The Myth of Wartime Prosperity

The American Connservative ^ | July 10, 2012 | Robert P. Murphy

[arthurus]

When pressed for a “success story” of their policies, Keynesians point with pride to World War II. They claim that it is the perfect illustration of the ability of massive government spending to lift an economy out of the doldrums.

In the effort to battle this myth, Steve Horwitz and Michael J. McPhillips offer an interesting new article that analyzes diaries, newspapers, and other primary source documents from the wartime era. They show that average Americans on the home front certainly did not think they were living amidst a great economic recovery. Yet as I’ll show in this article—relying on the pioneering efforts of Robert Higgs—we can use even the official statistics to turn the conventional Keynesian account on its head.

[arthurus]

Yeah, it was full employment depression. It was followed by the post war recession that didn’t improve until Eisenhower dismantled an encyclopedia of regulations on business and rationalized government. I never thought of him as a conservative until I finally read just what were the things he did.

[TXnMA]

Nothing rare about ‘em for sure...

[arthurus]

assuming the government kept its nose out of as much as possible in the economic sphere. Which it largely did (at least compared to today),

The government did not keep its nose out of the economic sphere after the war. Several years after the war the government under Eisenhower largely removed the government's nose from the economic sphere.