Did FDR's policies help us get out of the Great Depression?

[PubliusInfinitum]

Well, given the present ratio of management earnings to those that do the actual work, I think we need to give the unions far more power.

LOL... Of course ya do... But you do so on the grounds of a myth where Management is not due its earnings... Here's the thing... No management, no contract; no contract, NO labor... Now what percentage of -0- do you feel labor would be happy with? I say we give them all of it... just to be fair. But clearly you'd disagree.

Now before ya run to dismiss this, TRY to realize that this is, more or less, the official position of the UAW with regard to its GM contract right now... "Screw YOU! We're not giving another cent..." Well that sounds MOY MACHO to the Union flunkies, I'm sure; right up to the point where GM closes its doors and they (your Union Flunkies) are faced with a reality wherein they're looking at 're-training' to become a government paid functionary for $8.50 an hour, which includes benefits.

Now if we could just get Toro to paste us up a slick little chart to show how this highly likely scenario would effect the 'flationary curve... I mean clearly the cost of goods remains the same, the mortgage remains the same, but the available income... down 60/hr over 40/wk... and of course 52 weeks a year... given 'vacay' is reset to zero. So that's quite an adjustment...

Now the great thing for you here is that you can then blame management for the disaster and we do so in such a way as I would summarily agree... and wouldn't that be nice? Comity on the blog at long last... Impericists all...

In that... Management made an egregeous error in allowing their shops to EVER have become unionized... their decision to not shut those factories down and move them to Kentucky 60 years ago... where those people would have HAPPILY worked for a decent days pay for a decent days work; vastly improving THEIR LIVES; and where the resulting macro would have provided much less expensive cars and trucks to the economy over the whole of that period, easing inflationary pressures across the board.

LOL... Good call dipshit.

 

[editec]

Deep thought:

Conservatives don’t know what the fuck they’re talking about on economic policy.


The recession began in December 2007 according to the National Bureau of Economic Research.

A cursory review of the posts on this forum and other internet forums show that during the time of this recession, conservatives have been posting threads that the economy was pretty darn good, the fundamentals of the economy were strong, that the bush tax cuts for the rich were supposed to usher in an era of awesome job growth, and the government should deregulate the markets and corporations.

The only proper response to a conservative lecturing you on FDR or economic policy in general is to laugh them out the room.

I cannot speak to the history of this board, but I was having exactly the same arguments with self-roclaimed conservative on another board, and they too were telling me that we were not in a recession, that the economy was fundamentally sound, that FREE TRADE was making us all rich and that anyone who was not rich was basically a loser who deserved to die from poverty.

These were also the same people who insisted for years that there was no glaboal warming, and who once they could not longer live in that denial are not telling us that while global warming is happening mankind has had aboslutely NOTHING to do with it.

Debates like these are happening everywhere where people meet to discuss our times.

 

[editec]

Deflation isn't all bad. .

Damned nice post, Toro.

Basically SHOCKS TO THE SYSTEM either way are highly disruptive to the economy.

I can imagine a society which has been in a long term DEflationary cycle which has structured itself to accomodate that reality.

It's going from an economic system which is structured with the assumption of inflation to a DEFLATIONARY state which is so devasting to the society.

And you know the other problem is just that the system we had was structured so UNFAIRLY to the benefit of capital that it was literally destroying itself.

I'll just keep saying this over and over and over until it sinks in

You cannot have a consumer driven economy and systematically make the majority of working people POORER and expect that "inflation assuming economic system" to not break down.

It just does NOT make any sense to think that a 20% getting richer while 80% are getting poorer is going to sustain a consumer driven economy forever.

AFter the people adjust by sending their women to work, and after the government makes money to cheap so they can keep borrowing to keep spending, something has GOT to give.

And we kept seeing those somethings giving in the form of investment bubbles, and we STILL kept ignoring the BASICS about why those bubbles kept popping.

Now I join with the Austrian economists who say that the FED actually made it worse, but I cannot join with them in saying that if but only the market had been left to itself that this would not have happened, because in large part the market did this to ITSELF.

Those with far too much money naturally invested it. But since they DID have SO MUCH extra money, their investment dollars were competing with all the other investment dollars in a market where puchasing was slowing down.

How on earth can investment going into the supply side of a consumer economy pay off when the consumers are losing thje necessary purchasing power to absorb what these companies can make?

Of course, there were other problems too.

FAR TOO MUCH money that people were spending was going offshore, thus its' multiplier effect was lost to our economy, too.

There ain't no free lunch in economics, not even for the rich and powerful.

Eventually their collective greed (coming at us in the form of tax breaks for billionaires, and FREE TRADE for inustrialists, among other policies and regulations) made enough people too poor to keep playing their role in the consumer economy.

This seems so obvious to me that I find it amazing that everyone can't see it.

The supply side HAS to have enough capital to create wealth, and the DEMAND side ALSO has to have enough money to absorb all that supply.

We have experienced the WORST of both AUSTRIAN SCHOOL Economics and KYNESIAN FEDERALISM which was attempting (in the form of cheap money) to cope with the effects of all be help we gave to the supply side.

And then...the bankers got STUPID, just as they ALWAYS DO, and they stopped investing in supply side because all the real ROIs were in what?

Buying and selling risk and debt, that's why?

Antying could have toppled the house of cards our society has been building for the last fourty years, folks.

And yeah, that's right, Clinton's so called golden age was only golden for about 40% of the population.

For the rest of us things were already getting pretty grim.

But of course, as long as that 60% are thought of as expendable losers who we can not give a shit about, well then we can delude ourselves that everything is okay when the wolf is outside the door.

GREED is NOT good, folks.

Perception is NOT reality.

NOBODY is a loser and workers are NOT expendable because why?

Because they are CITIZENS with whom we SHARE this nation's bounty.

We got rid of welfare for the poor workers who get marginalized?

Well folks, hand onto youy hats because we are about to become that welfare state that you were all so afriad of.

 

[Avatar4321]

indeed, putting Americans to work after the collapse of employment was just like a ball and depression chain!




stupid, stupid capitalists.

Capitalism is merely the natural law of economics. When there is no interference its quite effective and getting people to work.

 

[PubliusInfinitum]

ROFLMNAO... Oh GOD that's precious... Amongst other things, Hoover went along with a massive contraction of the money supply by the Federal reserve from '29 -32 which caused the bank failures, which only exacerbated the money supply shrinkage and public panic; Hoover also signed Smoot- Hawley raising import tax in 25,000 imported product categories to 60%, causing a retaliation by most of the free world... causing our exports to tank... AGAIN INFLUENCING DEFLATION; he further promoted preventing banks from 'branching' which prevented diversification of bank portfolios... ALL OF WHICH lead to massive deflation... He then signed the 'Revenue Act of '32' which was the largest peace-time tax increase in US history at the time... raising the top marginal rate from 25 - 63%...

You apparently have a reading comprehension problem, ExtremusInfinitus, because I mentioned that the Fed's tight monetary policy and withdrawal of reserves from the banking system as the primary cause of why a sharp recession became The Great Depression, which was exacerbated by a tax increase and the Smoot-Hawley tariffs.

Well then... if that were true... and your position is that FDR's policy extended a typical recession into a massive world-wide economic depression, then you'd be celebrating our little alliance, all based of course upon the heady heights of empirical evidence... instead of this hostile knee-jerk reaction which intentionally avoids the argument being presented and builds a lovely red-herring in the process.

The fact is that the issue here is "DID FDR's policies help get us out of the Depression... I say NO, FDRs policies severely PROLONGED and intensified the depression and that LEFTIST ECONOMIC POLICY IS 100% responsible FOR THE ENTIRE THING. You want to split the baby, distract the discussion into some pedantic discussion of deflation, with charts and graphs that are designed to lend an unearned credence to this dodge; they're lies and lies of the 'damnable' variety... Allow an empirical demonstration:

When FDR was elected in 32 he further increased regulation cost and taxation on the market and raised the top marginal rate to 80%. At the same time, in this frenzy of Keynesian progressivity... State and Local governments began to implement their OWN incentive killing TAXATION on personal and Corporate income... adding FURTHER DEFLATIONARY influences... add to that the National Industrial Recovery Act of 1933 which amounted to a litany of price freezes in an effort to slow deflation WHICH HE AND HOOVER CAUSED... ONLY ADDING TO DEFLATIONARY PRESSURE by driving the cost of business beyond a sustainable level, causing GREATER LAYOFFS, DECREASING THE SIZE OF THE VIABLE MARKET... by substantially reducing the number of people with sufficient discretionary money to BUY MANY PRODUCTS...

Inflation 1929-1939

St. Louis Fed: Series: CPIAUCNS, Consumer Price Index for All Urban Consumers: All Items

Oooh, so sorry to blow your cute little ideological thesis to bits, but deflation ended in May 1933, a few months after FDR was elected.

Remember, empiricism > ideology

Notice the point highlighted in red... Notice that at the point where YOU declare deflation was somehow MIRACULOUSLY checked... You just blurt out that 'deflation ended in 1933...' Yeah... STATISTICAL DEFLATION... Sadly, for YOU... statistical deflation isn't relevant... What IS relevant are the effects FROM FDR policies and how those effects related to the economy and MOST PARTICULARLY... HOW THOSE POLICIES HELPED OR CAUSED INJURY TO THE US ECONOMY AND THE DEPRESSION:

FDR implemented disastrous policy... policy such as the National Industrial Recovery Act of 1933 which froze wages, froze prices, destroyed massive amounts of livestock and agriculture... spurred an already heavily problematic employment problem and did so PURELY through LEFTIST POLICY... Statistical deflation was checked because the government disallowed any reduction in the price of goods and the price of labor... BUT THIS CAUSED GOODS AND LABOR TO CRAWL BEYOND THE MEANS OF A LARGE SEGMENT OF THE MARKET which had realized the incontestable DEFLATIONARY effect of their being unable to BUY MOST OF WHAT THE MARKET WAS SELLING... That FDR froze the priceof a blender is what is reflected in YOUR CHART... THAT BLENDERS DIDN'T SELL WORTH A DAMN is NOT. Thus it's a lie...

Now you like to think of yourself as bright fellow; now tell us our empirically bull-headed friend... what happens to a prices when the market isn't buying... when sales go down... where do prices go? You want to declare that deflation was checked in '33... but this was because the government passed policy which forbid the market to react to the natural order... creating a vacuum in the market... What does nature do with vacuums? Hmm.... A smart fellow such as yourself; one who abhors ideological thesis... an empiricist... Surely you can explain what happens when mankind tries to plug the dike of the natural order. Does the water which created the pressure that caused that hole... does it just stop? Or does it simply find another path?

Let's put it another way... In an aircraft wherein the airframe is well balanced, if the pilot of that aircraft manipulates the flight surfaces so as to prevent sufficient air to pass over the wing surface to create lift; the reaction will certainly be that 'flight' will soon be exchanged for a state somewhat less stable... some call it falling... typically one wing will lose lift first and the airframe will 'turn' into the void of lift... typically referred to as a 'spin;' This of course results in the aircraft plummeting to the ground, spiraling into the direction of the initial loss of lift...

Flight is a pretty easy thing for most people... pull back on the flight controls and the plane goes up... push down on the flight controls and the plane goes down... pull left and it turns left, right and it turns right, etc...

Now in the spin... the plane is going down... many factors have occurred which have brought the aircraft to this flight condition... and we could discuss each and every little decision of known factors, and we could argue the endless lists of potential unknowns, advancing conjectural thesis after conjectural thesis on the whys and wherefores relevant to this potentially lethal condition known as the positive spin...

Keynesians would tell us that because the plane is rapidly losing altitude... the thing to do is to quickly pull back hard on the flight controls... as this is the method by which the flight surfaces influence the airstream to produce an increase in altitude. But of course, they would be wrong... because the aircraft is NO LONGER FLYING... The aircraft's attitude relevant to wind flowing over its surface is so severe that lift is no longer possible; thus nature requires that the attitude of the aircraft be returned to an attitude which encourages lift BEFORE the flight controls will produce reactions of a typical nature. Thus, the flight condition noted above when piloted by Keynesian policy would soon realize a critical loss of altitude and violate nature's law which speaks to matter, time and space; for which the violators will suffer the severe consequences...

Now the thing to know here is that a stable, well balanced aircraft is designed to agree with nature's laws... thus assuming sufficient altitude, the operator could simply remove their hands and feet from the flight controls and the aircraft would nose over and return to a recognizable flight condition; from which most any operator would easily retain balanced flight.

Absent sufficient altitude... both the novice and the Keynesian are going to crash and very likely die and for the same reason. The only distinction being that the novice had a chance; all he needed was sufficient altitude for the well balanced aircraft… but the Keynesian steadily made survival less and less likely with each counter-productive influence on the flight controls...

Look dumbass... NONE OF THIS IS COMPLICATED. Nature works on SUPPLY AND DEMAND... when DEMAND IS HIGH AND SUPPLY IS DOWN... PRICE GOES UP... when DEMAND IS DOWN PRICE GOES DOWN... And FYI: Price going down equals DEFLATION.

Hey, guess what - The Great Depression isn't complicated! Of course, to linear thinking ideologues, complicated matters never are. Just get a cocktail napkin and check those ideological boxes, and voila!, you have all your answers!

Yes yes... I can see that it's very important to you that this be a complex equation, that you've built a great deal of self-esteem on the endless minutia and the rationalizations from which such can sustain... In the flight scenario, you'd chart the flight path, graph the attitude of the individual flight surfaces... do a psychological profile of the operator; chart and graph all known conditions to explain what amounts to a simple understanding that the operator ignored numerous warnings of stalled flight, proceeded through those warnings until flight was interrupted and failed to execute proper flight recovery methods to the controls in sufficient time to avoid a critical loss of a relative altitude, which simply put means: "The pilot stalled the aircraft, which resulted in a spin and he crashed."

Not to worry of empirical one... the world needs anal retentive academics too... if for no other reason than comic relief.

Now the empirical fact remains that FDR PROLONGED AND INTENSIFIED THE DEPRESSION BY IMPLEMENTING COUNTER-PRODUCTIVE LEFT-THINK POLICY.

 

[BaronVonBigmeat]

Let me cut through the bullshit of this goofy thread.

Let us assume for purposes of argument that FDR's policies to reliquify our economy were, as his detractors say, a complete waste, shall we?

Okay, so according to his detractors, the WAR saved us from a depression, right?

Okay, why?

What happened to make WWII the savior of our society?

What did our government DO to save our economy, please?

According to them, WWII "got the nation moving again" or some such thing. Of course war is just another big-spending government program, so there is no logical reason to assume that building bombers should be any different than building bridges. At least bridges have *some* benefit for the average guy, even if it they are built over budget and in politically influenced locations.

The truth is, war can reduce unemployment. Well yeah, of course. You can do the same thing by hiring people to dig holes and fill them the next day. Any country that ever had a communist government had full employment. But unemployment is just one measure of economic well-being. You have to consider economic growth, cost of living, shortages, and so forth.

The bottom line is, during WWII people worked long hours and had little to spend their money on. Take in the whole picture, and you could probably argue that it was the worst economic period in our history. Our current war is extremely expensive, and it has not given us prosperity. Things look even worse when you use numbers that are undoctored. See shadowstats.com, the recession didn't begin in 2007 as someone said earlier, in reality it began in 2006--and the previous boom was rather feeble.

But yes you're right. The "war is good for the economy, but socialism is bad" is illogical. War IS socialism.

 

[PubliusInfinitum]

According to them, WWII "got the nation moving again" or some such thing. Of course war is just another big-spending government program, so there is no logical reason to assume that building bombers should be any different than building bridges. At least bridges have *some* benefit for the average guy, even if it they are built over budget and in politically influenced locations.

The truth is, war can reduce unemployment. Well yeah, of course. You can do the same thing by hiring people to dig holes and fill them the next day. Any country that ever had a communist government had full employment. But unemployment is just one measure of economic well-being. You have to consider economic growth, cost of living, shortages, and so forth.

The bottom line is, during WWII people worked long hours and had little to spend their money on. Take in the whole picture, and you could probably argue that it was the worst economic period in our history. Our current war is extremely expensive, and it has not given us prosperity. Things look even worse when you use numbers that are undoctored. See shadowstats.com, the recession didn't begin in 2007 as someone said earlier, in reality it began in 2006--and the previous boom was rather feeble.

But yes you're right. The "war is good for the economy, but socialism is bad" is illogical. War IS socialism.

Come on GUYS!

What did war do? It lifted government interference from the market! Regulations were slashed, 'GET IT DONE' was the mantra... productivity went through the ROOF... PRODUCTION began in earnest, with minimal interference from (you know who...') the government made it possible for anyone with a desire to produce TO PRODUCE.

Now the truth is, that this SAME formula works perfectly every time it is tried... sure, there is going to be a cycle, every single time; where a product or service comes into existence, finds a demand, the market responds and, inevitably, demand ebbs as an abundance of supply is realized for the given market... that is IF the government stays the hell OUT of it... the market shifts, supply equalizes and a new cycle begins. It's the natural order and all the cries of misery for those caught in the ebb of a previous flow will not change that. ALL left-think will EVER DO is make matters worse; out off the inevitable and in so store the energy that would have otherwise been expended in the natural shift.

The market did not JUST sell to the government in WW2... thousands of little companies supplied products and services to hundreds of larger companies, who sold their product and services to tens of yet larger companies... did the government get the final bill for war supplies? Sure... Did the government stick it to hundreds of companies that never got paid or were under paid? Sure… Did the government over-pay hundreds of companies that produced crap or failed to meet their quota? Sure... but the fact remains that in the end, the BILL CAME TO THE INDIVIDUAL TAX PAYER... which is where the bill always, inevitably comes. The distinction; what made THE FREE MARKET of WW2 a success and the NEW DEAL a failure is that ONE opened up the market towards a coherent definable goal, where everyone was willing to meet; freeing it from massive regulatory expense and bureaucratic wastes... the other was nothing more THAN regulatory expense and bureaucratic wastes.

One worked, the other didn't... it's no secret which was which and all of the cheer leading for idiotic left-think will never change the simple fact that regulation and taxation are little more than economic drag and there is no means to increase economic momentum by increasing drag; EVER.

 

[editec]

Come on GUYS!

What did war do? It lifted government interference from the market! Regulations were slashed, 'GET IT DONE' was the mantra... productivity went through the ROOF... PRODUCTION began in earnest, with minimal interference from (you know who...') the government made it possible for anyone with a desire to produce TO PRODUCE.

It WHAT?!

Telling the auto industry and every other major consumer goods industry in the USA to stop prducing consumer goods and start producing war material is lifting government interference from the market?

There's my LOL moment of the day.

We essantially went from a fibrilating capitalistic consumer economy to a national socialist wartime economy by GOVERNMENT FIAT overnight and you describe THAT as lifting government interference from the market?

You crack me up, man.

If there's a icon in Wiki to represent the adage that :

There are none so blind as those who will not see.​

it ought to be your picture.

 

[PubliusInfinitum]

It WHAT?!

Telling the auto industry and every other major consumer goods industry in the USA to stop prducing consumer goods and start producing war material is lifting government interference from the market?

Hmmm let's see... I'm building cars which aren't selling and suddenly someone comes in and says "Hey... Can you build me 10,000 tanks? I'll need the first few hundred on Monday... and OH! BTW, here's a check for a ton of cash to get ya started..." that's not him telling me stop building cars... that's him telling me that I am now building tanks... because ya see dickless, I am not building cars because I love to build cars, I'm building cars because I love TO CASH CHECKS...

So yeah... that's what that is... the government getting out of my way and providing me with an opprtunity to CASH CHECKS.

There's my LOL moment of the day.

We essantially went from a fibrilating capitalistic economy to a national socialist economy overnight and you describe THAT as lifting government interference from the market?

So you're not bright enough to realize tha th New Deal was fascism through and through? You apparently don't understand that the New Deal was the US government essentially taking control of the means of production?

Can ya show this board the US Law that ordered US automakers out of the auto-industry? How about an EO? Something that says "IM THE GOVERNMENT AND I'M TAKING OVER YOUR BUSINESS!"

'Cause I gotta tell ya, I'm not aware of that having ever happened... I'm prepared to take the education... so just post the evidence wherein the US government forcibly stopped auto-production and began to manage the US auto-industry. Of course your failure to produce the statute wherein the US government took control of the US auto industry, forcing them to build war material... will result in you being subjected to the usual humiliation.

And Best of luck... you have all day.

You crack me up, man.

There are none so blind as those who will not see.

Oh ain't that the truth... quit wastin' time and go drag up that supporting evidence; OKA: bracing yourself for further humiliation. And remember... a law wherein the US government says "We need tanks and you're our guy' isn't going to help... so re-read your position, recognize where you've placed yourself and just come to understand that once it quits hurtin'... it'll feel MUCH BETTER~

 

[mash107]

There should be no question at all that FDR's policies helped us out of the GD. The growth figures speak for themselves as the timeline below shows. Arguments against tend to be part of the ideological 'conspiracy' that only mere humans left alone can bring economic nirvana through their intelligence, wisdom, and high moral principles. Witness only the recent bubble and crash that demonstrates so clearly this wisdom. [scarcasm off] The war while important to economic success and the defeat of Germany Japan brought back a sense of we can do it and transformed the economy and the mood of the nation. FDR's tacit promotion of unions and a fair shake for all had enormous impact often overlooked by revisionist jackasses.

If interested, this book is worth the money unlike lots of things today.

Amazon.com: The Great Depression and the New Deal: A Very Short Introduction: A Very Short Introduction (Very Short Introductions): Eric Rauchway: Books

Every investor should re-read this every year.

Amazon.com: A Short History of Financial Euphoria (Whittle): John Kenneth Galbraith: Books

depression timeline
Timeline of the Great Depression

Revisionist history means history that was revised to suit the policies of todays' political structure, and that's is exactly what's happening. To support a policy of government excess and wars, our two political parties are revising history to try to convince us that this is indeed stimulative for the economy. Nothing further could be from the truth. Hoover and FDR had indeed exacerbated the recession into a depression which lasted 15 years instead of a recession lasting one or two years. Instead of relying on sound economic judgment, Hoover tried to raise wages in a deflationary period, yielding mass unemployment, more than what resulted from the bubble economy crashing in 1929 and destroying those non-viable jobs. FDR continued the failed interventionism by taking money away from economic growth to build dams and other useless public work projects. Sure, it created a few non-viable jobs, but the market would have created a lot more jobs, and we would've recovered much sooner. Instead of learning from these disastrous economic policies, our economic leaders are repeating the very same mistakes. People should be saving money and investing for future economic growth; however, they're being pushed to consume beyond their means in an attempt to reflate the non-viable bubble.

 

[PubliusInfinitum]

Revisionist history means history that was revised to suit the policies of todays' political structure, and that's is exactly what's happening. To support a policy of government excess and wars, our two political parties are revising history to try to convince us that this is indeed stimulative for the economy. Nothing further could be from the truth. Hoover and FDR had indeed exacerbated the recession into a depression which lasted 15 years instead of a recession lasting one or two years. Instead of relying on sound economic judgment, Hoover tried to raise wages in a deflationary period, yielding mass unemployment, more than what resulted from the bubble economy crashing in 1929 and destroying those non-viable jobs. FDR continued the failed interventionism by taking money away from economic growth to build dams and other useless public work projects. Sure, it created a few non-viable jobs, but the market would have created a lot more jobs, and we would've recovered much sooner. Instead of learning from these disastrous economic policies, our economic leaders are repeating the very same mistakes. People should be saving money and investing for future economic growth; however, they're being pushed to consume beyond their means in an attempt to reflate the non-viable bubble.

Well said... the 'FDR was GOD' thesis is little more than the same revisionist pap that re-lables the fascist and the communists as capitalists... for those that haven't seen this in person, just check out my sig for one of the latest examples...

It's what happens when one gives the sub-intellect a place at the big table, having felt sorry for the taller people chronically relegated to the kiddy table...

 

[editec]

Hmmm let's see... I'm building cars which aren't selling and suddenly someone comes in and says "Hey... Can you build me 10,000 tanks? I'll need the first few hundred on Monday... and OH! BTW, here's a check for a ton of cash to get ya started..." that's not him telling me stop building cars... that's him telling me that I am now building tanks... because ya see dickless, I am not building cars because I love to build cars, I'm building cars because I love TO CASH CHECKS...

No doubt, except that is NOT what actually happened is it?

And iot is lightyears away from what you'd written and that which I responded to, isn't it?

So you're not bright enough to realize ...

I bright enough to know when somebody is attempting to cover up for something ridiculous that he's written by moving the goal-posts, Publi.

Do feel free to go back and reread what you wrote, and my response to it, okay?

And pal, I've been reading your posts all along.

You questioning my intelligence is rather amusing.

 

[PubliusInfinitum]

No doubt, except that is NOT what actually happened is it?

And iot is lightyears away from what you'd written and that which I responded to, isn't it?




I bright enough to know when somebody is attempting to cover up for something ridiculous that he's written by moving the goal-posts, Publi.

Do feel free to go back and reread what you wrote, and my response to it, okay?

And pal, I've been reading your posts all along.

You questioning my intelligence is rather amusing.

Is it me... or does THIS post have a decided total absence of ANY EVIDENCE WHEREIN your position:

{The US Government told} the auto industry and every other major consumer goods industry in the USA to stop prducing consumer goods and start producing war material

is supported?

Now how ODD IS THAT? A centrist coming to the table, advancing an EMPHATIC ASSERTION OF FACT and then being unable to support it in the slightest... and demanding that they've been taken out of context, or somehow, otherwise misunderstood.

LOL... Now this is what I absolutely ADORE about text debate... The design of the system completely sets aside any potential for such an accusation to withstand scrutiny.

But that is the nature of the DUMBASS... they place vastly more stock in 'TRY' than "DO"... and they erroneously believe that everyone is a dumbass.

Editec, you stated that you had certain knowledge that the US government had forcibly stopped US manufactureres from producing consumer goods and instead were to produce war materials... you were directly and unambiguously challenged to support that tripe and yes... that challenge was made with a certain knowledge that you could not and thus was designed for little other purpose than to humiliate you and pretty much for no other reason than my own twisted entertainment.

No goal posts have been moved... Now either post a US statute wherein the Congress of the US declared US manufacturing to be under the control of the US government or an Executive Order of the same value... OR ADMIT that you were peddling revisionist anti-American BULLSHIT because when its all said and done that is precisely what you are... A fucking SUBVERSIVE, a leftist that wants people to think she's something else... so she can use the facade of centrist to impart an erroneous element of being 'reasonable...

But feel free to take your time... this isn't going anywhere.

 

[Toro]

Well then... if that were true... and your position is that FDR's policy extended a typical recession into a massive world-wide economic depression, then you'd be celebrating our little alliance, all based of course upon the heady heights of empirical evidence... instead of this hostile knee-jerk reaction which intentionally avoids the argument being presented and builds a lovely red-herring in the process.

The fact is that the issue here is "DID FDR's policies help get us out of the Depression... I say NO, FDRs policies severely PROLONGED and intensified the depression and that LEFTIST ECONOMIC POLICY IS 100% responsible FOR THE ENTIRE THING. You want to split the baby, distract the discussion into some pedantic discussion of deflation, with charts and graphs that are designed to lend an unearned credence to this dodge; they're lies and lies of the 'damnable' variety... Allow an empirical demonstration:

This is not a serious argument. To say that FDR is 100% responsible is utter nonsense, just as it is silly to say that FDR is 100% responsible for the recovery.

Someone searching for answers rather than engaging in intellectual masturbation would realize that the world is complex. The primary cause of the Depression was the Fed with actions taken before FDR ever became President.

Perhaps if you weren't so ideologically blinkered you would see the anti-government argument, i.e. the Fed, sitting right before your eyes. Figure it out.

Notice the point highlighted in red... Notice that at the point where YOU declare deflation was somehow MIRACULOUSLY checked... You just blurt out that 'deflation ended in 1933...' Yeah... STATISTICAL DEFLATION... Sadly, for YOU... statistical deflation isn't relevant... What IS relevant are the effects FROM FDR policies and how those effects related to the economy and MOST PARTICULARLY... HOW THOSE POLICIES HELPED OR CAUSED INJURY TO THE US ECONOMY AND THE DEPRESSION:

FDR implemented disastrous policy... policy such as the National Industrial Recovery Act of 1933 which froze wages, froze prices, destroyed massive amounts of livestock and agriculture... spurred an already heavily problematic employment problem and did so PURELY through LEFTIST POLICY... Statistical deflation was checked because the government disallowed any reduction in the price of goods and the price of labor... BUT THIS CAUSED GOODS AND LABOR TO CRAWL BEYOND THE MEANS OF A LARGE SEGMENT OF THE MARKET which had realized the incontestable DEFLATIONARY effect of their being unable to BUY MOST OF WHAT THE MARKET WAS SELLING... That FDR froze the priceof a blender is what is reflected in YOUR CHART... THAT BLENDERS DIDN'T SELL WORTH A DAMN is NOT. Thus it's a lie...

Now you like to think of yourself as bright fellow; now tell us our empirically bull-headed friend... what happens to a prices when the market isn't buying... when sales go down... where do prices go?

In other words, if prices are too high, then demand collapses. If that's the case, then GDP would collapse. So did it? Let's check.

St. Louis Fed: Series: GDPCA, Real Gross Domestic Product

GDP began rising in 1933. So apparently, demand for stuff that was supposedly "too high" is not true. If it were, GDP would have kept going down. But it didn't because there was no collapse in demand.

So sorry again. Empiricism is a bitch, isn't it?

 

[PubliusInfinitum]

In other words, if prices are too high, then demand collapses. If that's the case, then GDP would collapse. So did it? Let's check.

Well sure... because demand being down would naturally cause a collapse in the GDP... and 'everyone knows' that demand was tremendous in the great depression... That's why US employment struck such massive heights during the 30s... because of high demand.

Of course, stats such as the table below aren't at all indicative of demand... only production... and production was in large measure fixed by FDR's policies which forced industry to produce and FDR's harrasment of businesses that failed to produce is legendary... his chronic cries of “economic royalists” and “privileged princes” against businesses that tried to set production upon demand were chronic... and all part and parcel of FDRs counter productive attempts to stop deflation. Of course his second term anti-trust lawsuits, which people remember as his fight against business were primarily a result of his first term policies... but hey why quibble? and FOR PETE'S SAKE... don't look at the down turn in GDP during THAT period...

But again... I must say what an amazing nerve you girls have... this one a PEACH! It's a rare day when someone trots out US GDP in the 1930s as evidence that demand was just fine during The Great Depression. Hilarious.

 

[mash107]

This is not a serious argument. To say that FDR is 100% responsible is utter nonsense, just as it is silly to say that FDR is 100% responsible for the recovery.

Someone searching for answers rather than engaging in intellectual masturbation would realize that the world is complex. The primary cause of the Depression was the Fed with actions taken before FDR ever became President.

Perhaps if you weren't so ideologically blinkered you would see the anti-government argument, i.e. the Fed, sitting right before your eyes. Figure it out.



In other words, if prices are too high, then demand collapses. If that's the case, then GDP would collapse. So did it? Let's check.

St. Louis Fed: Series: GDPCA, Real Gross Domestic Product

GDP began rising in 1933. So apparently, demand for stuff that was supposedly "too high" is not true. If it were, GDP would have kept going down. But it didn't because there was no collapse in demand.

So sorry again. Empiricism is a bitch, isn't it?

GDP includes government spending. Hell, if GDP was the end all, be all indicator of economic prosperity, why doesn't the government just double or triple the amount of money it spends to ensure "prosperity" for good? The true indicator of prosperity is not some GDP figure, but the standard of living of an average Joe. Gas was, at one point this year, 15-20 times more expensive than it was just 40 years ago. Food is outrageously more expensive, as well as mortgages for homes. Our income surely hasn't increased by the same order of magnitude. Do you have any data as pertaining to the standard of living of a working family during the Depression, and whether or not their lives were made easier or harder by Hoover's and FDR's interventionist policies? I suppose without a baseline to compare Hoover/FDR policies to laissez-faire policies, we'll never have empirical data showing how much better the market is than central planners. But one can perform case study after case study, and conclude that this safely enough.

If there was a figure that measured the amount of capital goods produced by the private economy, even those bought and used by the government, then I'd be all in favor of using this data. This, GDP does not do. And if there was a way of measuring the opportunity costs missed by funding a large dam here, or a war there, then empiricism would be highly useful. However, because no data figures exists on missed opportunity costs, why should anyone discount the fact that the opportunity cost exists, however indefinable it may be? In all cases, the private market makes better use with the same amount of money than the government, so those opportunity costs add up to being much more than the government can ever hope to create.

FDR did not create the Depression, he merely delayed the recovery and laid framework for Social Security and other welfare programs to bring this country to bankruptcy decades later. It's still unfair to blame him, entirely. Hoover was primarily responsible for the high unemployment rate that resulted from him intervening in the economy when the stock market crashed. He had raised taxes, and embraced harsh protectionism, and tried to play with prices, where the only place prices can be determined is the free market. And since there was deflation, these prices had to go down.

 

[mash107]

With respect to deflation being bad for debtors-- I believe this is correct, up to a point. The largest debtor is our government, and now, since inflation will make them pay more for operation, won't they be more in debt as a result? It seems like it's a never ending cycle. Stealing the value of money away so that existing debt is more easily paid, but all the meanwhile, make it harder for government to run the current budget without more borrowing.

It will do us in, it seems, and all it will take is time.

 

[PubliusInfinitum]

GDP includes government spending. Hell, if GDP was the end all, be all indicator of economic prosperity, why doesn't the government just double or triple the amount of money it spends to ensure "prosperity" for good? The true indicator of prosperity is not some GDP figure, but the standard of living of an average Joe. Gas was, at one point this year, 15-20 times more expensive than it was just 40 years ago. Food is outrageously more expensive, as well as mortgages for homes. Our income surely hasn't increased by the same order of magnitude. Do you have any data as pertaining to the standard of living of a working family during the Depression, and whether or not their lives were made easier or harder by Hoover's and FDR's interventionist policies? I suppose without a baseline to compare Hoover/FDR policies to laissez-faire policies, we'll never have empirical data showing how much better the market is than central planners. But one can perform case study after case study, and conclude that this safely enough.

If there was a figure that measured the amount of capital goods produced by the private economy, even those bought and used by the government, then I'd be all in favor of using this data. This, GDP does not do. And if there was a way of measuring the opportunity costs missed by funding a large dam here, or a war there, then empiricism would be highly useful. However, because no data figures exists on missed opportunity costs, why should anyone discount the fact that the opportunity cost exists, however indefinable it may be? In all cases, the private market makes better use with the same amount of money than the government, so those opportunity costs add up to being much more than the government can ever hope to create.

FDR did not create the Depression, he merely delayed the recovery and laid framework for Social Security and other welfare programs to bring this country to bankruptcy decades later. It's still unfair to blame him, entirely. Hoover was primarily responsible for the high unemployment rate that resulted from him intervening in the economy when the stock market crashed. He had raised taxes, and embraced harsh protectionism, and tried to play with prices, where the only place prices can be determined is the free market. And since there was deflation, these prices had to go down.

I agree with most of what you've said here... except to fail to find the leftist policy which caused the depression, born from the typical market correct of 29 is an error in reasoning.

It was leftist policy advanced by Hoover AND FDR who came along and COMPOUNDED IT WITH MORE INTENSE LEFTIST POLICY...

To separate both from their policy is insanity and can only serve to set the stage for the same purveyance of leftist idiocy to once again bring the US economy to its knees... and it is that which we are presently witnessing.

The only distinction is that leftist policy has in large measure stripped the US of a labor-centric economy... Hussein's make-work programs will find few US workers interested in building highways or reparing bridges... few of those UAW workers spoiled with $70/hr contracts for sitting on a assembly line will be interested in such work and for the much reduced compensation.

However, IF leftists could simply be dismissed, then those people could be treated to the natural cure for such indignity... HUNGER... and in short order they'd eagerly seek out such work from private concerns and take it with a renewed appreciation for the opportunity.

 

[Toro]

Well sure... because demand being down would naturally cause a collapse in the GDP... and 'everyone knows' that demand was tremendous in the great depression... That's why US employment struck such massive heights during the 30s... because of high demand.

Of course, stats such as the table below aren't at all indicative of demand... only production... and production was in large measure fixed by FDR's policies which forced industry to produce and FDR's harrasment of businesses that failed to produce is legendary... his chronic cries of “economic royalists” and “privileged princes” against businesses that tried to set production upon demand were chronic... and all part and parcel of FDRs counter productive attempts to stop deflation. Of course his second term anti-trust lawsuits, which people remember as his fight against business were primarily a result of his first term policies... but hey why quibble? and FOR PETE'S SAKE... don't look at the down turn in GDP during THAT period...

But again... I must say what an amazing nerve you girls have... this one a PEACH! It's a rare day when someone trots out US GDP in the 1930s as evidence that demand was just fine during The Great Depression. Hilarious.

I never said demand was "just fine." What I said, in fact what I showed was that GDP began rising in 1933, which is evidence that demand did not collapse as you argued. There is a huge difference. You are saying that FDR caused the Depression. This is simply wrong. GDP turned up a few months after FDR took office. Almost all of the decline in production occurred under Hoover. You might make an argument that the New Deal did not do much to cure the Depression. That may be. I tend to think that liberals put too much stock in the New Deal and that much of the end of the recession was due to prices finally clearing across the economy. But I am not making an ideological argument. I am making an empirical argument. And what we know is that GDP turned upward a few months after FDR came to office. Thus, it is simply dead wrong to say that FDR caused the recession. You want to talk about his second term? Fine. I might agree with you. Raising taxes and balancing a budget during a weak economy is bad policy, not to mention his ridiculous anti-business rhetoric. But that is far different than FDR causing the Depression.

As for the argument of demand versus production, GDP = C + I + G + NX.

 

[Toro]

GDP includes government spending. Hell, if GDP was the end all, be all indicator of economic prosperity, why doesn't the government just double or triple the amount of money it spends to ensure "prosperity" for good?

You've taken a class in basic economics, right? As I posted above, you will thus recognize this equation

GDP = C + I + G + NX

which is the math for the calculation of GDP components from the spending side. It means the total value of all goods in the economy equals consumption + investment + government spending + net exports.

But as you also know from Macro 101, the components of GDP on the spending side must equal the components of GDP on the income side. In this case

GDP = Wages + Profits + Interest + Dividends, Retained earnings and other

Thus, if GDP is rising, income is rising. The distribution of income is another story.

Why doesn't government spend more? In some countries, this is exactly what they do. Government spending is generally beneficial in the economy when market mechanisms fail, or when goods and services are deemed too important to be left to the market, or as a counter-cyclical stabilizer. What are examples of these?

Markets fail when there is something known as a free rider problem.

Suppose there is a street, on which 25 people live, and which suffers from a litter problem. A weekly street-cleaning service would cost $2,500 annually. Suppose that each person is prepared (i.e., able and willing) to pay $100 or more for the benefit of a cleaner street.

If the service is engaged, everyone will benefit. However, it is possible that some people on the street will refuse to pay, anticipating that the service will be undertaken in any event.

Despite the fact they may be prepared to contribute $100, they will claim that they are not prepared to pay, and instead hope that others in the street will pay for the system anyway, and they receive the benefit for no personal expense.

The result is that it is possible no system will be installed, an example of market failure. This is despite the fact that allocative efficiency would be improved.

Free rider problem - Wikipedia, the free encyclopedia

Other examples of market failure are externalities, i.e. pollution, and when the net present value of expenditures cannot even remotely be calculated, i.e. universal education for children.

Example of services deemed too important to be left to the market are the police and the armed forces.

A counter-cyclical stabilizer are social programs, but only to a point. Social programs that cushion income through unemployment are good because it lessens the volatility in the economy. Higher volatility - as any Finance 101 student understands - increases costs in the economy. Social programs that lead to income support that dissuades productivity, however, are bad. In France, for example, they have a generous social system, which discourages work amongst the lowest paid. Average productivity per worker in France is actually higher than in America. However, total productivity per capita is higher in America because the unemployed person who might otherwise take a job at McDonald's in France but doesn't because the government pays him a fair amount has zero productivity while the American worker at McDonald's has positive productivity even though it is low. Aggregated across the economy then, America has higher productivity than France and a higher standard of living for its citizens.

When the government allocates resources away for any of these reasons, then productivity is being destroyed, which is why government should not double or triple spending.

The true indicator of prosperity is not some GDP figure, but the standard of living of an average Joe. Gas was, at one point this year, 15-20 times more expensive than it was just 40 years ago. Food is outrageously more expensive, as well as mortgages for homes. Our income surely hasn't increased by the same order of magnitude. Do you have any data as pertaining to the standard of living of a working family during the Depression, and whether or not their lives were made easier or harder by Hoover's and FDR's interventionist policies? I suppose without a baseline to compare Hoover/FDR policies to laissez-faire policies, we'll never have empirical data showing how much better the market is than central planners. But one can perform case study after case study, and conclude that this safely enough.

You actually are making an argument liberals make. Liberals argue that what matters is the distribution of income, and how the average person does. Conservatives do not.

As for your comment about food and gas costs, they are actually much lower than they were 20, 40 years ago adjusted for inflation. Staples are far lower as percentage of total spending than they decades ago, though they did rise over the past few years.

If there was a figure that measured the amount of capital goods produced by the private economy, even those bought and used by the government, then I'd be all in favor of using this data. This, GDP does not do. And if there was a way of measuring the opportunity costs missed by funding a large dam here, or a war there, then empiricism would be highly useful. However, because no data figures exists on missed opportunity costs, why should anyone discount the fact that the opportunity cost exists, however indefinable it may be? In all cases, the private market makes better use with the same amount of money than the government, so those opportunity costs add up to being much more than the government can ever hope to create.

Econometrics are used to test empirical hypotheses. You can isolate variables and test them to determine what causes what.

There is simply no evidence that the market performs everything better all of the time. In fact, government does some things better, as I mentioned above. Markets create the most wealth for the most people most of the time. They do not create all the wealth for all the people all of the time.