I’m just curious whether that’s all to this instance of this discussion. The topic is raised, people like xtisme come in and burp their ignorance about “government programs” not getting us out of the “economic doldrums” of the Great Depression, others provide actual data that shows significant economic improvement well before any ramp up for WWII started, they’ve got no answer and they slink away?
Within 3 months, I predict that each one of the people spouting nonsense here will be back on this topic spouting the same nonsense in clear contradiction to the actual evidence.
The question we have to ask is “Is our conservatives learning?” The answer is a clear and resounding “No”.
They’ve got to keep clinging to their conservative articles of faith. If they accept that massive government intervention in the economy is sometimes necessary, that government programs can be spectacular long term successes, that tax cuts don’t increase revenues but do cause massive long term deficit problems, etc. etc., what have they got left to believe?
Yes, it does get bizarre. At least here we have “The New Deal didn’t end the Great Depression, WWII did!” … which is at least a half-truth, although used by right-wingers perniciously. Several weeks ago we had a “libertarian” arguing that even WWII didn’t end the Depression, it ended after the war. As far as I can tell, his syllogism was
[ul][li] Depressions are bad.[/li][li] Wars are bad.[/li][li] Therefore, wars are depressions.[/li][/ul]
That guy, BTW, had lengthy posts in which he outlined his philosophy; I remember three tenets:
[ul][li] The U.S. should revert to gold standard.[/li][li] Necessary government regulation is necessary; unnecessary regulation is unnecessary.[/li][li] Whether his kids get rubella vaccines should be up to him, not the government.[/li][/ul]
For the first, he refused to debate anyone who hadn’t read his 73 crackpot websites; the second was one we could all agree on ( ); so I tried to challenge him on the third. That the government mandates Johnny’s vaccine so that other kids don’t get rubella seemed a good way to acquaint him with the reasons (Tragedy of the commons) why pure libertarianism doesn’t work. He never even remotely grasped the concept. :dubious:
In short (and sorry if this isn’t BBQ Pit) these guys are just not over-endowed mentally.
Obviously the New Deal was a spectacular failure, but I’m not so sure the argument that WWII ended the Depression hold a lot of water, either. Consider this little fact:
World War II ended on September 2, 1945, but the Dow Jones didn’t get back to it’s pre-Depression high until November 24, 1954.
Even if you want to limit the discussion to the Dow Jones, the words “spectacular failure” are completely wrong. Unless you consider 472% growth a spectacular failure". I don’t.
As you can see, by 1937, the Dow had returned to equal its pre-1929 high. The point you are talking about is a relatively anomalous peak of 381.17. You’re right that this was not equalled again until 1954, but your argument is entirely bogus. I would agree with you that your fact was quite little.
The growth in the Dow between its low of 41.22 to 194.40 in 1937 (prior to another dip) was, again, 472%.
So, please do tell us how else it is “obvious” that the New Deal was a “spectacular failure” because this part of your argument isn’t very obvious.
A couple of things, please. Cites happily provided if needed, but most of what I’m going to say are conclusions from well established facts.
First of all, those who assert that criticism of the New Deal amounts to a criticism of Keynesian economics have vastly oversimplified the argument. There weren’t enough Keynesians on the ground in the administration to make this charge stick, at least in high places. Roosevelt himself had an iconoclastic political philosophy. Morganthau wasn’t a Keynesian at all.
One of the worst decisions in the Depression was the imposition of the Smoot-Hawley tariff. That is rightly blamed on the Republicans. But the recession of 1937 isn’t as easily blamed on them - the choking effects of the NRA and the uncertainty its policies produced dried up private investment, and the biggest booster of the balanced budget was Morganthau himself. Once the NRA was finally declared unconstitutional a more robust recovery began and employment followed.
Roosevelt’s greatest accomplishments, IMHO, were banking and monetary reforms. His bad decisions were nearly enough to overshadow these, but not quite.
I didn’t want to use a Wikipedia cite, but this is the only graph I’ve found. It does conform to others I’ve seen in the past. It’s clear that WWII did not produce a dramatic change in GDP growth. It’s pretty hard to find a definitive end point for the Depression. It’s also impossible to show that the New Deal didn’t work. The only claim that could be made is that some alternative, not actually implemented, could have done better. A useless, but very versatile argument.
Also, Keynes’ General Theory wasn’t published until 1936. You and Paul Krugman would appear to agree on this point you’re making here.
A much more parsimonious explanation is Roosevelt’s abandonment of the stimulus spending policies, responding to criticism by attempting to cut the deficit precipitously.
But help me to try to get your point. When I look at the rise in GDP from 1933 to 1937, it looks like a clear, sharp linear increase, with no hint of discontinuity around 1935. Similarly, graphs of improving unemployment show no effects around the time of the discontinuation of the National Recovery Administration. So, what can you point to that comes close to supporting your assertion that the NRA was choking anything, and that recovery started after it was declared unconstitutional?
That’s a clever phrase that sounds like it intends to blame conservatives for a recession in 1937. Maybe the conservatives did insist, but FDR made the decision, and he was not in the habit of kow-towing to conservatives. The GDP had returned to pre-Depression levels, unemployment had dropped significantly, so why wouldn’t FDR try to cut back government spending?
Don’t say things like that. I have to defend conservatives when that happens, and I don’t like doing that.
Oh, don’t get me wrong, FDR made a mistake by cutting spending. But it was at the urging of conservatives who thought cutting the deficit was more important than stimulating the economy. FDR showed poor judgement by listening to them.
I suspect that many of the unemployment statistics cited (from the 1929-1941 period) are incorrect. What about people who dropped out of the labor force, or went back to subsistence farming? Or people like the Joad family (of “The Grapes of Wrath”)-were people like the Joads even counted?
The fact is, the Great Depression was prolonged because of the contraction of the money supply. Had the Fed expanded the money supply, there would have beena short (24-36 month ) recession following 1929-but nothing like the decade-long depression that we had. All the “do gooder” programs of the so-called “New Deal” did little or nothing-the huge expansion of the wartime economy did end the depression.
But, to return to the point of my OP, “the huge expansion of the wartime economy” was primary a huge expansion of government spending. So, if a huge expandsion of government spending is what really ended the Depression, but the lesser expansion of government spending during the New Deal failed, then the problem with the New Deal was that it was too small.
Well, as I have mentioned several times, it is not clear that WWII spending changed economic conditions that much, or that there is a clear end to the Depression. But even if that were the case, why would an increase or decrease in spending be necessarily better? For a given circumstance, wouldn’t there be an ideal level of government spending in terms of economic growth? More spending could have the same negative effects of less spending.
(I don’t even have much disagreement with your premise, just the logic you’re using to prove it)
I’m just responding to ralph124c’s post. He says “the huge expansion of the wartime economy did end the depression”, which implies that he believes that the Depression was ended by the government’s big increase in defense spending. I can’t think of what else this “huge expansion” might be referring to.
So, conservatives are saying that a moderate amount of government spending (aka The New Deal) didn’t help the depression–even though GDP increased and unemployment decreased every year of the New Deal except for the aforementioned blip in 1937–but a massive increase in government spending (aka fighting WWII) did.
); so I tried to challenge him on the third. That the government mandates Johnny’s vaccine so that other kids don’t get rubella seemed a good way to acquaint him with the reasons (Tragedy of the commons) why pure libertarianism doesn’t work. He never even remotely grasped the concept. :dubious: