Tom Usher wrote or added
"...the New Deal was on the rocks." The New Deal was on the rocks because FDR had mistakenly listened to deficit hawks. When he reverted, growth started up again — fact.
I say that not as an FDR fan. I see plenty wrong in what he did. What I don't go for is conveniently massaging the historical facts for ideological sake, which is the pattern of behavior on the part of the Ludwig von Mises Institute.
Scott Horton: Not "fact." Or at least not enough of the whole truth to have the meaning you impart to it. All the borrowing, creating and spending money before '37 had done nothing to stimulate anything. The rise in GDP was just a number, like when Obama's census fires and rehires people over and over again and calls it "job creation." If they were wrong to cut back in '37, it only proves they were never right to start all the deficit spending in the first place, as it was only delaying the correction in prices that was due. When he borrowed and printed even more to make a war machine, you can call it growth if you want, but I don't. It was just another and greater diversion of useful purposes to useless ones. But the govt.'s GDP number went up! If Obama and Congress cut back next year and prices fall, will you say he "mistakenly listened to deficit hawks."?
Scott Horton: Sorry, should have read "greater diversion of *resources from* useful purposes to useless ones"
Scott Horton: And Flynn and Garrett both predate the Mises Institute by quite a few decades.
Evin Olson: God damn the Roosevelts are pieces of shit and reason enough to found a new country out of the one they burnt to ashes; or just throw the ashes into the wind and let the people be free.
It seems unjust that the generations that restrained the state's corpus don't get to feel the pain of the rape.
Jay Hailey: Tom Usher's comment does raise a point - The GDP or whatever tjhey were using to measure productivity did go up. But the measure they used falsley claims thinkings like tanks, bombers and warships as the same sorts of things as cars, farm equipment or production machinery.
So by the government's measure - when it taxed people and then spent to money on weapons intended solely to break things and kill people, it looks like economic growth.
In fact, taxing the working folks to buy a B-17 is doubly a negative, possibly even a triple negative. The money the people were taxed has the invisible opportunity cost for whatever they would have bought of their own free will.
Then the government spending that money on the B-17 has another cost because the money mightb have been spent on something with an economic positive, like a railroad locomotive or a cargo airplane.
Then the damage the plane did to it's target costs the opportunity off whatever those Japanese or German people would have done of THIER free will, as well as the money rebuilding the buildings and equipment destroyed by the bombing.
So calling the B-17 in question a positive asset on the national books is delusional.
But the government is forever massaging the numbers it reports in order to look better.
So we need an independent measure of societal economic growth and purchasing power, to apply across all the places of the 20th century where the government kept moving the goal posts around.
But it would take someone with actual skills of scholarship and analysis to build that idea. I am just some looud mmouth on the internets.
Jay Hailey: Oh, and Tom Usher - You're wrong - FACT. I don't have to support that assertion or provide any proof, because I used all caps and that makes my asserrtion more credible than you. Neener.
Scott Horton: Jay, Bob Higgs did the work for you:
Jay Hailey: Thank you. I may return to work shortly. I am mostly backed up on Books you recommended on foreign policy. Sorrows of Empire, Blowback and so on.
Darren Wolfe: An Economy On Life Support Is Not Recovering
Published: January 20, 2009
The myth that the New Deal lead to recovery persists. Here is a debunking in layman's terms.
Recovery Depends on Investment and Capital Accumulation
Published: January 27, 2009
This article gives the argument that the New deal didn't end the Great Depression some in depth clarification.
I must admit, Jay, you made me laugh (not at you but with you). Usually I think levity (and subtle sarcasm?) is misplaced concerning such subject matter, but it does have its place. However, I believe you meant to say that your assertion is more credible than my assertion rather then more credible than I am as a person. Perhaps the distinction doesn't matter to you, but it does to me. I won't belabor the point though.
Well, just so long as we all realize here that we are none of us old enough to have been there but we can be sure that we are resting our various positions upon the so-called data of others, along with their interpretations of same. That includes the Mises Institute relying upon those who went before.
Scott wrote, "All the borrowing, creating and spending money before '37 had done nothing to stimulate anything." That's contested.
Unemployment went down and that's not even including those who were employed by the government. The anti-New Dealers refused to include government jobs as, well, jobs or employment, as if all the current government workers really aren't employed and will only ever really be employed when they go to work for what is commonly referred to as the private sector. Now, please don't be over stringent with me here by citing a small exception where some data used by laissez-faire capitalists shows government workers in the employment statistics. I'm speaking in broad, general terms here. I could dig out the favorite Keynesian numbers to be as exact as possible in their view, but the overall point wouldn't change.
Let me say this though about your observation on War Department spending. It was what is called military Keynesianism, and I hate the military part of it. Military spending is truly not as productive in the mundanely understood economic sense as is making things that go into more building rather than destroying. So, I don't dismiss your comment entirely but do say that it doesn't make sense to claim that the spending and manufacturing, etc., wasn't a kind of growth, albeit evil – you might rightly say "cancerous": a true negative, a liability in the moral sense for sure. However, it's difficult to converse with a large, uneducated group on such matters, without some ground work. I know you are anti-war, Scott. So I'm looking at your use of connotations in that light and not completely disagreeing with all of them but only some.
The truth of the matter is that government employment could be put to other than military purposes with vastly better results. The issue here, of course, concerns forced taxation and other aspects of life that are coerced. That must be viewed against a robber-baron class that would otherwise exist with or without the Republic. So what are we left with, name your poison? I prefer unselfish, voluntary cooperation to so-called rugged, competitive individualism. Christ calls us to service, and the invisible hand of Adam Smith in terms of capitalistic pricing just doesn't fit with it. You all may not be professing Christians, but I can't speak for myself from any other position and be true or real. I've done the "devil's advocate" thing and found it wanting even before I experienced my Christian revelation.
Are you fellows contending that the second uptick didn't happen until war production started? What year did the military spending surge, or are you including Lend-Lease in '41, Arsenal of Democracy ('40), which I wouldn't say is improper of you to do at all. It's my understanding that the uptick from reversing the deficit-hawk decision started before, but I'm open to being further enlightened on the subject.
I've been given to understand from James Galbraith that the estimated unemployment reached 25% not including farm labor and that, that figure fell to around 10% before the war when government employees are factored in.
My impression is that anti-government capitalists are reluctant to see monopoly outside of government as an evil. Now, I've heard Rockefeller quoted as saying that competition is evil, and in a Christian sense, it is; however, I doubt very seriously that he was thinking in a Christlike manner when he was faulting competition to his private empire.
So, I put forth these things to you hear not in a spirit of hostility but honest best-effort statements and for purposes of inquiry.
Let me finalize this one comment by saying that what I do like about FDR is his anti-bankster attitude, although I don't think he was willing to do the trust busting that was necessary within the mundane mixed economy that was America and still is. I know he was a mixed bag, so to speak – conflicted. I have yet to hear a politician who wasn't, or still isn't, and that includes all the libertarians I've heard and read (and I haven't shied away from that but also haven't devoured everything as a disciple, since I find it quite anti-Christ). He was up against deep pockets much as Goldman Sachs has deep pockets now. He had a few William Black types around him, so he didn't stand completely alone. Are you "fans" of Bill Black in terms of financial regulation of the banksters? I find him the best voice going right now on the subject. I hope you aren't of the mind that "capitalists" can do no wrong. I know that many attempt to elevated to the status of Christianity, but "externalities" give them away, sort of how the oil leaks in the Gulf is giving away BP.
Oh, by the way, all the "recessions" before the New Deal regulations were worse than after it, until after the deregulation wave starting with Ronald Reagan and culminating with George W. Bush, which wave led directly to the current "Great Recession."
You guys do know who Brooksley Born is, right? She was right but opposed by anti-regulator so-called regulators. I realize you all probably aren't monetarists, so I won't hold you to all that goes with monetarism.
Hey, Darren, Keynesianism doesn't require that spending be on unproductive things. I repeatedly said that it isn't government spending that has been the problem but where the money was spent (bailouts and deliberately nonproductive "stimulus"). If you think that government contracts for road construction for non-toll/public roads is not conducive to non-governmental growth, you're failing to connect some obvious dots in my view. Eisenhower's Super Highway system didn't stimulate "real" growth in your opinion? That doesn't stand up. Those highways would only have been "productive" if owned by private parties who could then have charge tolls all this time. Is that it? If so, I totally disagree.
Meant: "leaks in the Gulf are giving away BP" rather than "leaks in the Gulf is giving away BP"
Darren Wolfe: @Tom - Actually it does since it calls for govt spending. The Govt doesn't have a balance sheet to tell them whether their pet project is useful or not. They get their money by force (taxes) or borrowing. No one can withhold money to let them know that X project is not needed. A business, on the other hand, must turn a profit. If offering X is profitable they continue. If X is not profitable they stop. This is the key difference between private & govt spending.
As to the highways, the question is would they have been built privately in the absence of the govt's highway building? You seem to assume that they would have been. That's where your argument breaks down.
The govt's highway building was a driving force behind the US having the suburbs that it now has. A much less efficient way of living compared to the city. Here in the Philadelphia area, like many other urban areas, we have the declining city surrounded by the affluent suburbs. Until the great recession hit, they were building houses in the burbs while perfectly good buildings in the city were being boarded up. I've been in north Philly (very bad ghetto) you can see block after block virtually uninhabited. What a waste! & yes, the highways are a factor in this.