patrick.net

bob2356 says

The US economy deteriorated from 1932 to 1939? How about some actual numbers on that, or is just a trust me thing? Show me the money Jerry McGuire.

The burden is actually on you to prove that the Great Depression hit bottom in 1932, when the stock market hit bottom. 1932 being the economic bottom was your claim, not mine, frankly an untenable claim for anyone with some basic understanding about the stock market and the economy. Did our current economic depression hit bottom in March 2009? Of course not!

The most iconic photo symbolizing the Great Depression, Dorothea Lang's "Migrant Mother" wasn't taken until 1936! Nearly a full term into FDR's presidency.

You said the bottom of the great depression was 1945 not the end. Totally different concepts. You are saying there was no improvement in the standard of living in the US between 1932 and 1945? Again, prove it. All I see is a bunch of anecdotal references.

The overall standards of living certainly was not improving during the war years compared to the pre-war years (yes, even 1932!). No new cars were made for civilian use during the war; gasoline purchase along with numerous other basic necessities were restricted by rationing . . . that's in the US. For much of the rest of the world (especially Europe), it was starvation time. Let's not forget the slavery draft that sent many husbands, fathers, brothers and sons to get killed and maimed in ritualized mutual slaughter.

It's amazing how any rational person can characterize war time life as improvement over the prior peace years. Perhaps for the fat cats with extraordinarily large exposure to stocks then got a chance to war-profiteer during the war, the war years might have been better than 1932. That's what you are essentially looking at when using stock market index and GNP (debt service capacity) as proxy for economic well being. However, for the ordinary folks on Main Street, 1932 was just like our early 2009 stock market bottom; the real hardship came later, as the various governments of the world intervened more and more heavily in the economy, helping their fat cat buddies at the expense of the ordinary people.

So you are saying that whatever you say to be true is true because you feel it to be true.

No. If you can present a logical argument, I'm all ears.

ordinal values? ordinal preferences? WTF happened to mathematical modelling of real life?

Ordinality is math too. Human preference is ordinal. For example, if you prefer your current girlfriend over your previous girlfriend, that doesn't mean assigning a number to your current girlfriend, then another number to your previous girlfriend would have any cardinal or universal meaning.

Oh right, there can't be and actual modelling because each person's subjective opinion of the word "improvement" is different, I forgot. Did rush limbuagh post a bunch of fancy words on his website that you just had to try out?

I have no idea why you even brought up Rush Limbaugh. The last time I listened to him was 20 years ago. Human preference being subjective is a simple reality. Any mathematical model that fails to take that into account would just see its own value as a valid model shattered whenever that boundary condition is encountered.

Reality says

As crony programs became more and more politically untenable, both countries
turned to military production after a few years, as the public had no way of
gauging the real worth of military hardware turned out by the crony capitalists.

Love it. Classic austrianism. 2+2 = 17.

Reality says

That was one of the reasons why even John Maynard Keynes acknowledged in the
preface to the German edition of his "General Theory": that his policy proposals
could be more efficiently implemented in a totalitarian state like Nazi Germany
than in a western democracy.

This is not what he said in the preface. You said this on here over a year ago and it was a misquote then - again I usually remember when, where, and from whom I have read something before. Keynes said "Nevertheless the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of the production and distribution of a given output produced under conditions of free competition and a large measure of laissez-faire."

Keynes says his theory is more easily adapted in a totalitarian state than a theory of laissez-faire. He says nothing of western democracies other than acknowledging that his theories had been controversial there because the theory was a transistion from tradition.

Saying that a theory based upon increasing government expenditures to increase demand is more easily implemented in a totalitarian state than a theory based on free markets is hardly groundbreaking. To people accustomed to central planning, free markets and laissez-faire policies would be unfamiliar. No shit.

david1 says

Reality says

As crony programs became more and more politically untenable, both countries

turned to military production after a few years, as the public had no way of

gauging the real worth of military hardware turned out by the crony capitalists.

Love it. Classic austrianism. 2+2 = 17.

More like 1+1 = 4.5, as in average family formation. The usual assumptions in math regarding unit, uniformity and non-interaction/breeding simply do not apply when it comes to human interactions. The "+" took place largely because of the desire to breed! 1+1=4.5 is the average family formation in reality; 1+1=2 would be the description of a dying society.

Likewise, transactions take place only because two parties disagree on the relative value of the two items being exchanged (but agree on the action of exchanging), so all the "=" signss in Keynesian formulae are highly suspect to begin with.

david1 says

He says nothing of western democracies other than acknowledging that his theories had been controversial there because the theory was a transistion from tradition.

Controversial because his theory is anathema to everything since the idea of individual liberty became widespread in the West since the 18th century.

david1 says

To people accustomed to central planning, free markets and laissez-faire policies would be unfamiliar. No shit.

No shit. Keynesianism is central planning, and road to serfdom.

sbh says

Only in the wake of the 2008 crash, an exogenous event that screwed up the context of the tax and spend model that probably would have obtained otherwise.

WTF? dude we were living in a bubble that popped.

Reality says

anathema

Hardly. Keynesian policies (before, during, and after WW2 specifically) led to the greatest period of economic expansion after the industrial revolution. Keynesian policies like the National Highway System, GI Bill, the Space Race, and the expansion of social security combined with Free Market, pre-OPEC cheap oil led to a positive feedback loop with the rise of consumerism.

The cronies you blame for the nation's economic ills were born of Reaganism; deregulation encouraged concentration of wealth - goverment spending shifted from domestic welfare to war stockpiling.

You cannot ignore the free market, supply-side influence of the past 35 years when talking about where we are. A gold standard would have only exascerbated these problems.

this chart is biased because it is based on assets when it should be based on income. consumerism in the U.S is the strongest in the world so of course we are going to have few assets.

Reality says

The burden is actually on you to prove that the Great Depression hit bottom in 1932, when the stock market hit bottom. 1932 being the economic bottom was your claim, not mine,

Au contraire mon frère. You are claiming that the economic indicators that are are used by the vast majority economists, historians, and the general public are invalid which puts the onus of providing what you consider valid indicators squarely on you. As a renowned scholar (at least in your mind) of mathematics, history, economics and the depression it should be child's play for you to provide a summary of these in a couple paragraphs. Show me the money.

bob2356 says

indigenous says

Fact is the only thing FDR caused was the great depression which was his and the FED's handiwork and only theirs.

I'm still waiting for some type of documentation on this. So let me see if I understand. You are saying that the generally accepted theory that the huge credit bubble of the 1920's was actually the cause of the depression is incorrect. That the stock market crash, the banking crash, the 30%+ unemployment rate, the 40% drop in economic output, the loss of millions of peoples savings from 1929 to 1933 wasn't part of the great depression. The great depression only happened after FDR took office, spent a year getting his policies implemented, and another year for his policies to have an effect. So the great depression actually started in 1935? God did a lot of people get this wrong over the years. It's a good thing we have you to show us the truth.

Reality says

It's amazing how any rational person can characterize war time life as improvement over the prior peace years.

Really? Unemployment dropped from 15% to almost zero, industrial output increased 15% a year, industrial capacity increased by 50% altogether, productivity doubled, consumer spending increased 12% without any cars being sold. There was rationing of some goods, people I've talked to (family who lived through the depression mostly) about the era thought having a job and money even with rationing was better then being unemployed. The public overwhelmingly supported the war effort. Hard to believe in post Vietnam times, but true. Bonus points, the increases in capacity and productivity set the stage for an amazing 25 year economic boom that has never been seen before in history.

Reality says

The most iconic photo symbolizing the Great Depression, Dorothea Lang's "Migrant Mother" wasn't taken until 1936! Nearly a full term into FDR's presidency.

There are Lang photo's of the depression going back to 1929.Your point is what? That the depression was still going on in 1936. Of course it was. You seem to have a real problem with understanding the difference between the concept of bottom and the concept of end. You keep confusing and interchanging them in your comments. Bottom is when things start to improve, end is when they finish improving. It's not hard once you apply yourself. Try to focus.

BTW "Migrant Mother" was taken as a part of a series taken when Lang was employed by the Relief Agency documenting the poverty of workers displaced by the crop and farm failures of the dust bowl. Even if the dust bowl had happened in the roaring 20's these people would have suffered severe poverty. Over 2.5 million people lost everything and had to migrate. I suppose next you will claim FDR caused the drought that created the dust bowl.

bob2356 says

I'm still waiting for some type of documentation on this. So let me see if I understand. You are saying that the generally accepted theory that the huge credit bubble of the 1920's was actually the cause of the depression is incorrect. That the stock market crash, the banking crash, the 30%+ unemployment rate, the 40% drop in economic output, the loss of millions of peoples savings from 1929 to 1933 wasn't part of the great depression. The great depression only happened after FDR took office, spent a year getting his policies implemented, and another year for his policies to have an effect. So the great depression actually started in 1935? God did a lot of people get this wrong over the years. It's a good thing we have you to show us the truth

The bubble was from over investment and caused the initial recession. But what turned it from a recession into a depression was tightening the money supply by the FED and then incessant meddling/badgering of the economy by FDR.

Oh and yes you are fortunate to have my take on this, not that you will listen. And yes most people do not understand why there was a depression.

BTW no comment about the IPOs?, it is related to this.

indigenous says

Oh and yes you are fortunate to have my take on this, not that you will listen. And yes most people do not understand why there was a depression.

Well I'm certainly glad it's true because you say it's true. I'd hate to have to look through a bunch of pesky numbers and facts (not that you could provide any). You're a legend in your own mind.

bob2356 says

indigenous says

Oh and yes you are fortunate to have my take on this, not that you will listen. And yes most people do not understand why there was a depression.

Well I'm certainly glad it's true because you say it's true. I'd hate to have to look through a bunch of pesky numbers and facts (not that you could provide any). You're a legend in your own mind.

bob2356 says

Au contraire mon frère. You are claiming that the economic indicators that are are used by the vast majority economists, historians, and the general public are invalid which puts the onus of providing what you consider valid indicators squarely on you.

Once again I ask you the question I asked earlier, did the current recession/depression hit bottom in March 2009, when the stock market indices hit bottom? Did the previous recession hit bottom when the stock market indices hit bottom? Did any recession in your life that you can remember hit bottom when the stock market hit bottom? I can tell you the answer: not a single one of them. Stock market is usually considered a leading indicator for a reason.

If all you know are fellow idiots, then I wouldn't be surprised to see the "vast majority" of them believe in things by rote recall of bad textbooks despite obvious contradiction to their own life experience.

I'm still waiting for some type of documentation on this. So let me see if I understand. You are saying that the generally accepted theory that the huge credit bubble of the 1920's was actually the cause of the depression is incorrect.

Hey, it's good you are embracing Austrian Economics :-)
Yes, the huge credit bubble made a depression unavoidable; however, it did not have to become the Great Depression that lasted over a decade. The credit bubble could have been resolved in a much short time period, say, a year and half, like the 1921-22 depression, which had a beginning that was even more drastic than what happened after the 1929 crash. However, with President Harding refraining from intervening in the market place, unlike Hoover and FDR, the market place cleared the bubble waste quickly.

You seem to have a real problem with understanding the difference between the concept of bottom and the concept of end. You keep confusing and interchanging them in your comments. Bottom is when things start to improve, end is when they finish improving. It's not hard once you apply yourself. Try to focus.

Okay, I will refrain from getting personal and make fun of your rudimentary mistake. Recession and depression refer to sustained economic contraction. When things start to improve, it's called recovery. When improvement stops for two consecutive quarters or more, it's another bout of recession/depression. So yes, when a recession/depression ends, the economy has just punched the bottom, and is starting to recover.

bob2356 says

Even if the dust bowl had happened in the roaring 20's these people would have suffered severe poverty.

As far as farmers were concerned, the roaring 20's may as well have been a continuous dust bowl! The price of farm products was continuously trending down relative to almost everything else due to technological improvement: steam powered farm equipment, then diesel tractors. As farm mechanization advanced, small farms were driven out of business left and right. New England and upstate New York used to be almost all farm land outside the towns and cities; they are now mostly woodland largely because of that wave of mechanization and farm abandonment. The farmer leaving their farms however did not have to become desperate like Lang's subject. The ex-farmers supplied the labor for the factories during the roaring 20's.

FDR's (and Hoover's) policy of trying to maintain farm product price by government fiat however did produce the desperate and starving migrants: the low income strata was deprived of the benefit of lower farm product price: cheaper food. The policy not only failed to achieve the goal of keeping farm mortgages serviced (to benefit the banksters) but more importantly got in the way of industrial labor re-allocation. That's how the desperate and starving subject in the Lang photo came about.

bob2356 says

Really? Unemployment dropped from 15% to almost zero, industrial output increased 15% a year, industrial capacity increased by 50% altogether, productivity doubled, consumer spending increased 12% without any cars being sold.

The unemployment rate in North Korea is near-zero now! What a fabulous employment picture under government central planning! How exactly do you count industrial output when the output is switched from cans of household paint to artillery shells, of which 25% or so are duds? Who decides how much a 75mm shell is worth? Consumer spending number in the government statistics was up simply because the statistician was using the wrong inflation deflator: they used the coupon-required prices instead of black market prices where the price is real.

There was rationing of some goods, people I've talked to (family who lived through the depression mostly) about the era thought having a job and money even with rationing was better then being unemployed.

Apples don't fall far from the tree indeed. I suppose the North Koreans too should be grateful that having a job and ration coupons was better than being unemployed . . . never realizing having jobs and having market exchanges are market phenomena, not manana raining from the government-god.

The public overwhelmingly supported the war effort. Hard to believe in post Vietnam times, but true. Bonus points, the increases in capacity and productivity set the stage for an amazing 25 year economic boom that has never been seen before in history.

The public in all the belligerent nations during WWII supported the war effort . . . simply because they were all brain washed by the then new broadcast media technology (newspaper, radio, movies, megaphone networks). The 25yr economic boom after WWII was the natural result of having a deep hole to climb out of for most of the world, and for the US for almost two decades there was little industrial competition due to war time destruction in all other countries.

david1 says

Hardly. Keynesian policies (before, during, and after WW2 specifically) led to the greatest period of economic expansion after the industrial revolution.

Are you actually praising the establishment of the military industrial complex after WW2? Because that's about the only Keynesian policy immediately after WW2. The real cause for the economic expansion after WW2 was not the Keynesian military industrial complex, but the simple removal of war time government imposition on the economy, so economic production could re-orient towards civilian needs and wants instead of military demand.

Keynesian policies like the National Highway System, GI Bill, the Space Race, and the expansion of social security combined with Free Market, pre-OPEC cheap oil led to a positive feedback loop with the rise of consumerism.

There was nothing particularly Keynesian about National Highway System. The project lasted 4 decades! You can't be serious about the government was trying to fight a 4 decade-long down trend. LOL. Neithe GI Bill nor the Space Race had much to do Keynesian policy prescription for curing depression. They were just typical central planning.

"Pre-OPEC cheap oil" was just a codeword for what was before the oil producing nations recognized dollar devaluation.

The cronies you blame for the nation's economic ills were born of Reaganism; deregulation encouraged concentration of wealth - goverment spending shifted from domestic welfare to war stockpiling.

Cronies come in many different stripes.

You cannot ignore the free market, supply-side influence of the past 35 years when talking about where we are. A gold standard would have only exascerbated these problems.

The past 4 decades were the decades of pure fiat, after Nixon defaulted on Brettonwoods Agreement. The net result is quite obvious: the monetary discretionary power has been used to enrich the fat cats in this country at the expense of the middle class.

bob2356 says

Well I'm certainly glad it's true because you say it's true. I'd hate to have to look through a bunch of pesky numbers and facts (not that you could provide any). You're a legend in your own mind.

This:

A Monetary History of the United States, 1867-1960, blames the Federal Reserve for permitting two-fifths of the nation's banks to fail between 1929 and 1933 (or 10,797 of the 25,568 banks in 1929). Since deposits were not insured then, the bank failures wiped out savings and shrank the money supply. From 1929 to 1933 the money supply dropped by one-third, choking off credit and making it impossible for many individuals and businesses to spend or invest. Friedman and Schwartz argue that it was this drop in the money supply that strangled the economy.

From this

http://www.econlib.org/library/Enc1/GreatDepression.html

Rothbard says the same thing

You might also peruse the IPOs that I attached above as it shows a strong correlation between government overreach and less IPOs which is what I'm talking about regarding FDR's meddling. The really scary thing is that Frank Dodd and O care are going to have more impact on the economy.

Reality says

Once again I ask you the question I asked earlier, did the current recession/depression hit bottom in March 2009, when the stock market indices hit bottom?

You keep saying stock indices not me, I am talking about gnp/gdp and umemployment. Try reading what people write.

Reality says

Okay, I will refrain from getting personal and make fun of your rudimentary mistake. Recession and depression refer to sustained economic contraction. When things start to improve, it's called recovery.

Yet you keep using terms like bottom and end. Frequently interchangably. You can't have it both ways Either stick to technical definitions or popular usage. Since you don't accept things like unemployment or gnp/gdp it's a little mysterious what you are using to define your terms.

I assume you are now saying the great depression ended in 1932 since that is when economic contraction stopped. Other than a couple of quarters in 1938 the recovery was sustained from 1932 to 1944. I'm really confused how by your own definitions the great depression ended before FDR took office, yet you claim FDR caused the great depression. You keep moving all over the map contradicting yourself constantly, which is it?

Reality says

The unemployment rate in North Korea is near-zero now!

Pretty cool, the only things you can come up with to support your arguments are Nazi Germany and Communist North Korea. Certainly countries with political and economic systems that perfectly comparable to the US.

bob2356 says

Reality says

The unemployment rate in North Korea is near-zero now!

Pretty cool, the only things you can come up with to support your arguments are Nazi Germany and Communist North Korea. Certainly countries with political and economic systems that perfectly comparable to the US.

Both illustrate a simple point: the official unemployment number go down to artificially low levels when the government is providing make-belief jobs on a vast scale. That's what FDR's jobs programs were about, and why the government unemployment data from 1933 through 1945 became meaningless.

bob2356 says

You keep saying stock indices not me, I am talking about gnp/gdp and umemployment. Try reading what people write.

You were the one who cited stock market bottoming in October 1932 as evidence of the bottom of Great Depression. The government GNP/GDP and unemployment statistics from 1933 to 1945 were not at all comparable in validity to the data series before (and after): the government was essentially printing money to hand out millions of make-belief jobs one way or another. The process produced far more waste than wealth. GNP/GDP methodology simply counted all that waste as wealth . . . if you assume GNP/GDP meant the size of the economy instead of debt service capacity.

bob2356 says

Reality says

Okay, I will refrain from getting personal and make fun of your rudimentary mistake. Recession and depression refer to sustained economic contraction. When things start to improve, it's called recovery.

Yet you keep using terms like bottom and end. Frequently interchangably.

Because they are interchangeable, in case you are still not getting what Recession/Depression vs. Recovery mean in economics.

bob2356 says

You can't have it both ways Either stick to technical definitions or popular usage.

Recession/Depression means the period when the economy is contracting; Recovery means when the economy is expanding. That's pretty damn simple. What "popular usage" are you talking about? Economists may debate how the economy is to be (approximately) measured, but Recession/Depression vs. Recovery/Growth is always about incremental change, never about absolute value. Full recovery to 1928-29 high probably was not accomplished until the mid to late 1950's for the US, and 1960's for the rest of the world.

I assume you are now saying the great depression ended in 1932 since that is when economic contraction stopped.

Your assumption is silly after reading what I have written. The real economy did not stop contracting in 1933 and beyond. GNP/GDP numbers do not reflect real economic conditions when the government is massively involved handing out money to cronies and make-belief jobs.

And Bob's response is:

http://www.bing.com/videos/search?q=cricket+sound&mid=D43F32B7E1DCF1A0E99AD43F32B7E1DCF1A0E99A&view=detail&FORM=VIRE1