It will be a race war. Count on it.
Or you can get raw with these strings. Either way, the violin is sweet yet lethal.
Do it!
Posted on 08/18/2011 11:51:30 AM PDT by markomalley
I’m a bit late to commenting on Christina Romer’s Sunday op-ed on monetary policy and the Great Depression, but it makes a point that bears repeating. The story most of us know about the Great Depression, the one in which Herbert Hoover screws up but then Franklin Delano Roosevelt comes in and hires people to paint murals and repair roads and defeat Hitler and that solves the problem, is wrong, or at least incomplete. Monetary policy — Boring, hard-to-understand, no-one-likes-to-talk-about-it, increases in the money base — was really the key to getting the economy back on track.
To get even more specific, the two policies Romer identifies as being key to the recovery were FDR’s decision to sign Executive Order 6102 and Hitler’s decision to overrun Europe.
Executive Order 6102 sounds pretty bizarre when you explain it. Remember that in the 1930s, dollars were backed by gold. Your dollar was worth what it was worth because the American government was committed to giving you a certain amount of gold in exchange for it. In Executive Order 6102, FDR forced every American to turn in almost all of their gold at a price of about $20 an ounce. Then he said that gold would stop being worth $20 per ounce and begin being worth $33 an ounce. This meant a massive devaluation in the dollar, which sounds bad, but actually meant a huge stimulus: our exports became cheaper and more popular, which in turn meant we created jobs because we needed more people to manufacture stuff that we could export.
(Excerpt) Read more at washingtonpost.com ...
“Bush = Hoover. FDR = Obama.”
This I can except, except to say that Hoover’s inerventionism was unprecedented, whereas Bush’s was much more conventional. There may not have been anything like TARP before, but there have been decades of responding to downturns as emergencies. Hoover was the first to treat a recession as the moral and governmental equivalent of war, which renders his reputation as a do-nothing especially galling to the
“We were already in a Depression when FDR took control, and blamed said problems on the President before him.”
Yes, and especially interesting is how FDR ran on a balanced-budget platform, much like Obama ran on tax cuts. Both were either lying or changed their minds remarkably fast.
“While he prolonged the Depression, he was not the origin.”
No, and I, too, stenuously insist on Hoover’s role in making the depression special. However, it still wouldn’t have been as “Great” without FDR, and I think that’s what the previous poster was getting at. In that case it’s a confusion of origins. Perhaps we should be talking about the greatness instead of the depression.
“Unlicensed private ownership of gold in the US remained illegal until 1975.”
Sounds crazy now, doesn’t it? And to think this is precisely the sort of thing this article is applauding. That is not stimulation: it’s theft!
The federal reserve killed the 1930-31 recovery when they raised interest rates and started the depression, FDR created a hostile business environment with his policies and continued the depression.
Sad to say the Obamaloon’s going down the same path as FDR. At least the fed learned not to raise interest rates in a recession.
“Why is this so hard for people to understand?”
Because 8th grade social studies teachers and 11th grade civics teachers taught them that war is good for the economy. Most people are mis-educated about economics and never bother to understand the way the free markets work in adulthood. Rather, they retain the indoctrination they obtained in public schools.
And, why do public school teachers teach such nonsense? They not only learned this in their primary and secondary schools, but also at college. Like most people, most teachers never bother to understand the way the free markets work. Rather, they retain the indoctrination they obtained in college.
And, why do colleges teach such nonsense? One need only read the Communist Manifesto for the answer: capitalism requires an unending series of “univeral wars of devastation” to resolve capitalism’s “epidemic of over-production”.
The Communist Manifesto is an excellent source document for answering questions like yours.
Only a small minority of Marxists know that they are Marxists.
The war prematurely put about 50 million people in an earthen depression and backfilled it. A myriad of other devastations of war certainly put many more in a psychological depression. But, GDP grew, and that’s what these despicable materialists really care about.
It’s pretty easy to reduce unemployment when the government compels about 16 million men to join the armed forces over a few years out of a total population of 132 million. These 16 million suffered more than just “slave labor wages”.
GDP certainly grew by some that was all that machinery and stuffs sent to Europe and the Pacific to be destroyed. Growth in government spending = growth in GDP? Well it does to Democrats and other Keynesians, I suppose.
“when they raised interest rates and started the depression”
Raising interest rates did not, cannot, start a depression. Sounds like you’re operating under monetarist delusions.
By the way, I don’t even know if they did raise interest rates, but I’ll take your word for it. Certainly they didn’t scatter money to the winds like Helicopter Ben. Look how well that worked.
It will be a race war. Count on it.
Or you can get raw with these strings. Either way, the violin is sweet yet lethal.
Do it!
“The federal reserve killed the 1930-31 recovery when they raised interest rates and started the depression”
To clarify, the only way one could say raising interest rates would start a depression is if rates had been previously too low, with resultant overexpansion of credit and malinvestment of capital. But in that case any rational human being would say that the overexpansion and malinvestment were to blame. All keeping interest rates where they were or lower can accomplish is perpetuate malinvestment. You can’t get good wealth chasing after bad capital.
If you want to see why monetary stimulus doesn’t work, take a look at the current multi-year Era of Zero Interest. According to Friedman, Keynes, and you, the U.S. under Bernanke should be the land of milk and honey. What happened? Underestimate the perfidy of the “malefactors of great wealth” and “economic monarchists,” did we?
Yes you are right, war (in modern times) does not increase a nation’s wealth in absolute terms but war economies are necessary for survival and wealth preservation (infrastructure for example). A case might be made that in the years following WW2, the US did increase world market share and the war also lead to the dollar’s reserve status. And, of course in ancient times, war could be profitable in some cases (Rome’s conquest of Dacia, the the Levant, Alexander’s wars)
how moronic.
The end of WW2 and the end of FDR is what ended the Great Depression
how moronic.
The end of WW2 and the end of FDR is what ended the Great Depression
“FDR created the depression.”
Actually the Depression had been running full bore for two or three years prior to FDR’s election, so that idea may not quite work.
“of course in ancient times, war could be profitable in some cases”
I grant this, which is why I made a parenthetical concession to war theft.
“but war economies are necessary for survival and wealth preservation (infrastructure for example)”
This statement makes no sense to me outside of rebuilding effortts, which, obviously, aside from perhaps Hawaii had no relevance to the uninvaded or bombarded U.S. All roads, bridges, buildings, machines, etc. built for wartime production I’m sure had beneficial alternate uses, but they are susceptible to the Broken Window Fallacy.
“A case might be made that in the years following WW2, the US did increase world market share and the war also lead to the dollar’s reserve status”
This is a very indirect benefit, and has more to do with other powers, namely Britain and France, being ruined by blitzkreig from without and welfarism from within. Also, the dollar was on the road to mastery following the previous war and everyone else’s profligacy anyway. Remember all those debts no one ever paid back when we were the Lender of the World? Wasting all that money and going so far into debt cleaning up Europe and Asia’s messes didn’t exactly strengthen the dollar in an absolute manner, by the way.
As for Germany and Japan, first of all, despite the admittedly crucial aid of Amer-Anglo aerial bombardment, the former would have been beat by Russia in my opinion anyway. But even if they weren’t, and along with Japan emerged cntrolling two-thirds of the globe, why would we have had any more trouble economically besting them than we did the Soviet Juggernaut? Okay, we would have had relatively more trouble insofar as national socialism is more efficient than crazy, nutso, fruitcake, Russian socialism. Either way, though, there’s no contest.
This is yet another thing I’ll never understand about conventional wisdom. No denying the murderously anti-civilizational menace of nazism. But what did we trade it for? A worse, more murderous, more successful insanely anti-civilizational ideology. Not that we should have fought a war with them, too. Nor that we shouldn’t have fought the one we did with Germany. That’s not the point here. What I’m asking is why, in terms of purely nationalistic economic competition why do we figure we gained enough vis-a-vis trading nazism for Marxist-Leninism to make up for the gargantuan cost of war?
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