Posted on 11/30/2008 10:28:49 PM PST by neverdem
WASHINGTON -- Early in what became the Great Depression, John Maynard Keynes was asked if anything similar had ever happened. "Yes," he replied, "it was called the Dark Ages and it lasted 400 years." It did take 25 years, until November 1954, for the Dow to return to the peak it reached in September 1929. So caution is sensible concerning calls for a new New Deal.
The assumption is that the New Deal vanquished the Depression. Intelligent, informed people differ about why the Depression lasted so...
--snip--
In "The Forgotten Man: A New History of the Great Depression," Amity Shlaes of the Council on Foreign Relations and Bloomberg News argues that government policies, beyond the Federal Reserve's tight money, deepened and prolonged the Depression...
--snip--
Furthermore, Hoover's 1932 increase in the top income tax rate, from 25 percent to 63 percent, was unhelpful. And FDR's hyperkinetic New Deal created uncertainties that paralyzed private-sector decision-making. Which sounds familiar.
Bear Stearns? Broker a merger. Lehman Brothers? Death sentence. The $700 billion is for cleaning up toxic assets? Maybe not. Writes Russell Roberts of George Mason University:
"By acting without rhyme or reason, politicians have destroyed the rules of the game. There is no reason to invest, no reason to take risk, no reason to be prudent, no reason to look for buyers if your firm is failing. Everything is up in the air and as a result, the only prudent policy is to wait and see what the government will do next. The frenetic efforts of FDR had the same impact: Net investment was negative through much of the 1930s."
--snip--
Here we go again? A new New Deal would vindicate pessimists who say that history is not one damn thing after another, it is the same damn thing over and over.
(Excerpt) Read more at realclearpolitics.com ...
Hoover was president only until 1933. FDR was president in 1939.
Quit printing funny money and get the depression under way!!!!
well they will say they won’t raise the top tax rate to 63%. Just spend a lot of money.
The New Deal just prolonged the Depression.
WWII got us out of it.
“well they will say they won’t raise the top tax rate to 63%. Just spend a lot of money.”
Which will result in the economic equivalent of raising the top tax rate...and the middle tax rate, and the lower tax rate.
Other than George Will, I would like to here from Walter Williams and Thomas Sowell on the issues.
WWII only solved the unemployment problem. GDP didn't begin to grow again until well into the Truman administration. The war GDP numbers are fiction (most prices were fixed by the government). What really ended the depression was the death of FDR, the dismissal of his economic team, and the electoral recovery of the Republican party.
When I read that sentence, I thought the same thing you did. But Gerge Will put in the “ — “ meaning that we should skip from the “..federal spending” to the end of the sentence. The words between the two “—” is an insert.
You are correct that FDR was president in 1939.
ping
Actually the depression is a bit complicated. Raising taxes and cutting off trade definitely prolonged the depression, but few people understand the importance of pyschology.
The generation that came out of the great depression was basically a nation of spendthrifts. Economic risk-taking was way down and entrepeneurship was at abysmally low levels. Victory in WWII restored confidence, launched the baby boom, and created a huge boom in entrepeneurship and spending.
Another recent case of where pyschology matters is in Japan where the government has done everything possible to try and keep the economy going strong. Japanese people simply are too risk averse and spend too little and are not very entrepeneurial as well.
When government grows, it crowds out civic society, and substitutes the decisions previously made by consumers and job-creators by those of the government. George Will is right, the spending of the Democratic congress is going to piss off the fiscally conservative nature of America and do little in the way of keeping our economy afloat. What remains to be seen is if the democrats will use that spending to create enough dependent interest groups so that they have a permanent majority and drag us down into the terrible mediocrity of Europe.
I pray to god that does not happen.
Case-in-point, look at Japan. From being a country that was going to overtake us by now they’ve had over a decade of lost growth. What happened? The Japanese consumer simply does not spend enough
I personally don't give a damn about you think anymore...
The Odd Story of Romance in Dreams from my Father
Kennedy Traps Feingold A Second Amendment moldy oldy
Some noteworthy articles about politics, foreign and military affairs, IMHO, FReepmail me if you want on or off my list.
Pretty much how I see him.
LLS
I agree, george is a ___!
Thanks for the ping!
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