It’s all about bigger is better.
Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.
After scrutinizing Roosevelt’s record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years…
In an article in the August issue of the Journal of Political Economy, Ohanian and Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law June 16, 1933.
“President Roosevelt believed that excessive competition was responsible for the Depression…
The number of antitrust cases brought by the Department of Justice fell from an average of 12.5 cases per year during the 1920s to an average of 6.5 cases per year from 1935 to 1938, the scholars found. Collusion had become so widespread that one Department of Interior official complained of receiving identical bids from a protected industry (steel) on 257 different occasions…
Found by Guy Fawkes.
#63, LibertyPoser,
Winston Churchill once declared, …
Winston Churchill also believed anyone not of Germanic or Nordic decent was less worthy. He spoke several time favorably of concentration camps when the British held the Boers in them. Although I don’t have the reference in front of me, he also didn’t care if some poor slob in Yorkshire and his family starved to death; it was all in God’s plan.
In the first election after the war ended, Churchill was tossed from power. Simply because he didn’t understand that people weren’t items that could be placed in storage until needed. He never understood the sacrifices the British PEOPLE made.
And, Keynes major advice to Roosevelt was stymied by Morgenthau. Keynes wanted more government spending. Morgenthau wanted a more conservative policy. Morgenthau was, perhaps, one of Roosevelt’s bigger mistakes.
#45, lol, Fusion, you’re logic is impeccable as always. Friedman wrote an entire book explaining why he thought Keynes was wrong, and he won the Nobel Prize for that too.
#65, Poison Twin,
Again, no logical reasoning in your answer, just attacks on those who don’t agree with your opinion.
Do you deny you can have an economy without production?
Do you deny the WWII was the impetus that brought the GD to an end?
Do you deny that unemployment didn’t improve until WWII started even with all of FDR’s government spending?
Do you deny that Bush II was Keynesian?
Do you deny that Morgenthau believed in balanced budgets, stable currency, reduction of the national debt, and the need for more private investment? In 1939, after spending so much money against his wishes, he testified before the HWMC, “We are spending more money than we have ever spent before and it does not work. I want to see this country prosperous. I want to see people get a job. We have never made good on our promises. I say after eight years of this administration we have just as much unemployment as when we started and an enormous debt to boot.”
FDR spent way too much with nothing to show for it. The debt came because we spent money with nothing to show for it. Sure GDP was up, but that was government spending. Unemployment was still way up there.
#62
So what were these other infrastructure projects Hoover initiated?
Read about the RFC and the Emergency Relief and Construction Act, to name but two.
1, 3 I heard about this study on the radio about a month or so ago given what’s going on with the economy and the parallels already drawn between Obama and FDR. The key thing here is this study has come out of UCLA…. a school known for its liberalism, no?
58, And you have to wonder what the potential is to either easily repeat those figures or exceed them in today’s globalized economy and off-shoring of jobs.
63, And we had our own camps here for Japanese Americans who lost their homes and land thanks to FDR. So what?
# 69 Guyver said, “58, And you have to wonder what the potential is to either easily repeat those figures or exceed them in today’s globalized economy and off-shoring of jobs.”
Probably pretty high, especially with a Pres who seems hell bent to repeat proven disastrous econ policies of the past.
Oh boy. A story proving that something could have happened but never did.
I’ll file this one with the thesis on how Bush saved us from another 9-11 and a martian invasion.
#66, SL,
And Friedman has been largely discredited. The older Friedman got, the more wild his philosophies became, so the real question back is at which time in Friedman’s life are we talking.
By the time Friedman was advising Reagan, Mulroony, Thatcher, and Pinochet, he was a thorough fascist.
Let us not forget that according to the Republicans, stuffing $300 into every tax-paying household is the magic formula for getting sluggish economies moving…
Side note: Meg Sullivan may not have written the headline for her piece in 2004, but the headline is a bit misleading:
“FDR’s policies prolonged Depression by 7 years, UCLA economists calculate”
By Meg Sullivan
Then it turns out that this is not a global UCLA position statement. It really pertains to two economists:
“After scrutinizing Roosevelt’s record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.”
Responses to this article are not part of the story presented in this blog. That may be a more global problem with blogs in general. They’re not journalism, but they’re killing journalism by a thousand cuts.
Cut number one: Present ONLY one side of an issue.
Cut number two: Rarely if ever present two sides to anything.
…
Cut number one thousand: Do it solely for the TRAFFIC, not for any higher purpose.
#67, LibertyPoser,
#65, Poison Twin,
Again, no logical reasoning in your answer, just attacks on those who don’t agree with your opinion.
Oh? Where in #65 do I attack anyone? I discredit the standard of the supposed quote you offered.
Do you deny the WWII was the impetus that brought the GD to an end?
No. It was the final impetus that brought the Great Depression to a final end. It finally gave the massive government spending Keynes had been advocating all along. Since soldiers, munitions, and armaments serve no purpose to the national wealth, the effect was the equivalent of digging a lot of holes.
Do you deny that unemployment didn’t improve until WWII started even with all of FDR’s government spending?
There was slight improvement in unemployment. It is also assumed that his policies helped prevent even more unemployment.
Do you deny that Bush II was Keynesian?
In my opinion Bush is another neo-con, out to enrich themselves and their friends at the expense of the people. Sort of like a Leibertarian.
Do you deny that Morgenthau believed in balanced budgets …
Morgenthau is the biggest problem Roosevelt made during his administration. Balanced budgets didn’t put people to work, stimulating the economy did. Too little can be just as bad as doing nothing.
FDR spent way too much with nothing to show for it.
The generation that went through the Great Depression disagree. That is why he was elected four times and is hailed as one of the best Presidents in American history.
#68, Billy Boob,
Both were passed by Congress AFTER Hoover was already a lame duck. He neither endorsed them or wanted them.
#74, Buzz,
Cut number one thousand: Do it solely for the TRAFFIC, not for any higher purpose.
How correct you are. If, however, this was true journalism, then we wouldn’t get to comment. This is a blog where we make up the rules as we go along.
But you are quite correct in your assessment.
Concern for traffic? Moi???
I’m actually surprised that someone hasn’t commented on the Obama-like catch phrase “We need you” on that FDR button.
Ok Mr. Confusion you have once again proven your position to be impervious to contrary facts and logic. You win.
WWII if anything proves that increasing topline GDP with government deficit spending doesn’t do anything for wealth and living standards, and in fact demonstrated the “crowding out effect” that Keynes’ detractors predicted. During the WWII period regular goods and services availability plummeted and rationing took place as the command economy sucked up all resources. That period was harsher than the Depression; yet because of topline GDP growth from deficit spending and improvements in unemployment rates due to the draft and military production it has been twisted today into some kind of Keynesian golden age. You couldn’t buy enough sugar to bake a freakin’ cake during WWII.
#79, That period was harsher than the Depression; yet because of topline GDP growth from deficit spending and improvements in unemployment rates due to the draft
That is a very valid point and one I hadn’t considered before.
13% of the US population served in the armed forces during WWII. Before the war, only 2%.
Compared to today, ~2M or 0.6%.
I guess that’s one way to reduce employment — join a war and draft everyone.
#75, Poison Twin,
Again, no logical reasoning in your answer, just attacks on those who don’t agree with your opinion.
Oh? Where in #65 do I attack anyone? I discredit the standard of the supposed quote you offered.
All you offered were criticisms of the person, no evidence, other than someone else’s opinion, on the personal nature of the man, not whether he was right or not or why.
Do you deny the WWII was the impetus that brought the GD to an end?
No. It was the final impetus that brought the Great Depression to a final end.
Everyone else with disagrees with you. The war is brought us out of depression. Look at the numbers. The economy was bottoming out when the New Deal stuck it there.
It finally gave the massive government spending Keynes had been advocating all along. Since soldiers, munitions, and armaments serve no purpose to the national wealth, the effect was the equivalent of digging a lot of holes.
They were producing and selling. The manufacturing infrastructure was growing – which it wasn’t before the war even though he spent so much money.
Do you deny that unemployment didn’t improve until WWII started even with all of FDR’s government spending?
There was slight improvement in unemployment. It is also assumed that his policies helped prevent even more unemployment.
I’ll grant you that government work-do programs do feed people but you can’t keep it up indefinitely — there is no growth, only stagnation.
Do you deny that Bush II was Keynesian?
In my opinion Bush is another neo-con, out to enrich themselves and their friends at the expense of the people. Sort of like a Leibertarian.
Insults aside, there are more similarities to Obama’s policies when compared to Bush, then Obama compared to FDR.
Do you deny that Morgenthau believed in balanced budgets …
Morgenthau is the biggest problem Roosevelt made during his administration. Balanced budgets didn’t put people to work,
Tell that to Clinton. Aren’t you the one constantly bragging about how balanced his budgets were?
And what about the stable currency, reduction of the national debt, and the need for more private investment that he advocated? Should we throw that out, too, because Obama does believe in it?
stimulating the economy did. Too little can be just as bad as doing nothing.
Electroshock therapy stimulates, too. Too much and you kill brain cells. There is something to be learned there.
FDR spent way too much with nothing to show for it.
The generation that went through the Great Depression disagree.
That theory is slowing changing. FDR didn’t know what he wanted to do. He gave good radio, though.
That is why he was elected four times and is hailed as one of the best Presidents in American history.
Wartime presidents always do well, especially when they promise free ice cream on a hot day.
#81–LibertyLoser==poster child for theory over reality. A LIE-LIE-LIEBERTARIAN truther.
FACT: “The generation that went through the Great Depression disagree.”
LIEBERTARIAN: “That theory is slowing changing. FDR didn’t know what he wanted to do. He gave good radio, though.”
Thats right LOSER–facts don’t stand up to theory. Rant on you crazy LIEBERTARIAN.
>By the time Friedman was advising Reagan, Mulroony, Thatcher, and Pinochet, he was a thorough fascist.
LOL, FDR’s head of the NRA had a portrait of Mussolini on his wall!
Dangerous return to Keynes
http://tinyurl.com/drtoke
bobbo said “I think almost everyone agrees that re-regulation of the market is needed except for those Palin supporting types. Beyond that, no clear rules to follow.”
This is a typical debating technique that is invalid. It’s the faulty implied relationship overshadowing the point of the text fallacy. It’s worded in such a way as to lead readers to conclude that no one would want the association and that the authors conclusion must be authoritative, since it’s the opposite of the association. The relationship is implied to be so distasteful that it overshadows the point that the author is really trying to make. The problem with this line of reasoning is that it assumes that everyone agrees with it and attempts to push the reader to a particular conclusion. It’s reasoning by fallacy. It’s also a little underhanded, which means bad form.
Not everyone agrees that re-regulation is the answer. Isn’t this the most regulated money system in history? Why would so many people think that they should buy a house that they really can’t afford? Why would so many people think that refinancing their mortgage at 100 percent of their equity is a good idea? The answer is that they think (or have been told by brokers, politicians, etc) that they market will always go up.
I think that the acorns and brokers and everyone else really thought that if they can just get someone in then they’re golden. If they get in trouble then they just sell and at worse come out even.
But they didn’t understand how the economy really works. The Keynesian utopia is that we could produce a stable inflating economy with no or just mild recessions. The ability to have rising prices at a small rate forever. This is what the government is trying to achieve. Bush, Clinton, Obama… They think that the way to do this is to artificially manipulate the interest rate and introduce new currency into the market. This is inflation and it’s the point. It’s what they want. It’s also a massive regulation of the market. It’s bureaucrats getting together and deciding how the market should work. Raise the interest rate and watch the economy slow, lower the interest rate and watch it speed up. But it doesn’t always work because they don’t really know why or how it happens. They have no theory to explain how the bubble came to be or they would have prevented it but they never do. If they’re so smart why are we even in this crisis.
You guys can go on trusting the guys who don’t get it if you want but if I were you I’d start looking at the regulated system as the problem and not the market.
#85–gooddebate==I welcome your tutelage. Since what I posted is honestly presented, the error you suggest is not evident to me even on rereading.
Lets proceed bitesized: do you agree or not that “the market” suffered from a bit of lack of regulation? Here I’m thinking of the banking regulations that limited leveraging so that failed transactions could be covered by the reserves the banks were regulated to have. This regulatory scheme was not applied to “investment houses” when they created leveraged mortgaged backed securities under the fanatical devotion to LIEBERTARIAN freedoms and laissez-faire the market knows best idiotology.
Your thoughts?
I think that any regulation has side-effects which sometimes must be dealt with drastically and sometimes not as much. Like many drugs that are prescribed where there’s a second drug to lessen the side-effect. I think that is what is at work in the market today. The original regulation needs some help. The side effects of it cause various problems themselves. One of the side effects is the rise of risky behavior because money has been easy to lend (i.e. to those who can’t afford to accept). If all mortgages were sound then I guess mortgage backed securities would be a great investment. But since the system encourages lending at the expense of sound mortgages then you probably do need some kind of regulation to prevent sub problems.
But I’m not as interested in treating the side effects as I am in treating the main problem. Let me ask you, what is the bigger regulation, controlling the interest rate or banning mortgage backed securities?
#87–gooddebate==bitesized. You are mostly off topic but you did bounce against the question a little bit. Concentrate!!!
YOU said “Isn’t this the most regulated money system in history?”/// and the answer directly is “NO.” Hence the bitesizes to come to grips with reality.
I fail to see how failing to have ANY REGULATIONS AT ALL regarding investment houses over leveraging their assets is a “side effect” of regulation as you suggest but then seem to back away from.
You know that clear expression comes from clear thinking==as does muddled?
So, lets go again: Did lack of regulation of the investment houses comprise a major failure of the regulatory scheme?
Why do you feel the need to be insulting? Do I need to pick your comments apart and point out various places where you’re misconstruing what I said? I’ll only point out one thing for now; you said “I fail to see how failing to have ANY REGULATIONS AT ALL…” Did I propose that? Or are you assuming that’s where I’m going? I would say that you’re jumping ahead just a bit. Your question is very clear, would adding regulations to investing in the housing market be a benefit? My answer is maybe, but I’d want to see the theory that it would in fact help and if it turned out to be sound then sure I’d be willing to entertain the regulation.
However, then I suggesting that problems with investment in the housing market are just a secondary problem that is caused by another regulation, the manipulation of interest rates. How it happens is that sound investors are fooled and greedy investors see the opportunity because money is so easy to get because the interest rate is so low. They think it’s time to buy.
You can disagree if you want, that’s ok. But I think the argument comes down to what works best. If you like 7 boom years and a recession and 7 more boom years and another recession then choose the current system of manipulating the interest rate and inflating the currency. Hey, maybe we won’t have another recession as bad as this or the great depression.
But if you don’t like this then it’s time to find another theory to go by.
So, what do you think is the bigger regulation; interest rate manipulation or regulating housing market investment (or any other economic regulation you can think of)?
#89–gooddebate==hah, hah, what a misnomer. More a stretch goal I take it? Still a worthwhile goal. Stick with it. Cut and paste your longer discussions and save for a future read. Should bring a smile to your face.
Lets see. Substance or distraction?
I’ll give being responsive to your shotgun tangential response rather than bitesize a go just to demonstrate that if you can’t address a single issue, a multi-threaded discussion will surely be impossible?
1. Why do you feel the need to be insulting? /// I guess being insulted is better than being insensate, but just barely. How is what I said any different than your “analysis:” “This is a typical debating technique that is invalid.” OUCH!!! You called my post a debating technique and then said it was invalid. OH THE HUMILITY. WHY ARE YOU SO INSULTING??????
2. Do I need to pick your comments apart and point out various places where you’re misconstruing what I said? /// Ummm, tell me again just what a “debate” is then? You seem a bit confused as to what an exchange of ideas is much less actual textual analysis. But, YES==pick me apart, teach me, feed me. Make me a better person – – if I pay attention.
3. I’ll only point out one thing for now; you said “I fail to see how failing to have ANY REGULATIONS AT ALL…” Did I propose that? /// No, you did not propose that, and thats not what I said. Silly boy. Re read it for the relevant on point question I asked and post back if you still don’t get it.
4. Your question is very clear, would adding regulations to investing in the housing market be a benefit? My answer is maybe /// That wasn’t my question–but at least your apprehension is in the ballpark unlike your answer. Maybe? Hah, hah. This opens up a hole of epistemological confusion that will make any insight on your part a real challenge. There is no dialectic, no learning, no honesty if you can’t admit that one plus one is two. Not maybe. Maybe is for loser manipulators. In your case, “maybe” just inexperience? Wrestle with the idea==grab hold of it, BE HONEST. You are lost to good debate if you can’t admit to simple facts/conclusions. Don’t fret, dealing with reality will make the rest of your analysis that much stronger, or even to a change of position. That can’t happen with “maybes.” Grow up.
5. I change my mind. I don’t want to wander down the path of “manipulating interest rates” before good debate can be established.
In the main, most issues are interrelated “a little bit” but mostly stand on their own. When people evidence they don’t understand the issue on its own, it is rarely helpful to go on to the more subtle interactions.
For myself, I see little relevance of interest manipulations to over leveraging of mortgage backed security and the debt swap instruments that also sprung up in a TOTALLY UNREGULATED ENVIRONMENT. I’ll just echo your own characterisation==anything manipulated than ends poorly was not manipulated well. I stand for smart, pragmatic, long term manipulation. Some call that regulation.
6. To meet you 1/4th the way, you ask: So, what do you think is the bigger regulation?==regulations are not big or small. You’ll have to ask that in a relevant way like what set of regulations when mismanaged have the potential for greater market impact or some such as your question is fatally vague. But I’ll answer it directly anyway: everyone knows that Superman can Beat Batman unless Batman has kryptonite……..
#81, LibertyPoser,
Your whole post can be summed up as:
“Do you believe you know what the fuck you are talking about”.
And you don’t. You are trying to impose some revisionist history. And that won’t work. There are just too many people that did graduate from high school and don’t have to pretend they own a business.
#85, gooddebate
Baloney. You fail to present a clear thought on anything.
If ya can’t dazzle ’em with brilliance, baffle ’em with bullshit.
#89, gooddebate,
Again, you have failed to present a cohesive point.
Come back when the drugs wear off.
#90 – Yes you’re right, my debating comments are insulting, sorry about that. They also have nothing to do with your questions or my answers and questions. Should have edited it out.
Since the conversation is a bit muddled by me I guess I’ll trudge ahead and answer my question and see if you have an opinion about it. I think that the manipulation of interest rates is a much bigger regulation than any other economic regulation and that all other regulations exist because of it. For instance we wouldn’t need a regulation for packaging home mortgages if the interest rate was at a level that didn’t make people think that it’s time to buy. Also, people wouldn’t have the false idea that prices always rise without the inflating policy of the currency. So, I think that inflating the currency and artificially lowering the interest rate leads people to buy when they shouldn’t, creating the need for regulations about mortgage market financing.
You can disagree with this opinion, that’s fine. Is there a reason why we shouldn’t look at the interest rate policy and inflation policy first? Is this policy working to make us wealthier? Or is it the reason why we are having this recession?