Roosevelt Redux: How Obama is Creating a Great Depression of His Own

This post split/merged from here.

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dblboggie wrote:Even FDR's Treasury Secretary - the key architect of FDR’s New Deal no less - said "We have tried spending money. We are spending more than we have ever spent before and it does not work." The depression in the 30's lasted years longer than our European counterparts. FDR and his policies were a disaster!

What, the Roosevelt Redux thread never happened?

You called bullshit on my numbers and I showed you where they came from, and...I don't see that you've acknowledged that they are not "fictitional."

The numbers are legit. The economy grew throughout Roosevelt's admin, EXCEPT--critically--when Morgenthau's advice was followed in 1937.

If deficit spending is bad medicine, than why did the economy start to re-tank only when it was stopped?

kronos wrote:

dblboggie wrote:Even FDR's Treasury Secretary - the key architect of FDR’s New Deal no less - said "We have tried spending money. We are spending more than we have ever spent before and it does not work." The depression in the 30's lasted years longer than our European counterparts. FDR and his policies were a disaster!

What, the Roosevelt Redux thread never happened?

You called bullshit on my numbers and I showed you where they came from, and...I don't see that you've acknowledged that they are not "fictitional."

The numbers are legit. The economy grew throughout Roosevelt's admin, EXCEPT--critically--when Morgenthau's advice was followed in 1937.

If deficit spending is bad medicine, than why did the economy start to re-tank only when it was stopped?

I'm conducting my own research on those numbers. I just cannot believe that the economy grew at rates that exceed those that saw our very lowest unemployment rates. Something has to be amiss in those numbers or there is some other thing absent here because the unemployment was real, the misery was real, the lack of production (until the war) was real.

In the meantime, we KNOW that unemployment and the subsequent misery it brought, the soup lines, the shanty towns, the whole broad swath of suffering that we KNOW was present during the Great Depression (and I have my own personal insight into this thanks to my dear departed mother who told me many things about the era). And we also KNOW that the depression in the US last much, much longer than it did for European nations. Every metric you look at (save that one seeming exception you posted) screams misery. And that was thanks to FDR's policies - directly! We have scholarly works by heavily left-wing universities (the UCLA post by Tex) that say that FDR's policies caused the length and depth of the depression.

So your figures, as fantastic as they may seem (and I will get at the bottom of that), mean absolutely nothing with unemployment as high as it was and misery as widespread as we know it was - all thanks to FDR and Henry Morgenthau Jr.

dblboggie wrote:I'm conducting my own research on those numbers.

Yet kronos provided a source and you haven't. You rarely, if ever, back up your claims and wonder why people get frustrated at your lack of your sources?

dblboggie wrote:

kronos wrote:

dblboggie wrote:Even FDR's Treasury Secretary - the key architect of FDR’s New Deal no less - said "We have tried spending money. We are spending more than we have ever spent before and it does not work." The depression in the 30's lasted years longer than our European counterparts. FDR and his policies were a disaster!

What, the Roosevelt Redux thread never happened?

You called bullshit on my numbers and I showed you where they came from, and...I don't see that you've acknowledged that they are not "fictitional."

The numbers are legit. The economy grew throughout Roosevelt's admin, EXCEPT--critically--when Morgenthau's advice was followed in 1937.

If deficit spending is bad medicine, than why did the economy start to re-tank only when it was stopped?

I'm conducting my own research on those numbers. I just cannot believe that the economy grew at rates that exceed those that saw our very lowest unemployment rates. Something has to be amiss in those numbers or there is some other thing absent here because the unemployment was real, the misery was real, the lack of production (until the war) was real.

Let me know how that goes.

In the meantime, we KNOW that unemployment and the subsequent misery it brought, the soup lines, the shanty towns, the whole broad swath of suffering that we KNOW was present during the Great Depression (and I have my own personal insight into this thanks to my dear departed mother who told me many things about the era). And we also KNOW that the depression in the US last much, much longer than it did for European nations. Every metric you look at (save that one seeming exception you posted) screams misery. And that was thanks to FDR's policies - directly! We have scholarly works by heavily left-wing universities (the UCLA post by Tex) that say that FDR's policies caused the length and depth of the depression.

So your figures, as fantastic as they may seem (and I will get at the bottom of that), mean absolutely nothing with unemployment as high as it was and misery as widespread as we know it was - all thanks to FDR and Henry Morgenthau Jr.

...I think you are completely misunderstanding my point.

I am not saying the economy was prosperous or healthy during FDR's admin. OK? I was very clear about that in my other post. The economy sucked during the FDR admin. There was unemployment. There was misery. Everyone knows this; it was a fucking Depression. I am not saying otherwise. You are attacking a straw man here.

What I am saying is, there was growth. You seem to be unable to accept this, even in the face of evidence from the BEA (which is consistent with Tex's numbers.) I suspect the reason you can't accept it is that you associate growth with some arbitrarily chosen level of prosperity. But growth itself is not any level of prosperity, it is an increase in prosperity. Growth is relative. When your starting point is one of extreme poverty, and this poverty lessens, and you are still very poor, but less poor than you were, that is growth. When unemployment falls from 25% to 14%, that is growth. 14% is terrible, but it is better than 25%, and to say that it couldn't have been growth because 14% is terrible just completely misses the point.

Some graphs from wikipedia.



See how GDP goes up after 1932? Growth.



See how unemployment goes down from about 1933 to 1937? Growth.



Is the economy "good" at any point in the 1930s? No. But is it getting better? Yes. That is all growth is. When the GDP goes up, that is growth. When unemployment goes down, that is growth. Growth has nothing to do with being above a certain GDP level, or below a certain unemployment level. Those are static, absolute properties; growth is dynamic and relative. There was enormous growth (upward movement of GDP, downward movement of unemployment) under FDR's admin. But because GDP was so low to begin with (in 1932), and unemployment was so high, this rapidly improving economy was still terrible.

Note that the growth starting in 1933 occurred after the largest tax increase in history (in 1932), and had been plummeting for three years straight before that.

Note also that in 1929 and throughout the three-year swan dive toward 25% unemployment, taxes were lower than they have been at any point in history since then.

Under your paradigm, Hoover's massive tax hike should have kicked the swan dive into overdrive and crushed any hope of recovery. But in fact, the contraction stopped in 1933, and growth then resumed.

Finally, note that in 1937, Morgenthau's advice was followed and spending was cut. You can see what happened to the economy at that point. To be fair, the Fed also hiked interest rates at that time. This may have contributed to the reversal.

I'm afraid the timeline of the Great Depression is not friendly toward your economic model. At the very least, it leaves you a lot to explain. Why did the economy tank when taxes were low? Why did it improve when taxes and spending were both increased? Why did it start to tank again when spending was cut? And why did it begin to improve again when spending was increased again?