The Depression of 1920

[Kevin_Kennedy]

[youtube]czcUmnsprQI[/youtube]

This video is a bit lengthy at nearly 50 minutes long, but it's an extremely good speech from Prof. Thomas E. Woods. He goes into detail about Warren Harding, the depression of 1920, stimulus packages, and the Austrian theory of the business cycle.

 

[Agnapostate]

As put by no less an authority than Paul Cwik in Austrian Business Cycle Theory: A Corporate Finance Point of View, published in the Quarterly Journal of Austrian Economics:

The Austrian business cycle theory (ABCT) has been criticized for not being a true theory of the business cycle. The main emphasis of the ABCT has been on the theory of the upper-turning point—the artificial expansion of credit, the manipulation of interest rates, the malinvestments committed by entrepreneurs and then the credit crunch and/or real resource crunch.

I'll concede that the Austrian school has not been entirely apathetic to remedying this. But their alleged "business cycle" theory remains woefully incoherent compared to anything more substantive from a school of thought that's not quite as anti-empiricist.

 

[Paulie]

As put by no less an authority than Paul Cwik in Austrian Business Cycle Theory: A Corporate Finance Point of View, published in the Quarterly Journal of Austrian Economics:

The Austrian business cycle theory (ABCT) has been criticized for not being a true theory of the business cycle. The main emphasis of the ABCT has been on the theory of the upper-turning point—the artificial expansion of credit, the manipulation of interest rates, the malinvestments committed by entrepreneurs and then the credit crunch and/or real resource crunch.

I'll concede that the Austrian school has not been entirely apathetic to remedying this. But their alleged "business cycle" theory remains woefully incoherent compared to anything more substantive from a school of thought that's not quite as anti-empiricist.

And what school of thought, pray tell, would you consider to be more "coherent"?

 

[mash107]

As put by no less an authority than Paul Cwik in Austrian Business Cycle Theory: A Corporate Finance Point of View, published in the Quarterly Journal of Austrian Economics:

The Austrian business cycle theory (ABCT) has been criticized for not being a true theory of the business cycle. The main emphasis of the ABCT has been on the theory of the upper-turning point—the artificial expansion of credit, the manipulation of interest rates, the malinvestments committed by entrepreneurs and then the credit crunch and/or real resource crunch.

I'll concede that the Austrian school has not been entirely apathetic to remedying this. But their alleged "business cycle" theory remains woefully incoherent compared to anything more substantive from a school of thought that's not quite as anti-empiricist.

And what school of thought, pray tell, would you consider to be more "coherent"?

The school that says, "if you spend too much money now, you won't have to buck down and save," of course!

If only we didn't have to deal with a pesky thing called reality.

Great speech though. Thomas Woods is my hero.

 

[Agnapostate]

And what school of thought, pray tell, would you consider to be more "coherent"?

The Chicago school, perhaps. And considering the Austrians' attempts to misappropriate a Coasian analysis of the firm and transaction cost theory, they evidently agree.

 

[Iriemon]

[youtube]czcUmnsprQI[/youtube]

This video is a bit lengthy at nearly 50 minutes long, but it's an extremely good speech from Prof. Thomas E. Woods. He goes into detail about Warren Harding, the depression of 1920, stimulus packages, and the Austrian theory of the business cycle.

Can you summarize the points argued? I'm not going to watch a 50 minute video.

 

[Truthmatters]

I can summarize it without even watching it.

The Free market is god and this all happened because they didnt allow corporations to do whatever they wanted without laws, rules or taxes.

 

[PoliticalChic]

I can summarize it without even watching it.

The Free market is god and this all happened because they didnt allow corporations to do whatever they wanted without laws, rules or taxes.

No doubt not-watching, and corollaries such as not-reading and not-listening are prime strategies that you employ as you embark on your journey through life, but you might want to consider this:
The 1920-1921 Crash, due to the monetary flood of WWI, was handled by the best presidential recession-fighter in our history: Warren G. Harding.

"One of Harding's campaign slogans was "less government in business," and it served him well. Harding embraced the advice of Treasury Secretary Andrew Mellon and called for tax cuts in his first message to Congress on April 12, 1921. The highest taxes, on corporate revenues and "excess" profits, were to be cut. Personal income taxes were to be left as is, with a top rate of 8 percent of incomes above $4,000. Harding recognized the crucial importance of encouraging the investment that is essential for growth and jobs, something that FDR never did."
N-Philes :: Forums - View Single Post - The not-so-great depression of 1920-21

 

[Iriemon]

I can summarize it without even watching it.

The Free market is god and this all happened because they didnt allow corporations to do whatever they wanted without laws, rules or taxes.

No doubt not-watching, and corollaries such as not-reading and not-listening are prime strategies that you employ as you embark on your journey through life, but you might want to consider this:
The 1920-1921 Crash, due to the monetary flood of WWI, was handled by the best presidential recession-fighter in our history: Warren G. Harding.

"One of Harding's campaign slogans was "less government in business," and it served him well. Harding embraced the advice of Treasury Secretary Andrew Mellon and called for tax cuts in his first message to Congress on April 12, 1921. The highest taxes, on corporate revenues and "excess" profits, were to be cut. Personal income taxes were to be left as is, with a top rate of 8 percent of incomes above $4,000. Harding recognized the crucial importance of encouraging the investment that is essential for growth and jobs, something that FDR never did."
N-Philes :: Forums - View Single Post - The not-so-great depression of 1920-21

You are correct that Harding was part of a tax cutting effort, and that low taxes were in place up till higher taxes were passed by a cash starved Congress in 1932.

However, with Harding's record as president during the free fall in the Great Depression(despite having low taxes), I'd personally have a hard time saying Harding was "the best presidential recession-fighter in our history" without gagging.

Year - GDP Actual - % chng
1930 91.2 -12.0%
1931 76.5 -16.1%
1932 58.7 -23.3%

Year - GDP real 2000$ - % chng
1930 790.7 -8.6%
1931 739.9 -6.4%
1932 643.7 -13.0%

 

[Truthmatters]

Which is why I didnt bother to watch 50 minutes of some biased source saying all the clap trap I have heard so many times before.

 

[PoliticalChic]

I can summarize it without even watching it.

The Free market is god and this all happened because they didnt allow corporations to do whatever they wanted without laws, rules or taxes.

No doubt not-watching, and corollaries such as not-reading and not-listening are prime strategies that you employ as you embark on your journey through life, but you might want to consider this:
The 1920-1921 Crash, due to the monetary flood of WWI, was handled by the best presidential recession-fighter in our history: Warren G. Harding.

"One of Harding's campaign slogans was "less government in business," and it served him well. Harding embraced the advice of Treasury Secretary Andrew Mellon and called for tax cuts in his first message to Congress on April 12, 1921. The highest taxes, on corporate revenues and "excess" profits, were to be cut. Personal income taxes were to be left as is, with a top rate of 8 percent of incomes above $4,000. Harding recognized the crucial importance of encouraging the investment that is essential for growth and jobs, something that FDR never did."
N-Philes :: Forums - View Single Post - The not-so-great depression of 1920-21

You are correct that Harding was part of a tax cutting effort, and that low taxes were in place up till higher taxes were passed by a cash starved Congress in 1932.

However, with Harding's record as president during the free fall in the Great Depression(despite having low taxes), I'd personally have a hard time saying Harding was "the best presidential recession-fighter in our history" without gagging.

Year - GDP Actual - % chng
1930 91.2 -12.0%
1931 76.5 -16.1%
1932 58.7 -23.3%

Year - GDP real 2000$ - % chng
1930 790.7 -8.6%
1931 739.9 -6.4%
1932 643.7 -13.0%

Time to spring for a new Almanac, friend.

Harding wasn't President during the Great Depression.

 

[Iriemon]

No doubt not-watching, and corollaries such as not-reading and not-listening are prime strategies that you employ as you embark on your journey through life, but you might want to consider this:
The 1920-1921 Crash, due to the monetary flood of WWI, was handled by the best presidential recession-fighter in our history: Warren G. Harding.

"One of Harding's campaign slogans was "less government in business," and it served him well. Harding embraced the advice of Treasury Secretary Andrew Mellon and called for tax cuts in his first message to Congress on April 12, 1921. The highest taxes, on corporate revenues and "excess" profits, were to be cut. Personal income taxes were to be left as is, with a top rate of 8 percent of incomes above $4,000. Harding recognized the crucial importance of encouraging the investment that is essential for growth and jobs, something that FDR never did."
N-Philes :: Forums - View Single Post - The not-so-great depression of 1920-21

You are correct that Harding was part of a tax cutting effort, and that low taxes were in place up till higher taxes were passed by a cash starved Congress in 1932.

However, with Harding's record as president during the free fall in the Great Depression(despite having low taxes), I'd personally have a hard time saying Harding was "the best presidential recession-fighter in our history" without gagging.

Year - GDP Actual - % chng
1930 91.2 -12.0%
1931 76.5 -16.1%
1932 58.7 -23.3%

Year - GDP real 2000$ - % chng
1930 790.7 -8.6%
1931 739.9 -6.4%
1932 643.7 -13.0%

Time to spring for a new Almanac, friend.

Harding wasn't President during the Great Depression.

LOL - I don't need a new almanac, just a new memory. I was confusing him with Hoover. My error.

 

[PoliticalChic]

No doubt not-watching, and corollaries such as not-reading and not-listening are prime strategies that you employ as you embark on your journey through life, but you might want to consider this:
The 1920-1921 Crash, due to the monetary flood of WWI, was handled by the best presidential recession-fighter in our history: Warren G. Harding.

"One of Harding's campaign slogans was "less government in business," and it served him well. Harding embraced the advice of Treasury Secretary Andrew Mellon and called for tax cuts in his first message to Congress on April 12, 1921. The highest taxes, on corporate revenues and "excess" profits, were to be cut. Personal income taxes were to be left as is, with a top rate of 8 percent of incomes above $4,000. Harding recognized the crucial importance of encouraging the investment that is essential for growth and jobs, something that FDR never did."
N-Philes :: Forums - View Single Post - The not-so-great depression of 1920-21

You are correct that Harding was part of a tax cutting effort, and that low taxes were in place up till higher taxes were passed by a cash starved Congress in 1932.

However, with Harding's record as president during the free fall in the Great Depression(despite having low taxes), I'd personally have a hard time saying Harding was "the best presidential recession-fighter in our history" without gagging.

Year - GDP Actual - % chng
1930 91.2 -12.0%
1931 76.5 -16.1%
1932 58.7 -23.3%

Year - GDP real 2000$ - % chng
1930 790.7 -8.6%
1931 739.9 -6.4%
1932 643.7 -13.0%

Time to spring for a new Almanac, friend.

Harding wasn't President during the Great Depression.

Hey, Iriemon, I couldn't resist, since you used that "Harding was "the best presidential recession-fighter in our history" without gagging" line.

I have to be honest and state that I knew you were thinking of Hoover.

Interesting how TM signed on immediately to your Hoover/Harding inversion. She really doesn't read.

 

[Paulie]

You are correct that Harding was part of a tax cutting effort, and that low taxes were in place up till higher taxes were passed by a cash starved Congress in 1932.

However, with Harding's record as president during the free fall in the Great Depression(despite having low taxes), I'd personally have a hard time saying Harding was "the best presidential recession-fighter in our history" without gagging.

Year - GDP Actual - % chng
1930 91.2 -12.0%
1931 76.5 -16.1%
1932 58.7 -23.3%

Year - GDP real 2000$ - % chng
1930 790.7 -8.6%
1931 739.9 -6.4%
1932 643.7 -13.0%

Time to spring for a new Almanac, friend.

Harding wasn't President during the Great Depression.

Hey, Iriemon, I couldn't resist, since you used that "Harding was "the best presidential recession-fighter in our history" without gagging" line.

I have to be honest and state that I knew you where thinking of Hoover.

Interesting how TM signed on immediately to your Hoover/Harding inversion. She really doesn't read.

That's certainly not the first time TM's ridden someone's coattails erroneously. It's tough to follow the convo with a bong shoved halfway down your throat.

 

[mash107]

I can summarize it without even watching it.

The Free market is god and this all happened because they didnt allow corporations to do whatever they wanted without laws, rules or taxes.

I love how you make an "informed" decision about something without studying it. I'm sure that's how the administration you helped elect works, given the fascist steps they've taken.

But yeah, the video did support and praise the free market. Since the free market is the only system where the poor aren't pillaged for the benefit of the well-connected, Thomas did say that letting companies fail, instead of bailing them out, is a recipe for a quick recovery, as evidenced by how quickly the Depression in 1920 ended, and how poorly the Japanese recovered in that same time period with their interventions. In fact, GDP figures fell in 1920 more steeply than they did in 1929, and if Harding was an interventionist like Hoover, we'd be talking about the 1921 Depression too.

The speech focused on fiscal and monetary policy that were able to help the economy recover quickly. Tax cuts, coupled with enormous spending cuts, were the key enablers in the recovery. The Federal Reserve did not intervene, as it had no authority to do so until 1922 (with open market operations), and the economy was all recovered by then.

 

[Truthmatters]

Harding set the stage for the excesses of the 1920s which helped cause the GD.

He had the same type of buddy buddy cabinet that Bush had and they too were corrupt as hell.

 

[PoliticalChic]

Harding set the stage for the excesses of the 1920s which helped cause the GD.

He had the same type of buddy buddy cabinet that Bush had and they too were corrupt as hell.

Thanks for giving an example of the difference between conclusions and contusions.

 

[Truthmatters]

a1.png (image)

Lets all remember what Hardings great limited government experiment gave us.

 

[Iriemon]

Harding set the stage for the excesses of the 1920s which helped cause the GD.

He had the same type of buddy buddy cabinet that Bush had and they too were corrupt as hell.

Thanks for giving an example of the difference between conclusions and contusions.

There is a point here I've kind of wondered about. Many folks blame the Fed for the 20s stock market speculation, claimin lower interest and making money more available fueled the market rise. Why wouldn't the same argument hold for tax cuts?

Seems to me that is one is going to argue that too much money in the system fueled the market rise, you'd have to acknowledge that low taxes had the same effect.

 

[PoliticalChic]

a1.png (image)

Lets all remember what Hardings great limited government experiment gave us.

See if you can get a friend to read this to you. And explain it.

Then again, I bet the list of your friends looks like the Unabombers' flow chart.


"Harding had a much better understanding of how an economy works than FDR. As historian Robert K. Murray wrote in The Harding Era, the man who would become our 29th president "always decried high taxes, government waste, and excessive governmental interference in the private sector of the economy. In February 1920, shortly after announcing his candidacy, he advocated a cut in government expenditures and stated that government ought to 'strike the shackles from industry. . . . We need vastly more freedom than we do regulation.' "
With Harding's tax and spending cuts and relatively non-interventionist economic policy, GNP rebounded to $74.1 billion in 1922. The number of unemployed fell to 2.8 million— a reported 6.7 percent of the labor force— in 1922. So, just a year and a half after Harding became president, the Roaring Twenties were underway. The unemployment rate continued to decline, reaching an extraordinary low of 1.8 percent in 1926. Since then, the unemployment rate has been lower only once in wartime (1944), and never in peacetime.

"The Roaring Twenties were a time of unprecedented prosperity. GNP expanded year after year without inflation. Productivity improved, and real wages increased. The stock market tripled. There was a dramatic expansion of the middle class."

Harding NOT Roosevelt