Salem, Illinois, 1930s

Rothstein was hired by the federal government to produce emotionally-manipulative photographs justifying New Deal policies. Still, a lot of his pictures offer striking images of the American past. Anthony Luke photo site.

From (NSFW) Fred Lapides.

Really, when you think about it, Barack Obama ought to be hiring scads of photographers to run around the country photographing people laid off and unable to find work, foreclosed houses, property auctions, closed businesses and other evidence of what his Second-Major-Attempt-at-Bringing-Socialism-to-America has achieved. Maybe with luck, we, too, could have a drought and a Midwestern Dust Bowl, too.

Money velocity has recently declined far below any point during the Great Depression of the 1930s.

Tyler Durden argues that the real state of the US economy, measured by velocity of money, is today far worse than it was during the Great Depression, and federal monetary easing is a disastrous policy certain to produce the same result very shortly in the United States that it did in Weimar Germany.

Velocity of money is the frequency with which a unit of money is spent on new goods and services. It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling). In a healthy economy, the same dollar is collected as payment and subsequently spent many times over. In a depression, the velocity of money goes catatonic. Velocity of money is calculated by simply dividing GDP by a given money supply. This VoM chart [above] using monetary base should end any discussion of what ”this” is and whether or not anybody should be using the word “recovery” with a straight face.

In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression. Hard to believe, but the guy who made a career out of Monday-morning quarterbacking the Great Depression has already proven himself a bigger idiot than all of his predecessors (and in less than half the time!!). During the Great Depression, monetary base was expanded in response to slowing economic activity, in other words it was reactive (here’s a graph) . They waited until the forest was ablaze before breaking out the hoses, and for that they’ve been rightly criticized. Our “proactive” Fed elected to hose down a forest that wasn’t actually on fire, with gasoline, and the results speak for themselves. With the IMF recently lowering its 2012 US GDP growth forecast to 2%, while the monetary base is expanding at about a 5% clip, know that velocity of money is grinding lower every time you breathe.

The Fed’s refusal to recognize the importance of velocity of money quickly goes from idiotic to insidious. Here’s a question: If I give you 50¢ and as a result of that transaction, you owe me $1.00, what interest rate have I charged you? Obviously, I’ve charged you 100% interest. ….

In 2011, every dollar of GDP growth created $2.08 in debt. In real life, that’s 108% interest plus the nominal rate, and our twisted leaders want you say, “Thank you sir, may I have another!”

2011 wasn’t an anomaly either; it’s the new normal.

Read the whole thing.

Hat tip to the News Junkie.

The Fiscal Times reports that the United States is experiencing a level of dependency on government unknown since the depth of the Great Depression.

For the first time since the Great Depression, households are receiving more income from the government than they are paying the government in taxes. The combination of more cash from various programs, called transfer payments, and lower taxes has been a double-barreled boost to consumers’ buying power, while also blowing a hole in the deficit. The 1930s offer a cautionary tale: The only other time government income support exceeded taxes paid was from 1931 to 1936. That trend reversed in 1936, after a recovery was underway, and the economy fell back into a second leg of recession during 1937 and 1938.

Steve Tuttle, in Newsweek, nominates his frugal parents as ideal role models for the Age of Obama, the new era of poverty and scarcity in which thrift is a survival skill.

Last summer I was at my parents’ cabin in rural Virginia and I noticed a dead mouse in a rusty old trap. I tossed it in the trash. Later that day I told my dad about the mouse, and he asked, “Where’s the trap?” I told him it looked as though it were falling apart, and I’d thrown it out with the mouse still attached. He looked at me as if I’d punched him in the face. My mom chimed in: “We’ve had that trap since we got married!” I wasn’t sure she was joking, and they got married almost 50 years ago. I sheepishly dug it out of the garbage and loaded it up with cheese again. Now it’s become one of those perennial things they bring up every time I go home: “Remember when Steve threw out the mousetrap, mouse and all!?” This is followed by shuddering and head shaking, as they silently wonder where it all went wrong.

What Tuttle doesn’t seem to realize is that his parents are simply typical representatives of an older, working-class life style in which cash was in severely limited supply and in which one’s own time in the form of labor would routinely serve as a substitute.

My generation always blamed our parents’ resistance to our own preferred high consumption economic style as the product of the psychic trauma of living through the Great Depression.

A lot of people on the left these days seem to be rejoicing in the arrival of economic bad times the same way many Britons and other Europeans welcomed the outbreak of the First World War, as a purifying fire that would sweep away corruption and decadence and which would ennoble those who passed through the flames. Well, we all know how well things worked out for those Europeans of the WWI era.