Top 3 Myths About the Great Depression and the New Deal

[Bfgrn]

Economic Policy Under Hoover

Throughout this decline—which carried real GNP per worker down to a level 40 percent below that which it had attained in 1929, and which saw the unemployment rise to take in more than a quarter of the labor force—the government did not try to prop up aggregate demand. The only expansionary fiscal policy action undertaken was the Veterans’ Bonus, passed over President Hoover’s veto. That aside, the full employment budget surplus did not fall over 1929–33.

The Federal Reserve did not use open market operations to keep the nominal money supply from falling. Instead, its only significant systematic use of open market operations was in the other direction: to raise interest rates and discourage gold outflows after the United Kingdom abandoned the gold standard in the fall of 1931.

This inaction did not come about because they did not understand the tools of monetary policy. This inaction did not come about because the Federal Reserve was constrained by the necessity of defending the gold standard. The Federal Reserve knew what it was doing: it was letting the private sector handle the Depression in its own fashion. It saw the private sector’s task as the “liquidation” of the American economy. It feared that expansionary monetary policy would impede the necessary private-sector process of readjustment.

Contemplating in retrospect the wreck of his country’s economy and his own presidency, Herbert Hoover wrote bitterly in his memoirs about those who had advised inaction during the downslide:

The ‘leave-it-alone liquidationists’ headed by Secretary of the
Treasury Mellon…felt that government must keep its hands off and
let the slump liquidate itself. Mr. Mellon had only one formula:
‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate
real estate’.…He held that even panic was not altogether a bad
thing. He said: ‘It will purge the rottenness out of the system. High
costs of living and high living will come down. People will work
harder, live a more moral life. Values will be adjusted, and
enterprising people will pick up the wrecks from less competent
people’.

It's important to note that Milton Friedman concluded that it was the policies of the Fed and their pro-cyclical and contractionary policies which caused a nasty recession to turn into the Depression.

Its MORE important to note what Herbert Hoover said above. He had the opportunity to stimulate the economy...HE DIDN'T. Hoover laments listening to the ‘leave-it-alone liquidationists’. TOO LATE!

One of many Hoovervilles

During the Great Depression conservatives raised objections to F.D.R.’s programs. They said the economy must be left alone and it would correct itself in the long run. Commerce Secretary Harry Hopkins shot back: “People don’t eat in the long run. They eat every day.”

 

[Bfgrn]

WOW so America stayed in a depression longer than any other country and war doesn't create real wealth?

The USA stayed in depression later than the other countries, which began rearming much earlier than the USA, which jump started their economies. The strength of the US economically in 1945 with full employment and a planned, well-executed transfer into a civilian economy mitigated the normal dislocations of integrating a demob worker force.

You and Frank are fun for the adults to watch as you play in the sand box.

The experts disagree with you,

FALSE

According to Federal Reserve Chairman Ben Bernanke, "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression." In fact, even famed conservative economist Milton Friedman admitted that the New Deal's Federal Deposit Insurance Corporation was "the structural change most conducive to monetary stability since ... the Civil War."

OK — if the verifiable evidence proves the New Deal did not prolong the Depression, what about historians — do they "pretty much agree" on the opposite?

Again, no.

As Newsweek's Daniel Gross reports, "One would be very hard-pressed to find a serious professional historian who believes that the New Deal prolonged the Depression."

 

[bigrebnc1775]

Economic Policy Under Hoover

Throughout this decline—which carried real GNP per worker down to a level 40 percent below that which it had attained in 1929, and which saw the unemployment rise to take in more than a quarter of the labor force—the government did not try to prop up aggregate demand. The only expansionary fiscal policy action undertaken was the Veterans’ Bonus, passed over President Hoover’s veto. That aside, the full employment budget surplus did not fall over 1929–33.

The Federal Reserve did not use open market operations to keep the nominal money supply from falling. Instead, its only significant systematic use of open market operations was in the other direction: to raise interest rates and discourage gold outflows after the United Kingdom abandoned the gold standard in the fall of 1931.

This inaction did not come about because they did not understand the tools of monetary policy. This inaction did not come about because the Federal Reserve was constrained by the necessity of defending the gold standard. The Federal Reserve knew what it was doing: it was letting the private sector handle the Depression in its own fashion. It saw the private sector’s task as the “liquidation” of the American economy. It feared that expansionary monetary policy would impede the necessary private-sector process of readjustment.

Contemplating in retrospect the wreck of his country’s economy and his own presidency, Herbert Hoover wrote bitterly in his memoirs about those who had advised inaction during the downslide:

The ‘leave-it-alone liquidationists’ headed by Secretary of the
Treasury Mellon…felt that government must keep its hands off and
let the slump liquidate itself. Mr. Mellon had only one formula:
‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate
real estate’.…He held that even panic was not altogether a bad
thing. He said: ‘It will purge the rottenness out of the system. High
costs of living and high living will come down. People will work
harder, live a more moral life. Values will be adjusted, and
enterprising people will pick up the wrecks from less competent
people’.

It's important to note that Milton Friedman concluded that it was the policies of the Fed and their pro-cyclical and contractionary policies which caused a nasty recession to turn into the Depression.

Its MORE important to note what Herbert Hoover said above. He had the opportunity to stimulate the economy...HE DIDN'T. Hoover laments listening to the ‘leave-it-alone liquidationists’. TOO LATE!

One of many Hoovervilles

During the Great Depression conservatives raised objections to F.D.R.’s programs. They said the economy must be left alone and it would correct itself in the long run. Commerce Secretary Harry Hopkins shot back: “People don’t eat in the long run. They eat every day.”

FDR's regulations and oversight kept us in the depression longer than any other country.

 

[bigrebnc1775]

The USA stayed in depression later than the other countries, which began rearming much earlier than the USA, which jump started their economies. The strength of the US economically in 1945 with full employment and a planned, well-executed transfer into a civilian economy mitigated the normal dislocations of integrating a demob worker force.

You and Frank are fun for the adults to watch as you play in the sand box.

The experts disagree with you,

FALSE

According to Federal Reserve Chairman Ben Bernanke, "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression." In fact, even famed conservative economist Milton Friedman admitted that the New Deal's Federal Deposit Insurance Corporation was "the structural change most conducive to monetary stability since ... the Civil War."

OK — if the verifiable evidence proves the New Deal did not prolong the Depression, what about historians — do they "pretty much agree" on the opposite?

Again, no.

As Newsweek's Daniel Gross reports, "One would be very hard-pressed to find a serious professional historian who believes that the New Deal prolonged the Depression."

OK use Bernanke didn't the economy fall on his watch also? Some expert you used.

Writing at The Beacon Jonathan Bean nicely reminds us of Robert Whaples survey of economists and historians on questions in economic history. Among the questions that Whaples asked members of the Economic History Association to express agreement or disagreement on was the following:


Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression.

About half of the economists agreed (or agreed with some provisos) that the New Deal lengthened and deepened the Great Depression. Thus this point of view among economic historians is basically mainstream. Among historians there was much less agreement with the statement, although a significant minority, 27%, agreed, mostly with some provisos.

 

[Bfgrn]

It's important to note that Milton Friedman concluded that it was the policies of the Fed and their pro-cyclical and contractionary policies which caused a nasty recession to turn into the Depression.

Its MORE important to note what Herbert Hoover said above. He had the opportunity to stimulate the economy...HE DIDN'T. Hoover laments listening to the ‘leave-it-alone liquidationists’. TOO LATE!

One of many Hoovervilles

During the Great Depression conservatives raised objections to F.D.R.’s programs. They said the economy must be left alone and it would correct itself in the long run. Commerce Secretary Harry Hopkins shot back: “People don’t eat in the long run. They eat every day.”

FDR's regulations and oversight kept us in the depression longer than any other country.

BULLSHIT! Other countries counted prisoners as 'employed'. Right wing revisionists here don't count three-and-a-half million Americans who were part of the New Deal work programs as employed!!!

As Amity Shlaes, currently the premier anti-New Deal historical revisionist writing for a popular audience, explained proudly in her own Wall Street Journal opinion piece in November, "The Krugman Recipe for Depression," a necessary step is to not count as employed those people in "temporary jobs in emergency programs."

That means, everyone who got a job during the Great Depression via the Works Progress Administration (WPA) or Civilian Conservation Corps (CCC), or any other of Roosevelt's popular New Deal workfare programs, doesn't get counted as employed in the statistics used by Cole, Ohanian and Shlaes.

Let us reflect, for a moment, on what the men and women employed by those programs achieved (aside from earning cash to buy food and pay for shelter, of course). In his paper, "Time for a New, New Deal," Marshall Auerback (pointed to by economist James Galbraith) summarizes:

The government hired about 60 per cent of the unemployed in public works and conservation projects that planted a billion trees, saved the whooping crane, modernized rural America, and built such diverse projects as the Cathedral of Learning in Pittsburgh, the Montana state capitol, much of the Chicago lakefront, New York's Lincoln Tunnel and Triborough Bridge complex, the Tennessee Valley Authority and the aircraft carriers Enterprise and Yorktown.

It also built or renovated 2,500 hospitals, 45,000 schools, 13,000 parks and playgrounds, 7,800 bridges, 700,000 miles of roads, and a thousand airfields. And it employed 50,000 teachers, rebuilt the country's entire rural school system, and hired 3,000 writers, musicians, sculptors and painters, including Willem de Kooning and Jackson Pollock.

In other words, millions of men and women earned a living wage and self-respect and contributed mightily to the national infrastructure. But, according to the statistics as interpreted on the Wall Street Journal editorial page, they were unemployed.



FDR and the New Deal created the LARGEST increase in GDP in American history.

Gross Domestic Product (GDP)

Percent change from preceding period

GDP percent change based on current dollars


1930 -12.0
1931 -16.1
1932 -23.2
1933 -3.9
1934 17.0 <-----FDR's FIRST budget year.
1935 11.1
1936 14.3
1937 9.7
1938 -6.3
1939 7.0
1940 10.0
1941 25.0
1942 27.7
1943 22.7
1944 10.7
1945 1.5 <-----FDR dies.

FDR had his own right wing regressives to contend with, HERE is where that led.

The Recession of 1937&#8211;1938 was a temporary reversal of the pre-war 1933 to 1941 economic recovery from the Great Depression in the United States. Economists disagree about the causes of this downturn, but agree that government austerity reversed the recovery. wiki

------------------------------------------------------------------------------------------------

FDR and the New Deal created the LARGEST increase in GDP in American history.

 

[Toro]

In fairness, however, the economy started to expand before FDR was inaugurated.

And I don't think those are real dollars. I think they are nominal dollars.

 

[bigrebnc1775]

Its MORE important to note what Herbert Hoover said above. He had the opportunity to stimulate the economy...HE DIDN'T. Hoover laments listening to the ‘leave-it-alone liquidationists’. TOO LATE!

One of many Hoovervilles

During the Great Depression conservatives raised objections to F.D.R.’s programs. They said the economy must be left alone and it would correct itself in the long run. Commerce Secretary Harry Hopkins shot back: “People don’t eat in the long run. They eat every day.”

FDR's regulations and oversight kept us in the depression longer than any other country.

BULLSHIT! Other countries counted prisoners as 'employed'. Right wing revisionists here don't count three-and-a-half million Americans who were part of the New Deal work programs as employed!!!

As Amity Shlaes, currently the premier anti-New Deal historical revisionist writing for a popular audience, explained proudly in her own Wall Street Journal opinion piece in November, "The Krugman Recipe for Depression," a necessary step is to not count as employed those people in "temporary jobs in emergency programs."

That means, everyone who got a job during the Great Depression via the Works Progress Administration (WPA) or Civilian Conservation Corps (CCC), or any other of Roosevelt's popular New Deal workfare programs, doesn't get counted as employed in the statistics used by Cole, Ohanian and Shlaes.

Let us reflect, for a moment, on what the men and women employed by those programs achieved (aside from earning cash to buy food and pay for shelter, of course). In his paper, "Time for a New, New Deal," Marshall Auerback (pointed to by economist James Galbraith) summarizes:

The government hired about 60 per cent of the unemployed in public works and conservation projects that planted a billion trees, saved the whooping crane, modernized rural America, and built such diverse projects as the Cathedral of Learning in Pittsburgh, the Montana state capitol, much of the Chicago lakefront, New York's Lincoln Tunnel and Triborough Bridge complex, the Tennessee Valley Authority and the aircraft carriers Enterprise and Yorktown.

It also built or renovated 2,500 hospitals, 45,000 schools, 13,000 parks and playgrounds, 7,800 bridges, 700,000 miles of roads, and a thousand airfields. And it employed 50,000 teachers, rebuilt the country's entire rural school system, and hired 3,000 writers, musicians, sculptors and painters, including Willem de Kooning and Jackson Pollock.

In other words, millions of men and women earned a living wage and self-respect and contributed mightily to the national infrastructure. But, according to the statistics as interpreted on the Wall Street Journal editorial page, they were unemployed.



FDR and the New Deal created the LARGEST increase in GDP in American history.

Gross Domestic Product (GDP)

Percent change from preceding period

GDP percent change based on current dollars


1930 -12.0
1931 -16.1
1932 -23.2
1933 -3.9
1934 17.0 <-----FDR's FIRST budget year.
1935 11.1
1936 14.3
1937 9.7
1938 -6.3
1939 7.0
1940 10.0
1941 25.0
1942 27.7
1943 22.7
1944 10.7
1945 1.5 <-----FDR dies.

FDR had his own right wing regressives to contend with, HERE is where that led.

The Recession of 1937–1938 was a temporary reversal of the pre-war 1933 to 1941 economic recovery from the Great Depression in the United States. Economists disagree about the causes of this downturn, but agree that government austerity reversed the recovery. wiki

------------------------------------------------------------------------------------------------

FDR and the New Deal created the LARGEST increase in GDP in American history.

Economic growth depends on the successful development of new industries to replace declining ones, then the most sensible economic policy for government is to target investment and other policies toward the growth of new economic sectors. Which obama has not done his target has been with public unions

 

[kaz]

It is a RIGHT WING THINK TANK

Odd you never object to left wing think tanks. Apparently your issue isn't that they come from an ideology, only that they don't come from yours...

 

[JakeStarkey]

I don't object to expert opinion that objectively looks at the facts with critical thinking ability. The right wing think tank does not do any of that.

You guys are not entitled to your own facts. You must twist your philosophy to fit the facts, not what you are doing now: trying to twist facts to fit your philosophy.

I am going to send this page over to my friends at the U. They love this type of stuff by wacks, so they can debunk Far Left and Hard Right nutso demagoguery.

 

[Truthmatters]

Right winger keep trying to rewrite history.

hell they are trying to write founders out of the kids history books.

 

[Cecilie1200]

Mackinac Center for Public Policy - Wikipedia, the free encyclopedia



Mackinac Center scholars generally recommend lower state and local taxes, reduced regulatory authority for state agencies, labor law revisions including making Michigan a right-to-work state, school choice via universal tuition tax credits, and enhanced protection of individual property rights. They have been outspoken in their opposition to state higher taxes, economic central planning programs including subsidies, targeted corporate tax breaks,

So we know they have their heads on straight regarding economics, and can be believed.

 

[JakeStarkey]

If CeCelie1200 supports it, discuss but verify. Can't accept her word or analysis.

 

[Cecilie1200]

Everything after breathing is beyond you.

And breathing would be if it wasn't involuntary.

 

[JakeStarkey]

Excellent description of inability by Oddball and Cecelie. It takes everything they have to breathe.

 

[Wry Catcher]

Enjoy I'm sure you can watch a two minute movie

Top 3 Myths About the Great Depression and the New Deal - YouTube

History, A New Revision

Written under a grant from the Heritage Foundation with funding provided by Kochroach, LLC and FreedomWorks, manufacturer of the Tea Party Express.

Call for a free hardcover copy personally signed by Dick Cheney and Jeffrey (S)Killing and don't forget to donate to Plutocracy 'R Us.

 

[bigrebnc1775]

Right winger keep trying to rewrite history.

hell they are trying to write founders out of the kids history books.

This post is a keeper

Right winger keep trying to rewrite history.

hell they are trying to write founders out of the kids history books.

One more lie added to the list of lies of truth does not matter

 

[grunt11b]

Mackinac Center for Public Policy - Wikipedia, the free encyclopedia



Mackinac Center scholars generally recommend lower state and local taxes, reduced regulatory authority for state agencies, labor law revisions including making Michigan a right-to-work state, school choice via universal tuition tax credits, and enhanced protection of individual property rights. They have been outspoken in their opposition to state higher taxes, economic central planning programs including subsidies, targeted corporate tax breaks,

You didn't mispell anything for the first time, did you copy and paste?

 

[grunt11b]

clueless is here.

haha!!!!

 

[grunt11b]

Everything after breathing is beyond you.

 

[The T]

Right winger keep trying to rewrite history.

hell they are trying to write founders out of the kids history books.

This post is a keeper

Right winger keep trying to rewrite history.

hell they are trying to write founders out of the kids history books.

One more lie added to the list of lies of truth does not matter

Good quote. It is the left that rewrites history and teaches it to young skulls full of mush...IF they teach history at all.

TDM exudes in projection very well.