The Imaginary Greatness of FDR

[Oddball]

Oh, lookylooky....7426k got banned over at Hannihell.

I thought I recognized that foul Keynesian stench from somewhere.

"8537" really ain't that creative a handle change, dude.

 

[CrusaderFrank]

Let me guess how this thread has gone since I don't have time nor inclination to read it.

I bet CF is claiming that FDR didn't do a thing to make the depression better. I'm sure a few backslappers have come along to assure us he made it worse. And I'm guessing they've supported this supposition with a piece of research from two UCLA economists and perhaps a report by the Mackinac Institute.

And maybe, if anyone actually knows what they are talking about, they pointed out that 3000 banks failed in the year before FDR's first piece of New Deal legislation, while 7 failed in the year that followed. This brought broad-based stability to the financial markets and made people comfortable using the financial system again, leading to an increase in investment from near zero where it stood when he took office.

The economy, which had declined for almost 4 straight years and lost 40% of its value, began growing almost immediately and the recession ended. The growth for the next four years was a record for a four year peacetime period thanks to stability, a return of investment, positive gains in virtually every sector of the economy and a plan to increase employment via public works that helped to increase the velocity of money. This was as close as one could come to Keynesian stimulus before Keynesian stimulus had been codified. It was the result of a plan to avoid the liquidity trap and the associated paradox of thrift. It involved deficit spending by the government to increase investment spending.

In about 1939-40, the government did the exact same thing on a much larger scale and the economy grew even more rapidly. It's unfortunate that they waited so long.

In response to a poll naming FDR as the Greatest US President Evah! CF is asking when did FDR Imaginary Economic Greatness Kick in, can you point to the year, the time, the event?

If you're claiming it's 1933, then why does it take 6 more years to show any sign of progress? If you're claiming 1939-40 (something else really big happened toward the end of 39, right?) then how is an economy that surpassed the 7 Biblical Lean Years "great"

Harding had a bigger problem and he cut taxes and slashed spending and caused a brief realigning deflation and then an economic boom.

Hoover and FDR were Soviet Style Tax and Spend Central Planners and they fucked it up for a whole decade.

 

[8537]

What would you accept?

For data? Anything you find more important than GDP, Employment and private investment.

For research? Any! There's no Depression-era research I won't enjoy reading.

For a definition of Keynesian Fundamentalist? What you believe to be the underpinnings of "fundamental Keynesianism"

Claiming "people smarter than you and I" have concluded the New Deal extend the Depression is a pretty senseless talking point...and of course you have no idea who these people are (since you haven't mentioned any) and you certainly don't know if they are smarter than me. If you believe they are smarter than you, that's your own thing.

 

[8537]

Stuff it.

There are plenty of scholarly and credible works, from people a lot smarter than you or I, who've concluded that the aw Deal was a total disaster that did far more harm than the good for which it has been given credit.

Funny how Keynesian fundamentalists always have their eyes on externalities, except when it comes to those of their know-it-all Utopian economic intrusions.

I'm just going on what you said bro. You seem to have a lot of shit to say, and are always trying to insult people and be some righteous crusader of conservatism. This time, you did it to yourself. Just let this one go.

I do have a lot to say...No doubt about it.

All I did in the exchange in question was call bullshit on someone who used extremely limited criteria for the reputed "success" of FDR and the Raw Deal, while he simultaneously, and quite superciliously, dismissed sources who produced extremely well sourced and footnoted research.

Maybe you're the one who should let this one go, Skippy.

GDP, employment and investment is "extremely limited criteria"? Bejeebers you must be new. What other measures would you use before GDP, employment and investment, Tom? You keep claiming I'm cherry-picking, but you've yet to propose other data that might be more important.

Hint: No other data is more important.

And if you think the UCLA study is "extremely well sourced" then why don't you explain the premise for the class, and tell us how they arrived at that premise. One more hint: The UCLA study doesn't say what most rabid rightwingers claim it says.

 

[8537]

In response to a poll naming FDR as the Greatest US President Evah! CF is asking when did FDR Imaginary Economic Greatness Kick in, can you point to the year, the time, the event?

1933 with the passage of the first of two major reforms to financial institutions and governance.

If you're claiming it's 1933, then why does it take 6 more years to show any sign of progress?

It didn't. The economy began growing in 1933 and grew - at record pace - for four years. Unemployment fell by about 40%. Private investment returned. Bank panics ended.

Year %GDP Private investment
1930 -8.6% -33.3
1931 -6.5% -37.2
1932 -13.1% -69.8
1933 -1.3% 47.3<--FDR takes office. First Banking act and other early reforms are passed.
1934 10.9% 80.6
1935 8.9% 85.2
1936 13.0% 28.2
1937 5.1% 24.9
1938 -3.4% -33.9
1939 8.1% 28.6
1940 8.8% 39.3

Harding had a bigger problem and he cut taxes and slashed spending and caused a brief realigning deflation and then an economic boom.

Harding inherited a war-time economy that was suffering from a negative supply shock. The economy rebounded when that supply shock was filled with exports.

he then cut taxes and spending....well over a year after the recession had ended.

Perhaps you'd care to explain how cutting taxes in 1923 halted a recession that ended in 1921.

 

[CrusaderFrank]

The Great Depression ended because of the largest government spending project in history: war manufacturing for WWII. Without military Keynesianism, the US would have sunk further.

FDR made things worse with his major economic initiative, "The Economy Act" of 1933, which slashed government spending by 500 million. He should have spent like Reagan from the beginning, but he was convinced that balanced budgets were necessary.

The real legacy of FDR is the creation of the middle class and 40 years of financial stability stemming from his financial regulations. Reagan (and all the presidents after him) destroyed FDR's middle class, and they got rid of crucial financial regualtions. The result is a black hole that will take generations to repair. America is headed for another long gilded age with massive poverty surrounded by pockets of unfathomable wealth.

Concentrated wealth translates into concentrated political power -- this is the real legacy of Reagan.

For those who think the wealth on top will trickle down, don't hold your breath. That wealth would rather go to the Wall Street speculative casino, and to Washington, looking for a corrupt advantage. Little of it will reach the real economy if the Bush years are the model. America got so terribly fooled in 1980.

Well you started off great then ran yourself into the ditch

 

[CrusaderFrank]

In response to a poll naming FDR as the Greatest US President Evah! CF is asking when did FDR Imaginary Economic Greatness Kick in, can you point to the year, the time, the event?

1933 with the passage of the first of two major reforms to financial institutions and governance.

If you're claiming it's 1933, then why does it take 6 more years to show any sign of progress?

It didn't. The economy began growing in 1933 and grew - at record pace - for four years. Unemployment fell by about 40%. Private investment returned. Bank panics ended.

Year %GDP Private investment
1930 -8.6% -33.3
1931 -6.5% -37.2
1932 -13.1% -69.8
1933 -1.3% 47.3<--FDR takes office. First Banking act and other early reforms are passed.
1934 10.9% 80.6
1935 8.9% 85.2
1936 13.0% 28.2
1937 5.1% 24.9
1938 -3.4% -33.9
1939 8.1% 28.6
1940 8.8% 39.3

Harding had a bigger problem and he cut taxes and slashed spending and caused a brief realigning deflation and then an economic boom.

Harding inherited a war-time economy that was suffering from a negative supply shock. The economy rebounded when that supply shock was filled with exports.

he then cut taxes and spending....well over a year after the recession had ended.

Perhaps you'd care to explain how cutting taxes in 1923 halted a recession that ended in 1921.

Cutting spending ended the recession, cutting taxes caused the boom

Between 1920 and 1922 Harding slashed government spending

Yr Per Cap Per Cap - Defense and Interest
1919 1,329.77 477.53
1920 390.98 170.15
1921 338.86 136.16 <-- Harding takes office, cuts spending, tell Hoover to sit in a corner and stfu
1922 232.95 78.62

In 1920 unemployment had spiked from 4% to 12% as GDP collapsed 12%. In response, Commerce Secretary Herbert Hoover proposes an array of Soviet Style Central Planned Government interventions, President Harding tell him to go sit in the corner and read Adam Smith instead of Das Kapital.

Unemployment peaks at nearly 12% then plummets to 6.7 percent in 1922 and was only 2.4 percent by 1923.

And that's with a collapse in the monetary base in 1920-21 on par with 1929-30!

Where Hoover tried to buy off the pain with massive Gubbamint spending and FDR double down on the losing bet, Harding let the chips fall and we were out of the woods in about a year!

Between 1933 and 1939 the portion of GDP attributable to government grew by 50% while unemployment averaged 20%. In contrast, Harding cut spending 50% and unemployment falls from 12% to under 3%

 

[johnrocks]

The Great Depression ended because of the largest government spending project in history: war manufacturing for WWII. Without military Keynesianism, the US would have sunk further.

FDR made things worse with his major economic initiative, "The Economy Act" of 1933, which slashed government spending by 500 million. He should have spent like Reagan from the beginning, but he was convinced that balanced budgets were necessary.

The real legacy of FDR is the creation of the middle class and 40 years of financial stability stemming from his financial regulations. Reagan (and all the presidents after him) destroyed FDR's middle class, and they got rid of crucial financial regualtions. The result is a black hole that will take generations to repair. America is headed for another long gilded age with massive poverty surrounded by pockets of unfathomable wealth.

Concentrated wealth translates into concentrated political power -- this is the real legacy of Reagan.

For those who think the wealth on top will trickle down, don't hold your breath. That wealth would rather go to the Wall Street speculative casino, and to Washington, looking for a corrupt advantage. Little of it will reach the real economy if the Bush years are the model. America got so terribly fooled in 1980.

Well you started off great then ran yourself into the ditch

How can you credit the war for getting us out of the GD and not domestic spending when BOTH are government spending dollars that they created out of thin air on public works?

Seems to me like either both need to be credited, both need to be blamed or both need to be dismissed.

 

[CrusaderFrank]

The Great Depression ended because of the largest government spending project in history: war manufacturing for WWII. Without military Keynesianism, the US would have sunk further.

FDR made things worse with his major economic initiative, "The Economy Act" of 1933, which slashed government spending by 500 million. He should have spent like Reagan from the beginning, but he was convinced that balanced budgets were necessary.

The real legacy of FDR is the creation of the middle class and 40 years of financial stability stemming from his financial regulations. Reagan (and all the presidents after him) destroyed FDR's middle class, and they got rid of crucial financial regualtions. The result is a black hole that will take generations to repair. America is headed for another long gilded age with massive poverty surrounded by pockets of unfathomable wealth.

Concentrated wealth translates into concentrated political power -- this is the real legacy of Reagan.

For those who think the wealth on top will trickle down, don't hold your breath. That wealth would rather go to the Wall Street speculative casino, and to Washington, looking for a corrupt advantage. Little of it will reach the real economy if the Bush years are the model. America got so terribly fooled in 1980.

Well you started off great then ran yourself into the ditch

How can you credit the war for getting us out of the GD and not domestic spending when BOTH are government spending dollars that they created out of thin air on public works?

Seems to me like either both need to be credited, both need to be blamed or both need to be dismissed.

The wartime economy actually put people back to work or in the Army, the FDR New Deal did nothing of the sort.

 

[johnrocks]

Well you started off great then ran yourself into the ditch

How can you credit the war for getting us out of the GD and not domestic spending when BOTH are government spending dollars that they created out of thin air on public works?

Seems to me like either both need to be credited, both need to be blamed or both need to be dismissed.

The wartime economy actually put people back to work or in the Army, the FDR New Deal did nothing of the sort.

My Mother worked in the Rations Board, the economy here didn't recover until AFTER the men came home Frank, using the war is playing into the liberals playbook, it's still government created projects and besides, do we really want to have to kill millions to stimulate an economy?

 

[Liability]

Well you started off great then ran yourself into the ditch

How can you credit the war for getting us out of the GD and not domestic spending when BOTH are government spending dollars that they created out of thin air on public works?

Seems to me like either both need to be credited, both need to be blamed or both need to be dismissed.

The wartime economy actually put people back to work or in the Army, the FDR New Deal did nothing of the sort.

And FDR's Japanese-Internment Camps also provided SHELTER for Japanese-Americans!

That FDR. What a saint!

 

[CrusaderFrank]

How can you credit the war for getting us out of the GD and not domestic spending when BOTH are government spending dollars that they created out of thin air on public works?

Seems to me like either both need to be credited, both need to be blamed or both need to be dismissed.

The wartime economy actually put people back to work or in the Army, the FDR New Deal did nothing of the sort.

My Mother worked in the Rations Board, the economy here didn't recover until AFTER the men came home Frank, using the war is playing into the liberals playbook, it's still government created projects and besides, do we really want to have to kill millions to stimulate an economy?

I agree with you! We don't want a war to paper over Progressives **** ups. As a practical matter, a conventional world war involving millions of people and the entire US economy was overall stimulative. Was it good economy policy? Only to a Progressive.

 

[CrusaderFrank]

And thanks to 8537, we've brought up another great Progressive lie, perhaps one of the greatest on par with FDR's economic "Greatness" that is, that Hoover was a laissez faire Capitalist when he was nothing of the sort.

His very effective Boss, President Harding was a laissez faire Capitalist, Hoover was a Soviet Style Central Planning Disaster and FDR was the economic bastard spawn of Hoover and Marx.

Harding = laissez faire turned a horrible economy around in a year

Hoover/FDR = Soviet Style Central Planning Decade Long Disaster, Worst Economy in human history eclipsing the 7 Biblical Lean Years

 

[johnrocks]

And thanks to 8537, we've brought up another great Progressive lie, perhaps one of the greatest on par with FDR's economic "Greatness" that is, that Hoover was a laissez faire Capitalist when he was nothing of the sort.

His very effective Boss, President Harding was a laissez faire Capitalist, Hoover was a Soviet Style Central Planning Disaster and FDR was the economic bastard spawn of Hoover and Marx.

Harding = laissez faire turned a horrible economy around in a year

Hoover/FDR = Soviet Style Central Planning Decade Long Disaster, Worst Economy in human history eclipsing the 7 Biblical Lean Years

I could give (and did) several federal programs Hoover signed off on including the country's FIRST welfare program.

 

[8537]

Cutting spending ended the recession, cutting taxes caused the boom

Between 1920 and 1922 Harding slashed government spending

Yr Per Cap Per Cap - Defense and Interest
1919 1,329.77 477.53
1920 390.98 170.15
1921 338.86 136.16 <-- Harding takes office, cuts spending, tell Hoover to sit in a corner and stfu
1922 232.95 78.62

He cut spending because the war ended, Frank. Truman did the same thing. That's a negative supply shock. We then boomed by adding manufacturing to resupply and rebuild Europe. That's a positive supply shock.

We cut taxes years later.

In 1920 unemployment had spiked from 4% to 12% as GDP collapsed 12%.

That's what happens when wars end. Sounds very 1946ish, Frank.

And that's with a collapse in the monetary base in 1920-21 on par with 1929-30!

Perhaps you can explain why you think the MB collapsed in 1920, Frank.

Between 1933 and 1939 the portion of GDP attributable to government grew by 50% while unemployment averaged 20%. In contrast, Harding cut spending 50% and unemployment falls from 12% to under 3%

It's funny how you continue to skip over THIS:

Year %GDP Private investment
1930 -8.6% -33.3
1931 -6.5% -37.2
1932 -13.1% -69.8
1933 -1.3% 47.3<--FDR takes office. First Banking act and other early reforms are passed.
1934 10.9% 80.6
1935 8.9% 85.2
1936 13.0% 28.2
1937 5.1% 24.9
1938 -3.4% -33.9
1939 8.1% 28.6
1940 8.8% 39.3

But I don't blame you. I'd run from those facts too if I were you.

 

[8537]

Well you started off great then ran yourself into the ditch

How can you credit the war for getting us out of the GD and not domestic spending when BOTH are government spending dollars that they created out of thin air on public works?

Seems to me like either both need to be credited, both need to be blamed or both need to be dismissed.

The wartime economy actually put people back to work or in the Army, the FDR New Deal did nothing of the sort.

What would you make of an effort to end a recession that involved running up massive deficits and hiring people to dig deep holes (either here or abroad), only to fill in those holes again years later? An effort that involved putting a million or more people into nonmarket jobs?

 

[Micky G. Jagger]

And thanks to 8537, we've brought up another great Progressive lie, perhaps one of the greatest on par with FDR's economic "Greatness" that is, that Hoover was a laissez faire Capitalist when he was nothing of the sort.

It is well established that Herbert Hoover, as Secretary of Commerce under both Harding and Coolidge, was known for his laissez-faire polices that characterized the twenties.

 

[8537]

And thanks to 8537, we've brought up another great Progressive lie, perhaps one of the greatest on par with FDR's economic "Greatness" that is, that Hoover was a laissez faire Capitalist when he was nothing of the sort.

It is well established that Herbert Hoover, as Secretary of Commerce under both Harding and Coolidge, was known for his laissez-faire polices that characterized the twenties.

Frank also can't be bothered to understand that the 1920/1 recession was created from a collapse in effective demand when the war ended (just like 1946) while the 1929 collapse was a contagious financial crisis that spread throughout the entire economy.

it's just easier to use the standard rightwing hobnob:

Austrian = 1921 = GOOD!
Keynesian = 1929 = BAD!

<nevermind that Keynes was still a near-perfect classical economist in 1929>

 

[CrusaderFrank]

How can you credit the war for getting us out of the GD and not domestic spending when BOTH are government spending dollars that they created out of thin air on public works?

Seems to me like either both need to be credited, both need to be blamed or both need to be dismissed.

The wartime economy actually put people back to work or in the Army, the FDR New Deal did nothing of the sort.

What would you make of an effort to end a recession that involved running up massive deficits and hiring people to dig deep holes (either here or abroad), only to fill in those holes again years later? An effort that involved putting a million or more people into nonmarket jobs?

A waste of time, effort and money guaranteed to keep unemployment around 20% for a decade.

 

[CrusaderFrank]

Cutting spending ended the recession, cutting taxes caused the boom

Between 1920 and 1922 Harding slashed government spending

Yr Per Cap Per Cap - Defense and Interest
1919 1,329.77 477.53
1920 390.98 170.15
1921 338.86 136.16 <-- Harding takes office, cuts spending, tell Hoover to sit in a corner and stfu
1922 232.95 78.62

He cut spending because the war ended, Frank. Truman did the same thing. That's a negative supply shock. We then boomed by adding manufacturing to resupply and rebuild Europe. That's a positive supply shock.

We cut taxes years later.

In 1920 unemployment had spiked from 4% to 12% as GDP collapsed 12%.

That's what happens when wars end. Sounds very 1946ish, Frank.

And that's with a collapse in the monetary base in 1920-21 on par with 1929-30!

Perhaps you can explain why you think the MB collapsed in 1920, Frank.

Between 1933 and 1939 the portion of GDP attributable to government grew by 50% while unemployment averaged 20%. In contrast, Harding cut spending 50% and unemployment falls from 12% to under 3%

It's funny how you continue to skip over THIS:

Year %GDP Private investment
1930 -8.6% -33.3
1931 -6.5% -37.2
1932 -13.1% -69.8
1933 -1.3% 47.3<--FDR takes office. First Banking act and other early reforms are passed.
1934 10.9% 80.6
1935 8.9% 85.2
1936 13.0% 28.2
1937 5.1% 24.9
1938 -3.4% -33.9
1939 8.1% 28.6
1940 8.8% 39.3

But I don't blame you. I'd run from those facts too if I were you.

I didn't ignore it.

I said FDR increased the government portion of GDP by 50% over the years you claim as great and yet somehow unemployment still averages 20% over the same time period.