To: Yosemitest
You managed to repeat in your post #85 an argument from the very same that book that I had just cited in post #84, without having any clue that you had done it.
That’s an achievement rarely accomplished by anyone, particularly when the book quoted argues against their own case. Congratulations.
Either you don’t read (likely) or you don’t understand a word of what you do read (even more likely).
Anyone else would be slowed down after having pulled a stunt like yours, but you’re a trooper who has filled his noggin with the finest of conspiracy junk and you’re eager to share it. I’ll get the tin foil out and wade in!
110 posted on
09/22/2019 11:24:28 PM PDT by
Pelham
(Secure Voter ID. Mexico has it, because unlike us they take voting seriously)
To: Pelham
You REFUSE TO ACKNOWLEDGE the FACTS that in
Comment #85, Julie Borowski RIPPED Friedman APART with her REBUTTAL.
Lets AGAIN REVIEW the WHOLE POINT
IN CONTEXT !3. The Federal Reserves Tight Monetary Policy Caused the Great Depression.
Federal Reserve Chairman Ben Bernanke and the late Nobel Prize-winning economist Milton Friedman blame the Federal Reserve for the Great Depression.
But they do so for the wrong reasons.
While Milton Friedman was correct on many economic issues, he was wrong on monetary policy.
He was a monetarist who incorrectly believed that the money supply determines the level of economic activity.
In his view, an increase in the money supply will lead to more economic activity.
In A Monetary History of the United States, Friedman argued that the economy was strong in the 1920s until the year 1929 when a typical economic downturn occurred.
He believed that the economic recession turned into a depression because the Federal Reserve did not print enough money between 1930 and 1933.
Friedman and Ben Bernanke essentially blame the Great Depression on the Federal Reserves failure to inflate the money supply.
The real problem is that the Federal Reserve inflated the money supply in the 1920s.
Inflationary booms induce widespread malinvestment -- bad investment decisions made under the influence of easy money and credit.
Malinvestments inevitably lead to wasted capital and economic losses.
An economic recession is actually necessary to correct all of the previous malinvestment.
At Milton Friedmans ninetieth birthday party in 2002, Ben Bernanke even said I would like to say to Milton and Anna: Regarding the Great Depression. Youre right, we did it.
Were very sorry.
But thanks to you, we wont do it again.
He spoke too soon.
The current economic situation may not be as severe as the Great Depression though economists such as Peter Schiff say it could get as bad.
But it's clear that the central bank was the main culprit in both financial crises.
The Federal Reserves expansionary monetary policy in the 1920s caused the Great Depression,not the central banks tight monetary policy in the early 1930s.
Did you 'get that', or will your PRIDE NOT ALLOW YOU to acknowledge the truth ?
I will REPEAT the truth for you again !
The real problem is that the Federal Reserve inflated the money supply in the 1920s.
Inflationary booms induce widespread malinvestment -- bad investment decisions made under the influence of easy money and credit.
Malinvestments inevitably lead to wasted capital and economic losses.
An economic recession is actually necessary to correct all of the previous malinvestment.
... But it's clear that the central bank was the main culprit in both financial crises.
The Federal Reserves expansionary monetary policy in the 1920s caused the Great Depression,not the central banks tight monetary policy in the early 1930s.
Then again in
Comment #98 Don Watkins shot Friedman's THEORIES full of holes.
3. Hoovers high wage policy
The net result of the bank failures and the check tax was a credit-driven deflation the likes of which the U.S. had never seen.
As Milton Friedman and Anna Schwartz explain in their landmark Monetary History of the United States:
The contraction from 1929 to 1933 was by far the most severe business-cycle contraction during the near-century of U.S. history we cover,
and it may well have been the most severe in the whole of U.S. history. . . .
U.S. net national product in constant prices fell by more than one-third. . . .
From the cyclical peak in August 1929 to the cyclical trough in March 1933, the stock of money fell by over a third.
Why is a deflationary contraction so devastating ?
A major reason is because prices dont adjust uniformly and automatically, which can lead to what scholars call economic dis-coordination.
In particular, if wages dont fall in line with other prices, this effectively raises the cost of labor, leading to among other damaging consequences unemployment.
And during the Great Depression, although most prices fell sharply, wage rates did not.
One explanation is that wages are what economists call sticky downward: people dont like seeing the number on their paychecks go down, regardless of whether economists are assuring them that their purchasing power wont change.
The idea of sticky prices is somewhat controversial, however in earlier downturns, after all, wages fell substantially, limiting unemployment.
What is certainly true is that government intervention kept wages from falling particularly the actions of President Hoover and, later, President Roosevelt.
Hoover believed in what was called the high wage doctrine, a popular notion in the early part of the 20th century.
The high wage doctrine said that keeping wages high helped cure economic downturns by putting money into the pockets of workers who would spend that money, thereby stimulating the economy.
When the Depression hit and prices began falling, Hoover urged business leaders not to cut wages.
And the evidence suggests that they listened(whether at Hoovers urging or simply because they too accepted the high wage doctrine).
According to economists John Taylor and George Selgin:
Average hourly nominal wage rates paid to 25 manufacturing industries were 59.3 cents in October 1929, and 59.5 cents by April 1930.
Wage rates had fallen only to 59.1 cents by September 1930, despite substantially reduced output prices and profits.
Compare this to the 20 percent decline in nominal wage rates during the 1920-21 depression.
During the first year of the Great Depression the average wage rate fell less than four-tenths of one percent.
Hoover would go on to put teeth into his request for high wages, signing into law the Davis-Bacon Act in 1931 and the Norris-LaGuardia Act of 1932, both of which used government power to prop up wages.
FDR would later go on to implement policies motivated by the high wage doctrine, including the 1933 National Industrial Recovery Act, the 1935 National Labor Relations Act, and the 1938 Fair Labor Standards Act.
The problem is that the high wage doctrine was false propping up wages only meant that labor became increasingly expensive at the same time that demand for labor was falling.
The result was mass unemployment.
Remember:
Hear now this, O foolish people, and without understanding; which have eyes, and see not; which have ears, and hear not ...
112 posted on
09/23/2019 12:22:08 PM PDT by
Yosemitest
(It's SIMPLE ! ... Fight, ... or Die !)
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