btw, I said 1934 because that is when GDP started to increase.
As a general case war sucks for an economy. In the SPECIFIC case of WW2 it was good for the US economy but it sucked for everyone else. We got the capital from the British. Our economy was untouched by the conflict while most of our competitors were badly damaged (Britain) or outright smashed (Germany, Japan). Our only real economy competitor (British Empire) was crippled by the war and dissolved shortly thereafter - partly under the strain. Partition of India, withdrawal from the Middle East and preparation for the independence of the African and other Asian colonies in 1948 marked the end of the empire as a dominant power. This left the US with unchallenged military, industrial and economic supremacy by default.
People have screwed up ideas about what GD 1.0 meant because they over-focus on the US. For the rest of the world, it began much earlier - basically 1921 in the UK and Germany. There is alos a huge misunderstanding of how economies operate near full capacity in war. It's not government policy per se. It is the willingness of the population to work very hard for much less compensation in the interests of survival that causes it. The economic effect is similar to any other event where people double their work output and take a huge cut in living standards at the same time - via wartime inflation, rationing and purchase of war bonds. What would you expect to happen to production under those circumstances?
Discussions about economies and policies would be much more interesting if there were pictures of titties.
No WWII, no economic recovery until into the 40's at least, and no world domination of the economy by the US. The recovery was provided via war not the US gov'ts economic recovery New Deal plans. So trying to say that the gov'ts plans of massive spending saved the economy is very misleading.
GDP was on par with pre-crash levels by the end of the 1930s. The recovery was supercharged by the war, to be sure, but the New Deal did in fact help facilitate recovery.No WWII, no economic recovery until into the 40's at least, and no world domination of the economy by the US. The recovery was provided via war not the US gov'ts economic recovery New Deal plans. So trying to say that the gov'ts plans of massive spending saved the economy is very misleading.
So federal budget deficits, ending the gold standard/monetizing capital inflows caused by Hitler's aggression and lowering reserve requirements were actions taken by non-governmental entities?Originally Posted by Escriva
What are you responding to?So federal budget deficits, ending the gold standard/monetizing capital inflows caused by Hitler's aggression and lowering reserve requirements were actions taken by non-governmental entities?
The US has been in a depression ever since the advent of the income tax. Before that the US economy shat gold bricks and everlasting lollipops. And the US was even better position before Teddy Roosevelt's progressive regulation. Actually, our system is best in Antebellum, or maybe even before the Louisiana Purchase. Heck, we'd been better off if someone else besides the tax-monger, Federalist George Washington was our 1st President. At least Aaron Burr knocked off the central banking hack Alexander Hamilton.
Here are the Real GDP growth rates for the years following implementation of some or all New Deal policies:
'34 - 10.88%
'35 - 8.88%
'36 - 13.05%
'37 - 5.12%
'38 - (3.44%)
'39 - 8.07%
'40 - 8.77%
'41 - 17.07%
When the depression you're climbing out of resulted in a $#@!ulative loss of nearly 30% of your economy, the recovery is going to take some time. When your policies run counter to the appropriate one for the time (see balanced budget, conservative policy effects resulting in the '37 recession), the problem is compounded.
So then you contend that deficit spending does not affect the money supply?
Gold bricks and everlasting lollipops????? No recessions no crashes before the income tax law?
And George Washington??? Yeah, he was such a $#@!.
Just go ahead and make up $#@!. After all this is just an internet forum and revisionist history is very cool right now.
two sarcastic ships passing in the night i fear...
http://www.brookings.edu/~/media/Fil...sons_romer.pdfOriginally Posted by Christina Romer
The actual generally accepted view is that fiscal policy had some effect, and it was in line with the relatively low magnitude of enacted policy. IOW, sustained higher deficits through the '30s would have led to a quicker recovery. G most certainly had something to do with the economic fortunes of the '30s.
with ever expanding government spending and deficits, it's a wonder this country ever goes into recession.
To monetary policy, the cause of - and solution to- all of our economic problems:
Friedman and his coauthor Anna J. Schwartz argued in their Monetary History of the United States that this was a misreading of the lessons of the Great Depression, which in Friedman's view was caused by monetary mismanagement--or perhaps could have been rapidly alleviated by skillful monetary management--alone.
Over the course of forty years, Friedman's position carried the day. Federal Reserve Chair Ben Bernanke right now holds Milton Friedman's view, not John Maynard Keynes's, of what kind of strategic interventions in the economy are necessary to provide for maximum production, employment, and purchasing power, and stable prices.
http://www.federalreserve.gov/boardd...22/default.htmThat is where the debate stood around 1980. About that time, however, economic historians began to broaden their focus, shifting from a heavy emphasis on events in the United States during the 1930s to an increased attention to developments around the world. Moreover, rather than studying countries individually, this new scholarship took a comparative approach, asking specifically why some countries fared better than others in the 1930s. . ..
he finding that leaving the gold standard was the key to recovery from the Great Depression was certainly confirmed by the U.S. experience. One of the first actions of President Roosevelt was to eliminate the constraint on U.S. monetary policy created by the gold standard, first by allowing the dollar to float and then by resetting its value at a significantly lower level. The new President also addressed another major source of monetary contraction, the ongoing banking crisis. Within days of his inauguration, Roosevelt declared a "bank holiday," shutting down all the banks in the country. Banks were allowed to reopen only when certified to be in sound financial condition. Roosevelt pursued other measures to stabilize the banking system as well, such as the creation of a deposit insurance program. With the gold standard constraint removed and the banking system stabilized, the money supply and the price level began to rise. Between Roosevelt's coming to power in 1933 and the recession of 1937-38, the economy grew strongly.
I have only scratched the surface of the fascinating literature on the causes of the Great Depression, but it is time that I conclude. Economists have made a great deal of progress in understanding the Great Depression. Milton Friedman and Anna Schwartz deserve enormous credit for bringing the role of monetary factors to the fore in their Monetary History. However, expanding the research focus to include the experiences of a wide range of countries has both provided additional support for the role of monetary factors (including the international gold standard) and enriched our understanding of the causes of the Depression.
Some important lessons emerge from the story. One lesson is that ideas are critical. The gold standard orthodoxy, the adherence of some Federal Reserve policymakers to the liquidationist thesis, and the incorrect view that low nominal interest rates necessarily signaled monetary ease, all led policymakers astray, with disastrous consequences. We should not underestimate the need for careful research and analysis in guiding policy. Another lesson is that central banks and other governmental agencies have an important responsibility to maintain financial stability. The banking crises of the 1930s, both in the United States and abroad, were a significant source of output declines, both through their effects on money supplies and on credit supplies. Finally, perhaps the most important lesson of all is that price stability should be a key objective of monetary policy. By allowing persistent declines in the money supply and in the price level, the Federal Reserve of the late 1920s and 1930s greatly destabilized the U.S. economy and, through the workings of the gold standard, the economies of many other nations as well.
Your position seems to be that fiscal policy cannot have any affect on the money supply. That's what I'm arguing against, because that is clearly wrong.
Originally Posted by TexonLongIsland
Bernanke today admitted that he believes fiscal policy affects monetary policy by his concerns Fed monetary policy would not be able to offset not extending the '01/'03/'09 tax cuts and by not dealing with the automatic spending "cuts." So, that's two economists whose statements/views you've mischaracterized.
The people I'm quoting about Romer and bernanke are Romer are Romer and Bernanke. How is that misrepresenting? Everything I've said about them is true. You're simply lying, which is why you can't cite an example of an alleged misrepresentation. You're economically ignorant (profoundly so), and working from a script, which is also why you had to lie about my personal views, which don't at all reflect what you claimed in your post.
The consensus view among economists, which includes Romer (on the left wing) and Bernanke (more in the mainstream) about the depression is the following:
1) the depression was primarily a monetary phenomenon
2) the recovery was primarily a monetary phenomenon
3) 1930s spending programs had little or no effect
4) WWII had little/no effect because the things leading to recovery were essentially done before 1942.
IOW, the claims made by you and others that new deal spending and/or WWII spending were the factors, or primary factors, or even major factors, are incorrect. Any attempt
To attribute your views (most likely coming from junior high history taught by education majors) to Romer, Bernanke, or any other mainstream economist is a misrepresentation. You're simply in over your head, Obama style, on this topic
There is a reason that you have to keep making false claims and attributing them to me, and it's not because I'm the one who's a hack.
Keep digging. I'm not the one with a partisan interest.
Put up or shut up. Provid an example, or apologize for lying.
Post #72, idiot. You reply to my question by invoking the thoughts of Romer and DeLong, inter alia, to support your views by implying they think that fiscal policy doesn't "really" affect money supply. And again just now you misrepresented Romer again. She said the effects were small in the GD b/c fiscal policy monetary expansion wasn't really tried, not supporting your view that "G, as ever, had nothing to do with it." That's a blatant misrepresentation of her views. Unbelievable.
On Bernanke, yes, you didn't say it yourself, you quoted DeLong. You quoted him in a way that obfuscates Bernanke's actual view that it's more effective to pull the levers available to the Fed than to run budget deficits. It's not true that Bernanke thinks G has no effect on money supply, as evidenced by his comments this week.
That you dance around these obvious examples makes evident your inability to leave partisanship behind in any discussion.
DeLong has also stated that the consensus, as of five years ago, was not that fiscal policy had no effect, but that fiscal policy simply "worked more slowly than conventional monetary policy." And that this sluggishness arose from how slow governments are to react in relation to central banks. Also, DeLong recently co-wrote a piece with Summers on stimulus packages in our current economic climate, which would tend to show that he had differing beliefs about fiscal policy than you've said he does. So that's another person whose views you've misrepresented. See http://delong.typepad.com/sdj/2012/0...d-economy.html and http://www.brookings.edu/~/media/Fil...ongsummers.pdf.
Specifically, DeLong and Summers argue:So, now are you going to backtrack from "had no effect" through "not really" to, "OK, some, but not much?" Not that you'd have much face left to save, at this point, but, a little is better than none.Originally Posted by Fiscal Policy in a Depressed Economy
Or do you want to dig some more, hack?
Others in this thread, including you, said new deal spending, WWII, or some combination thereof was responsible for the recovery. I disagreed. What I attributed to Romer as a member of the Econ profession was the following:
The generally accepted view is that the depression and subsequent recovery were primarily monetary phenomena, that fiscal stimulus had little or no effect on the recovery, and that WWII had little or no effect on the recovery.
What I represented as Bernanke's views were views expressed by Bernanke in a quote I posted (do you know what a quote is?) and linked.
Where are the misrepresentations there? Drop the partisan script. Drop the misrepresentations of what I said, drop the straw men, drop the obfuscating, etc. Put up or shut up. Either show a misrepresentation, or admit you lied.
I'm sorry you are economically ignorant, and not smart enough to stay out of discussions over your head. I'm sorry your explanations (war is the ultimate stimulus) are wrong. But your repeated errors, and your refusal to acknowledge them, doesn't make ME a hack.
I didn't ever claim that Romer or Bernanke said that, liar. Either quote the post, or apologize for lying. You are lying about what I attributed to Romer, Bernanke, DeLong, and the profession generally. I've posted at least 3 times what that is. If that's not what you wanted me to post, that's your problem not mine.Post #72, idiot. You reply to my question by invoking the thoughts of Romer and DeLong, inter alia, to support your views by implying they think that fiscal policy doesn't "really" affect money supply. And again just now you misrepresented Romer again. She said the effects were small in the GD b/c fiscal policy monetary expansion wasn't really tried, not supporting your view that "G, as ever, had nothing to do with it." That's a blatant misrepresentation of her views. Unbelievable.
What did I say about De Long's views about fiscal policy? Oh that's right; nothing, you lying imbecile. Seriously; can you type a sentence without lying? I stated repeatedly what the consensus position is,and that even those on the left - including Romer and De Long - are within that broad consensus. That is, for at least the 4th time, the following:Also, DeLong recently co-wrote a piece with Summers on stimulus packages in our current economic climate, which would tend to show that he had differing beliefs about fiscal policy than you've said he does.
1) The Depression was a chiefly monetary phenomeno
2) Recovery was chiefly monetary
3) WWII and ND stimulus spending had little or no effect
That is all. And it is all true. Your statement of the consensus position, like your statement about WWII as stimulus, was false.
This is pure projection. You injected partisanship into this, and then ascribed a bunch of positions to me that I don't hold (in addition to all the rest of your lying in this thread). You have no clue about economics, but have a partisan script from which to read. Youd do well to STFU about subjects about which you are so painfully ignorant.That you dance around these obvious examples makes evident your inability to leave partisanship behind in any discussion
I see you've chosen to keep digging. I'm out, loser.
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