Posted on 01/17/2020 7:24:25 AM PST by Kaslin
Pres. Franklin D. Roosevelt’s New Deal was a response to a crisis in America’s economy. Stock prices were crashing, businesses were failing, and unemployment was soaring. FDR’s popularity was engendered by his ability to generate hope that there could be relief, recovery, and reform that could bring us out of our straitened circumstances, and keep us out. His policies were aggressive and his uncanny paternalistic communication skills -- such as his fireside chats on the radio -- endeared him to the masses. When he said “we have nothing to fear but fear itself,” he highlighted the deep-seated fear of tomorrow in the hearts of the citizenry.
FDR introduced “socialism-lite” into American politics and economics with the implementation of Keynesian or demand-side economics, as it is sometimes called. However, the economic theories created to justify increased governmental spending were advanced by John Maynard Keynes, a British economist who did not portray himself as a socialist. Instead of a balanced budget goal, deficit spending by government was justified by Keynes. Government expenditures were increased, which required increased borrowing of funds and increased printing of money (we went off the gold standard in 1933 which enabled greater printing of currency). The increase of the money supply led to an increased rate of inflation. With more dollars chasing fewer goods, prices rise. But this inflationary trend was offset by the multiplier effect whereby the number of economic transactions produced by the increased supply of money more than offset the inflationary problems. Government spending could thus bring about a stability in economic markets that regular supply and demand curves in a laissez-faire market could not by themselves achieve. This influx of money into the economic system is still called “priming the pump.”
(Excerpt) Read more at americanthinker.com ...
I call them Keystone Keynesians ... after the Keystone Cops
Where a Keynesian believes that economies can be managed by counter cycle spending (itself an irrational and foolish belief) a Keystone Keynesian sees only the demand or opportunity to spend more.
Bad times demand more spending.
Good times are an opportunity to spend more.
Keystone Keynesians we’re already well transitioned, though not nearly as bad as they’ve since become, when Nixon infamously said all were Keynesian now.
Since then they’ve gone from pump priming to (essentially) economic masturbation that would shock the sex fiend in Dr Sax.
Despite the delusions about economies acting rationally (rather than be the sum of disparate unpredictable activity) economics is still fundamentally about humanity and for Keynes to get the philosophy so wrong that he could not recognize that those in government would eventually, inexorably, only hear the demand to spend, to grow government, dependence on government and increase their power represents a complete failure of his ideas ... enough that they should be thrown on the ash heap of history never to be revisited except as a cautionary tale.
Were ... not we’re ... damned autocorrect!
And unemployment in 1939 was the same or higher than it was in 1929. This, in spite of billions(today probably 1-2 trillion dollars) spent.
WWII was Roosevelt’s only way out of the Great Depression.
When gub’mit spending is such a large percentage of the GDP, Keynes can’t even begin to prime the pump, especially with such totally useless public trough projects that have no positive effects.
At least some of the WPA/CCC projects are still around.
Roosevelt was forced out of the New Deal by WW2. Ending the New Deal was the first step to ending the Depression.
That makes utterly no sense. Increasing the money supply does not increase the quantity of goods and services available. Inasmuch as the economy is based on the production of goods and services, the number of transactions cannot rise unless production rises, regardless of the quantity of money transferred in each transaction. Furthermore, inflation, regardless of how it is dressed up, is devastating to those on fixed incomes, who watch their spending power decrease without being able to do a thing about it.
The New Deal
The Great Society
The Iran Deal
With Bernie on the parapets
and OAC in the wings
Yes.. A proud history of Progre$$ivism indeed..
and the future looks bright..
under the glow of candlelight.
One of the major reasons he had for slow-walking the U.S. into it... To assure the socialists several more election victories...
LINK TO ARTICLE: FDR’s policies prolonged Depression by 7 years, UCLA economists calculate
Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.
After scrutinizing Roosevelt’s record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.
“Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump,” said Ohanian, vice chair of UCLA’s Department of Economics. “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”
Obama tried to replicate Roosevelt's insanity....If a Bernie Sanders or Pocahontas gets elected, they will show how incompetent Roosevelt was and will go for a 30 year long depression.
Roosevelt’s spending policies kept the depression going for many years longer than it would have normally taken to get the economy going. what was needed was less govt spending and more tax cuts; more by the private sector.
That's a big reason why it's such a basket case.
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