patrick.net

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