The Great Depression: Causes and Consequences

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Re: The Great Depression...causes and consequences

Unread postby James » Mon Apr 12, 2010 6:31 pm

WeiWenDi wrote:Then make it. I've shown good faith here by actually outlining the argument, I expect you (or Objectivist) to do the same or concede. The burden of proof is on you to make the case, since a straightforward interpretation of the relevant data between 1933 and 1939 show a marked improvement in output corresponding with the New Deal, accelerated with increased intervention.

I've been skimming here. I'm not sure what argument you've been making with Objectivist and I haven't even touched up on all the points in this thread (and the previous discussion). And that said, I'd love to go into great detail, but I can't find my accursed books, and my memory's not good enough for all the names, dates, and events I need.

If that means you don't want to chat with me about it, that's fine, but for whatever it is worth, this is a very large subject which warrants quite a bit of reading and understanding—especially when the Great Depression has been skewed so heavily over previous recessions and this one in particular.

The Forgotten Man: A New History of the Great Depression (or softcover) is a particularly excellent book on the subject. While I'm not going to dismiss a forum discussion with a blanket comment like 'read this book'—not exactly the spirit of a forum—I highly recommend this to you, or anyone who is interested in better understanding the Great Depression, economics, and our economic position today.

A straightforward interpretation fo the relevant data between 1933 and 1939?
What relevant data? Unemployment Rates?

WeiWenDi wrote:Baron Keynes' response to recession was that stimulus efforts that would ameliorate its effects. The theory was that government would act as a temporary employer to directly counteract the surplus caused by a decrease in demand in the labour market. And it did exactly what it was designed to do, which was to soak up some of the labour surplus; the problem was that it simply wasn't aggressive enough to counteract the decline in total output - and that is what caused FDR to shift his views on intervention further left after 1937. The $5 billion stimulus package and the subsequent war demanded that the government become more aggressive in its employment policies - though the branches doing the hiring weren't just the WPA, the TVC or any of the other New Deal agencies, but the Army and the Navy.

The problem with employment through government spending, at least outside war, is that it rarely results in any substantial degree of employment* (though it does increase taxes). Public sector focus also tends to counter-weight with private sector neglect, taxation, or other punishment. A horror indeed when it is the private sector that drives so much of our economy, and outside special cases like World War II, is the single greatest driving factor behind our nation's employment rate. Employment is especially damaged when small business in the private sector is fearful or diminished (say, through taxation). Government employment outside war through the end of the Great Depression was hardly relevant statistically. The unemployment rate remained pretty much steady (dismal) right up until the war (at which point it ended with startling speed). This is not only because men were shipped off to war, but also because men at home found employment everywhere. Women were also employed preparing the likes of uniforms; general factory work. If it was the government programs that resulted in these jobs I could support your argument, but it was the war jobs that turned things around. And those people weren't employed because the government thought it would be a bright solution to the economy—they were employed because their participation was needed to fight the war.

*Note that Obama has discovered this the hard way. His initial economic efforts hurt the private sector and focused on big spending and big government expansion. This was supposed to result in jobs—it didn't. Now he's talking about supporting the private sector and he's also adjusting to take a very different approach to our economy. I haven't been following him as closely as I could, but what he's saying these days makes a whole lot more sense.

(And this is not a bash on the Democrats by any means. Republicans had their own moronic ideas about how this problem might magically be solved overnight.)


WeiWenDi wrote:If you want to argue that the military are not government employees, by all means go right ahead. It should be an interesting argument... if you actually make it rather than the weak 'some people say' that you employed at the end of your last post. (I could likewise claim that 'so many great books out there' will back up the standard interpretation of the efficacy of the New Deal programmes, but generally I have too high a respect for your intelligence to do so.)

See above. The fact that these employees were employed by the government in some capacity is not relevant. It is the circumstances under which they were employed. It doesn't matter what sort of economic philosophy we might be operating under—when you're fighting a war of this magnitude and you need such a sweeping percentage of your population to work specifically to support the war, you are looking at the effects of warfare on economy—not the effects of a specific economic principle on the economy.
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Re: The Great Depression...causes and consequences

Unread postby WeiWenDi » Mon Apr 12, 2010 7:02 pm

James wrote:The Forgotten Man: A New History of the Great Depression (or softcover) is a particularly excellent book on the subject. While I'm not going to dismiss a forum discussion with a blanket comment like 'read this book'—not exactly the spirit of a forum—I highly recommend this to you, or anyone who is interested in better understanding the Great Depression, economics, and our economic position today.


Shlaes is not an economist, and has no formal training in the subject. She's an English major with an ideological axe to grind - she may be good at spinning a yarn, but it's dangerous to fall into the trap of relying on someone who is basically a popular entertainer with regard to such - as you rightly say - a complex topic.

James wrote:A straightforward interpretation fo the relevant data between 1933 and 1939?
What relevant data? Unemployment Rates?


I believe I said output, meaning real GDP. Increased demand means increased output, which means increased demand for labour by the private sector. Rates of unemployment tend to mirror these figures - though I think we have to be careful here with the raw data, since they don't show how much of the unemployment is due to cyclical factors and which was due to the amount of sheer movement which occurred throughout the Depression (which can't really be laid at the feet of either the public or the private sector).

James wrote:The problem with employment through government spending, at least outside war, is that it rarely results in any substantial degree of employment (though it does increase taxes).*


Only if you're dealing with a balanced budget rule. Taxes tend to naturally decrease during recessions because of the diminished share of output; government spending is theoretically independent (though by our current laws, it isn't in practice).

James wrote:Public sector focus also tends to counter-weight with private sector neglect, taxation, or other punishment. A horror indeed when it is the private sector that drives so much of our economy, and outside special cases like World War II, is the single greatest driving factor behind our nation's employment rate.


I'm sorry, but this statement is simplistic to the point of being completely misleading. This ideologically-motivated false dichotomy you're drawing between 'public' and 'private' generally disappears in the real world, where private institutions reap all sorts of economic benefits from public programmes and where public institutions make substantial use of private contractors to do their jobs. I don't see how the case can be made that the New Deal punished small businesses in any significant degree; at any rate, small business owners on the whole were not among the New Deal's prominent detractors on the left (Reinhold Niebuhr and associated union figures, as above) or on the right (large corporations like DuPont and Ford).

James wrote:The unemployment rate remained pretty much steady (dismal) right up until the war (at which point it ended with startling speed).


It was improving significantly, though - it had recovered almost to pre-1937 levels before WWII happened. You can't say it was remaining steady throughout 1938 when the official data say otherwise.

James wrote:It doesn't matter what sort of economic philosophy we might be operating under—when you're fighting a war of this magnitude and you need such a sweeping percentage of your population to work specifically to support the war, you are looking at the effects of warfare on economy—not the effects of a specific economic principle on the economy.


Even when the economic situation that the war brought about was a direct application of that principle? I'm sorry, but that will be a fairly tough sell. And economic principles do apply in war - we've been fighting a couple for the last nine years, and the effects on our economy have not been impressive. My opinion on this is that during WWII, Roosevelt and Truman knew enough to ask firms and consumers to make sacrifices and change their normal microeconomic activity specifically for the war effort and the rebuilding efforts that followed - the purveyors of our current wars have had no such foresight.
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Re: The Great Depression...causes and consequences

Unread postby Shikanosuke » Mon Apr 12, 2010 7:05 pm

WeiWenDi wrote: I think it's an extreme statement to say that '[a]lmost nothing through that spending ... resulted in worthwhile improvements' came out of the New Deal, and one not borne out by the evidence.


Exactly why I asked. The New Deal produced many programs which helped, the TVA among them.
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Re: The Great Depression...causes and consequences

Unread postby James » Mon Apr 12, 2010 7:28 pm

WeiWenDi wrote:Shlaes is not an economist, and has no formal training in the subject. She's an English professor with an ideological axe to grind - she may be good at spinning a yarn, but it's dangerous to fall into the trap of relying on someone who is basically a popular entertainer with regard to such - as you rightly say - a complex topic.

Seriously? Have you read the book? Have you read other books about the Great Depression? I'm extremely surprised at how dismissive your response to this is. And additionally, I'm happy to find knowledge in this subject outside the word 'economist' as well. The title 'economist' absolutely does not confer upon someone the ability to assess history and solve economic problems our nation faces, as evidenced by all the rubbish economists spew out in addition to all the gold eggs they lay. I assume you're not one to dismiss history?

WeiWenDi wrote:I believe I said output, meaning real GDP. Increased demand means increased output, which means increased demand for labour by the private sector. Rates of unemployment tend to mirror these figures - though I think we have to be careful here with the raw data, since they don't show how much of the unemployment is due to cyclical factors and which was due to the amount of sheer movement which occurred throughout the Depression (which can't really be laid at the feet of either the public or the private sector).

But none of this rubbish resulted in employment and improvement in conditions. The biggest problem through creation of employment through government programs is that the cogs clog up and nothing much really happens. And why rumble through a roundabout stimulus to the private sector when you can support them directly? Even if you want to somehow argue around this it still doesn't address the simple fact that living conditions were what they were right up until the war.

WeiWenDi wrote:
James wrote:The problem with employment through government spending, at least outside war, is that it rarely results in any substantial degree of employment (though it does increase taxes).*

Only if you're dealing with a balanced budget rule. Taxes tend to naturally decrease during recessions because of the diminished share of output; government spending is theoretically independent (though by our current laws, it isn't in practice).

You addressed the taxes observation, but not the key point.

WeiWenDi wrote:I'm sorry, but this statement is simplistic to the point of being completely misleading. This ideologically-motivated false dichotomy you're drawing between 'public' and 'private' generally disappears in the real world, where private institutions reap all sorts of economic benefits from public programmes and where public institutions make substantial use of private contractors to do their jobs. I don't see how the case can be made that the New Deal punished small businesses in any significant degree; at any rate, small business owners on the whole were not among the New Deal's prominent detractors on the left (Reinhold Niebuhr and associated union figures, as above) or on the right (large corporations like DuPont and Ford).

I'm moving between discussion about our modern-day economic concerns and past economic concerns. The private sector is vital today and there is a lot more we could be doing to support them. In the Great Depression, the problem was more that FDR's programs did little to address the fundamental problems dragging the whole thing out (just as some of the big 'stimulus' endeavors today have done little to address today's problems). And you can bet I was being general—that's going to happen when you're speaking generally about subjects as big as these. You know this.

And that line I'm drawing between 'public' and 'private' is not a non-existant line. Hoping to prop up the private sector through public programs and spending is inefficient and wasteful. The money lands in the wrong hands and never achieves the sort of diverse benefit it needs to (exception: WW II).

James wrote:It was improving significantly, though - it had recovered almost to pre-1937 levels before WWII happened. You can't say it was remaining steady throughout 1938 when the official data say otherwise.

Image
Lots of improvement, that. (I hope the image I searched up displays).
It sounds like you're far from unfamiliar with economics. I don't need to point out what gradually happens after a recession/depression starts, I wager? A gradual drop (not that a very impressive one exists here at all—heck, there is even a big spike after the New Deal II) is impacted by many factors.

James wrote:Even when the economic situation that the war brought about was a direct application of that principle? I'm sorry, but that will be a fairly tough sell. And economic principles do apply in war - we've been fighting a couple for the last nine years, and the effects on our economy have not been impressive. My opinion on this is that during WWII, Roosevelt and Truman knew enough to ask firms and consumers to make sacrifices and change their normal microeconomic activity specifically for the war effort and the rebuilding efforts that followed - the purveyors of our current wars have had no such foresight.

Here's the problem, my friend. If the government really could just churn out a whole bunch of money to create jobs (needed or not) it really would address unemployment. But that's a lolli-pop land dream. In reality you get what we've seen recently under Obama (and in nearly every other application of this principle): hoards of money being thrown out (whether in good intention or not) and a highly depressing amount of jobs created as a result. It should not be surprising why this is the case. First, to hire the population, very universal jobs must be created (the war did this). Second, there must be many of them (not going to happen without genuine need for the functions of those jobs; the war did this). Third, the bureaucracy must have direction, purpose, understanding (i.e., it must be motivated to focus that money on specific tasks or objectives so the money is not wasted or whiled away; the war did this). Without genuine need for the jobs in question (I'm not talking about people saying they want jobs; I'm talking about those jobs needing to exist to serve a valid function) everything falls apart.

Shikanosuke wrote:Exactly why I asked. The New Deal produced many programs which helped, the TVA among them.

It produced great economic programs—and many terrible ones as well.
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Re: The Great Depression...causes and consequences

Unread postby WeiWenDi » Mon Apr 12, 2010 7:58 pm

James wrote:Seriously? Have you read the book?


I did - after seeing Shlaes on TDS. I was disappointed by its highly anecdotal approach and its ideological distortions of the data, particularly with regard to temporary employment statistics.

James wrote:Have you read other books about the Great Depression?


a.) I have. b.) Why is this relevant?

James wrote:And additionally, I'm happy to find knowledge in this subject outside the word 'economist' as well. The title 'economist' absolutely does not confer upon someone the ability to assess history and solve economic problems our nation faces, as evidenced by all the rubbish economists spew out in addition to all the gold eggs they lay. I assume you're not one to dismiss history?


Maybe it's just old-fashioned of me, but I prefer the authorities and sources and (dare I say it?) experts I trust to have relevant experience and credentials - in that order. One of the most disappointing things I find about modern society is how little weight either of those receive anymore in comparison with pop-star appeal and self-promotion. Probably won't be long before I start yelling at the damn kids to get off my lawn, but so it goes.

James wrote:But none of this rubbish resulted in employment and improvement in conditions. The biggest problem through creation of employment through government programs is that the cogs clog up and nothing much really happens. And why rumble through a roundabout stimulus to the private sector when you can support them directly? Even if you want to somehow argue around this it still doesn't address the simple fact that living conditions were what they were right up until the war.


Oh, now there's a technical explanation! And again I'm surprised by your lack of familiarity with how the New Deal worked in practice - both early on and after funding was re-introduced in 1938 - the idea was to stimulate the demand side of the economy by supporting consumers directly. The government couldn't and didn't do much by these standards early on (for the reasons I gave earlier), but that's hardly a refutation of the theory itself.

James wrote:Hoping to prop up the private sector through public programs and spending is inefficient and wasteful. The money lands in the wrong hands and never achieves the sort of diverse benefit it needs to (exception: WW II).


You can't be serious about that statement, unless you're of the opinion that households and consumers are unable to make microeconomic decisions. After all, the entire point of Keynesian stimulus is to put money into the hands of consumers.

James wrote:Lots of improvement, that. (I hope the image I searched up displays).


Oh, come on. I want to see the source on that data, not a pretty picture of highly dubious origin (seriously, that is some messed-up and misleading interpretation on that graph - not surprising since it comes straight from the Heritage Foundation). And the improvement in unemployment rates started up again once the spending resumed during the third quarter of 1938 and continued throughout the duration of the war! Here are the data on federal spending, straight from the BEA:

1932 2.2% - 1933 1.3%
1933 23.7% - 1934 10.8%
1934 34.2% - 1935 8.9%
1935 1.7% - 1936 13.0%
1936 51.0% - 1937 5.7%
1937 -10.0% - 1938 -3.4%
1938 10.4% - 1939 8.1%
1939 7.2% - 1940 8.8%
1940 12.0% - 1941 17.1%

You should pick your sources with better thought to transparency and objectivity. Please don't give me this pre-processed BS from right-wing think tanks whose business it is to contort data to their ideological ends.

James wrote:If the government really could just churn out a whole bunch of money to create jobs (needed or not) it really would address unemployment. But that's a lolli-pop land dream.


We're not talking about monetary policy, we're talking about fiscal policy. The Treasury is not 'churning out money' or in any other way affecting money supply - that's not its job, and that's not what it does when it undertakes stimulus - you know that (or should)!

James wrote:First, to hire the population, very universal jobs must be created (the war did this). Second, there must be many of them (not going to happen without genuine need for the functions of those jobs; the war did this). Third, the bureaucracy must have direction, purpose, understanding (i.e., it must be motivated to focus that money on specific tasks or objectives so the money is not wasted or whiled away; the war did this).


The New Deal did the latter two, and I'm not sure why the first is necessary. You yourself said that small businesses are the primary generators of new jobs - why cannot local projects also do the same?

James wrote:It produced great economic programs—and many terrible ones as well.


That wasn't your original claim.
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Re: The Great Depression...causes and consequences

Unread postby Objectivist » Mon Apr 12, 2010 8:21 pm

WeiWenDi wrote:Hoover was not strictly laissez-faire; certainly not to the same extent Coolidge or Harding and his Ohio Gang were. His policies were largely protectionist; he shared some similarities with the earlier American School - but he was certainly a 'small-government' type who didn't believe the government should involve itself overly much in combating the Depression


Your assessment is uninformed. Hoover was nowhere near laissez faire. I'm not sure where you come up with the concept that Hoover was a small government type. Hoover fully believed in government intervention to support incomes and employment. He massively increased taxes and spending.

Hoover, not Roosevelt, is who initiated piling up big deficits to support huge public-works projects. After declining or holding steady through most of the 1920s, federal spending soared between 1929 and 1932 -- increasing by more than 50%, the biggest increase in federal spending ever recorded during peacetime.

Public projects by Hoover include...

-the San Francisco Bay Bridge
-the Los Angeles Aqueduct
-Hoover Dam

Hoover won praise from the American Federation of Labor for his industrial policy, which included jawboning business leaders to refrain from cutting wages as the economy fell. In reference to counteracting the business cycle and propping up wages, Hoover said: "No president before has ever believed that there was a government responsibility in such cases . . . we had to pioneer a new field." Though he did not coin the phrase, Hoover championed many of the basic ideas -- such as central planning and control of the economy -- that came to be known as the New Deal.

FDR did not pave a new path when he became president. He simply continued and expanded on the policies started by Hoover.

WeiWenDi wrote:FDR generally followed in that mould for the first six years of his own presidency, believing in limited, indirect intervention of government in the economy and the encouragement of business through voluntarism.


This is ridiculous...nowhere near the truth. It sounds like something a fantasy land liberal would make up. When I read a statement like this, I can't help but immediately become discouraged from bothering to engange in conversation with you.

FDR massively increased spending and taxes...he created the following government programs (which you somehow consider limited, indirect intervention)...

-Reconstruction Finance Corporation (RFC) a Hoover agency expanded under Jesse Holman Jones to make large loans to big business. Ended in 1954.

-Federal Emergency Relief Administration (FERA) a Hoover program to create unskilled jobs for relief; replaced by WPA in 1935.

-United States bank holiday, 1933: closed all banks until they became certified by federal reviewers

-Abandonment of gold standard, 1933: gold reserves no longer backed currency; still exists

-Civilian Conservation Corps (CCC), 1933-1942: employed young men to perform unskilled work in rural areas; under United States Army supervision; separate program for Native Americans

-Tennessee Valley Authority (TVA), 1933: effort to modernize very poor region (most of Tennessee), centered on dams that generated electricity on the Tennessee River; still exists

-Agricultural Adjustment Act (AAA), 1933: raised farm prices by cutting total farm output of major crops and livestock; replaced by a new AAA.

-National Industrial Recovery Act (NIRA), 1933: industries set up codes to reduce unfair competition, raise wages and prices; ended 1935.

-Public Works Administration (PWA), 1933: built large public works projects; used private contractors (did not directly hire unemployed). Ended 1938.

-Federal Deposit Insurance Corporation (FDIC) / Glass-Steagall Act: insures deposits in banks in order to restore public confidence in banks; still exists (although the Glass-Steagall Act was repealed in 1999)

-Securities Act of 1933, created the SEC, 1933: codified standards for sale and purchase of stock, required awareness of investments to be accurately disclosed; still exists

-Civil Works Administration (CWA), 1933-34: provided temporary jobs to millions of unemployed

-Indian Reorganization Act, 1934: moved away from assimilation

-Social Security Act (SSA), 1935: provided financial assistance to: elderly, handicapped, paid for by employee and employer payroll contributions; required 7 years contributions, so first payouts were in 1942; still exists

-Works Progress Administration (WPA), 1935: a national labor program for more than 2 million unemployed; created useful construction work for unskilled men; also sewing projects for women and arts projects for unemployed artists, musicians and writers; ended 1943.

-National Labor Relations Act (NLRA) / Wagner Act, 1935: set up National Labor Relations Board to supervise labor-management relations; In the 1930s, it strongly favored labor unions. Modified by the Taft-Hartley Act (1947); still exists

-Judicial Reorganization Bill, 1937: gave the President power to appoint a new Supreme Court judge for every judge 70 years or older; failed to pass Congress

-Federal Crop Insurance Corporation (FCIC), 1938: Insures crops and livestock against loss of production or revenue. Was restructured during the creation of the Risk Management Agency in 1996 but continues to exist.

-Surplus Commodities Program (1936).Fair Labor Standards Act 1938: established a maximum normal work week of 40 hours and a minimum wage of 40 cents/hour and outlawed most forms of child labor; still exists

-Rural Electrification Administration, (REA) still exists.

-Resettlement Administration (RA), Resettled poor tenant farmers; replaced by Farm Security Administration in 1935.

-Farm Security Administration (FSA), Helped poor farmers by a variety of economic and educational programs

Saying FDR believed in limited, indirect government intervention in the economy...is the exact opposite of the truth. I have to question your motive...because you are clearly not educated on FDR or Hoover's policies.

WeiWenDi wrote:Again, it wasn't until '37-'38 that FDR began the Keynesian experiment in earnest and the New Deal projects started really showing returns


Unemployment was at 15% in 1940. Between 1933 and 1939 federal expenses tripled. The United States went back into recession again in 1945...GDP dropped 12.7% and again from 1948-49.
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Re: The Great Depression...causes and consequences

Unread postby James » Mon Apr 12, 2010 8:36 pm

WeiWenDi wrote:I did - after seeing Shlaes on TDS. I was disappointed by its highly anecdotal approach and its ideological distortions of the data, particularly with regard to temporary employment statistics.

I'm not surprised to see that you'd be upset about the book if you're such a fan of this type of economics. I guess in order for someone to support something it goes without saying that they'd be opposed to an argument to the contrary. Explain the 'temporary employment statistics' observation?

WeiWenDi wrote:Maybe it's just old-fashioned of me, but I prefer the authorities and sources and (dare I say it?) experts I trust to have relevant experience and credentials - in that order. One of the most disappointing things I find about modern society is how little weight either of those receive anymore in comparison with pop-star appeal and self-promotion. Probably won't be long before I start yelling at the damn kids to get off my lawn, but so it goes.

Overlooking your scathing sarcasm, history is by far one of the most important tools we have for evaluating economy, and that is one of my points. That economists themselves are so strongly divided between such drastically different economic models is proof enough that the label cannot be used as the sole means of determining a position's value.

WeiWenDi wrote:Oh, now there's a technical explanation! And again I'm surprised by your lack of familiarity with how the New Deal worked in practice - both early on and after funding was re-introduced in 1938 - the idea was to stimulate the demand side of the economy by supporting consumers directly. The government couldn't and didn't do much by these standards early on (for the reasons I gave earlier), but that's hardly a refutation of the theory itself.

The idea is not so as important as the result. The intention, however good, is not so important as the result.

And we disagree on the whole 'how the New Deal[s] worked' thing in that you think they worked and I think they didn't. Your observation above is that I'm unfamiliar because I disagree with your analysis of how it worked? I agree with you in that you're describing how it was intended to work, but it didn't. That almost comes out reading as if I'm unfamiliar with the subject because I disagree with you...

WeiWenDi wrote:You can't be serious about that statement, unless you're of the opinion that households and consumers are unable to make microeconomic decisions. After all, the entire point of Keynesian stimulus is to put money into the hands of consumers.

A) Probably back off the whole interpreting my posts as black and white thing? I like the idea of supporting people and the private sector. I also like doing so efficiently.
B) I don't think it does that well at all.

WeiWenDi wrote:[RAGE! RAGE! RAGE!]

1932 2.2% - 1933 1.3%
1933 23.7% - 1934 10.8%
1934 34.2% - 1935 8.9%
1935 1.7% - 1936 13.0%
1936 51.0% - 1937 5.7%
1937 -10.0% - 1938 -3.4%
1938 10.4% - 1939 8.1%
1939 7.2% - 1940 8.8%
1940 12.0% - 1941 17.1%

These are not unemployment rates. These are variations in unemployment data (a negative unemployment rate would be cool). And without really looking at these numbers I'm not seeing a whole lot of negatives in there. I'll overlook your rather vicious characterization of me as a right-wing tool and post some numbers which I found to be consistent across a few sources rather than hoping the first image I got was accurate because the bumps were close to what I recalled.

Image
* Bureau of Labor Statistics

WeiWenDi wrote:
James wrote:If the government really could just churn out a whole bunch of money to create jobs (needed or not) it really would address unemployment. But that's a lolli-pop land dream.

We're not talking about monetary policy, we're talking about fiscal policy. The Treasury is not 'churning out money' or in any other way affecting money supply - that's not its job, and that's not what it does when it undertakes stimulus - you know that (or should)!

Please give me some credit. I'm not talking about creating money here. I'm talking about huge government spending in the name of fixing the economy and its results. Spending, not creating.

WeiWenDi wrote:The New Deal did the latter two, and I'm not sure why the first is necessary. You yourself said that small businesses are the primary generators of new jobs - why cannot local projects also do the same?

#1: It is necessary. If you want to make sweeping adjustments to the population through creation of jobs those jobs must be universal enough as to be accessible to the general population (e.g. if you create a whole bunch of energy and construction jobs you're not going to employ people outside those fields, or generally speaking, those unfamiliar with them). (And please don't snipe at me for not creating a longer list in that example—I could have).
#2: The New Deals created jobs, but not enough to create the change necessary to end the depression, and certainly not enough to counter-act the fallout in other areas (e.g. private sector).
#3: The New Deal did not achieve this. Unfortunately, like other big government spending, it is largely wasteful. Our government has rarely ever been efficient when spending money—most governments of a sort similar to ours rarely ever are. The War was an exception to this rule in that it provided clear focus and efficient direction for expenditure of resources. (And for what it's worth, my complaint and observation here largely applies to spending today).

WeiWenDi wrote:That wasn't your original claim.

Uh... at what point did I say that FDR's programs achieved no good?
I said the New Deals were not the thing that ended the Great Depression—that the credit for this lies largely with the war. Again, avoid the black and white, please. It is possible to have brilliant and horrible programs, achieve good here and bad there, and still fail to meet a specific objective.
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Re: The Great Depression...causes and consequences

Unread postby Shikanosuke » Mon Apr 12, 2010 9:28 pm

James wrote:Uh... at what point did I say that FDR's programs achieved no good?[/quote

The government spending through the Great Depression may have been the single strongest factor that drew the accursed thing out. Almost nothing through that spending (and it wasn't just toward the end that FDR shifted his views—he just became more aggressive) resulted in worthwhile improvements.


True, you did say 'almost', but most people would draw that from an inference that most of it was bad. I guess technically you could be right, so long as FDR's programs made 1 good contribution, and 99999 bad ones. But I think that is why both Wei and I immediately came to same conclusion on this statement.
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Re: The Great Depression...causes and consequences

Unread postby James » Mon Apr 12, 2010 9:38 pm

Shikanosuke wrote:True, you did say 'almost', but most people would draw that from an inference that most of it was bad. I guess technically you could be right, so long as FDR's programs made 1 good contribution, and 99999 bad ones. But I think that is why both Wei and I immediately came to same conclusion on this statement.

My wording there was poor and rushed. I may have decided on a different approach to my point somewhere in that paragraph without adequately correcting it—or I just plain wrote a bone-headed second sentence. "The government spending through the Great Depression may have been the single strongest factor that drew the accursed thing out. I would even say that, overall, FDR's economic programs and approach failed to positively impact the economy during the Great Depression," might better express my views. I might even go so far as to say that FDR's economic programs (despite actually liking the guy) collectively caused more harm than good over the span of history.
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Re: The Great Depression...causes and consequences

Unread postby James » Mon Apr 12, 2010 9:54 pm

Objectivist wrote:
WeiWenDi wrote:Hoover was not strictly laissez-faire; certainly not to the same extent Coolidge or Harding and his Ohio Gang were. [...]

Hoover was nowhere near laissez faire. [...]

Sidenote. Hoover was not laissez-faire. In fact, he described laissez-faire economics as "theoretic and emotional" in his book, American Individualism (1922).
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