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Now the IMF's chief economist Olivier of on job yesterday downplayed the possibility of -- Great Depression but he did use that he would he did say -- -- While we close to that let's ask her how much Cato Institute senior fellow and the all -- of FBI -- folly how Roosevelt and his new deal -- -- the Great Depression.
Jim welcome to the program could this recession on -- most people agree wherein all going into -- recession do you think it could turn into a depression.
I think that's highly unlikely because the Federal Reserve.
Has been pumping out huge amounts of money into the banking system to maintain liquidity so I would expect that eventually.
That we'll have an effect on and before too long another year or two we may be facing a serious inflation problem but right now there.
We're dealing with the collapse.
The back in the day in the nineteenth -- -- -- I was always told that two of the big reasons but Tony that 29 crash into the 1930s depression.
Was that Hubbard -- of -- signed legislation to raise taxes on the rich and then signed Smoot -- which was a restriction on free trade.
Now both of -- similar proposals not quite as drastic but similar proposals are on the table from one of the presidential candidates.
Could that tennis towards a depression.
Well it certainly doesn't help in the case of the Great Depression the initial.
Cause of -- direct cause was bungled.
Federal Reserve policy in an effort to curb what they considered.
And out of control stock market they caused a contraction and they were very slow to recognize.
How serious that contraction was.
And then president Hoover.
Did a number of things to try to prop up prices.
And and and wages which made it harder to employ people and then the final blows as you mentioned.
-- these Smoot Hawley tariff in 1930.
That sent tariffs up as much as 60%.
Which throttle trade and then -- -- many taxes in 1932.
I gotta say Joseph a little uncomfortable trying to draw parallels between -- put in on in the great depression and today so let's fast forward to today.
There is a proposal on the table for a stimulus two package.
Another 150 billion dollars I take it you would -- fight about priming the pump.
No absolutely no -- And -- have a multi trillion dollar economy these these this so called stimulus packages have very little effect.
They take quite a while to play through.
I think what we need is for the Federal Reserve.
Which played a role in bringing on the current crisis but when Alan Greenspan was forcing down interest rates.
In the early years of this decade.
-- which it is essentially a subsidized lending.
Okay Jim -- saw it out of time but we appreciate your presence on the program today thank you very much.
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