased and increased to the point to where the US economy was on the verge of collapse.
As a result many people in power came to believed that small government and an unregulated market was a good thing. They reduced the size of government and the amount regulations and the economy improved. Finally laws designed to prevent bear raids were scraped and the bear raids resumed. The US in terms of the size of government and the amount of regulations became just as it was in 1929 as a result US economy and the world economy was destroyed,.
There were many causes of the economic collapse but it started with a financial one. A small group of people made off with most of the money in the financial system. The lack of money convinced those in power that almost no business was financially viable. Normally we think of companies that make money as good companies and those who lose money as bad companies. We think of a company as making money if it sells a good or a service for a profit. There is another way to make or lose money based on what the company came be sold for. If a person steals the money available to buy a company then that company is worth nothing even if it makes a great deal of money, A financial crisis like the one we have now can lead to economic destruction if companies are closed because on paper they are worth nothing.
If the stock market drops low enough then the money a company can be sold for will drop and the company may go out of business. Groups of investors drive down the price of stock by selling stocks short. We all know the idea of buying a stock and if it goes it the stock can be sold for a profit. The problem is a stock can only be worth so much which limits how much money can be made. One can do the opposite by selling a stock that one doesn't have and buying it later when it is time to deliver the stock to the new owner. If more people are willing to sell a stock at any price then there are people willing to buy the stock then the stock can become worthless. The term bear raid is use to describe an event where many people get together to sell stocks and drive the price down to zero,
A bear raid was important cause of the stock market collapse in 1929 that lead to a world wide depression. In order to prevent future depressions laws were passed to prevent bear raids. After that regulations in the US increased and increased to the point to where the US economy was on the verge of collapse.
As a result many people in power came to believed that small government and an unregulated market was a good thing. They reduced the size of government and the amount regulations and the economy improved. Finally laws designed to prevent bear raids were scraped and the bear raids resumed. The US in terms of the size of government and the amount of regulations became just as it was in 1929 as a result US economy and the world economy was destroyed,.
posted by flamestarrants | 3:01 PM
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