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Great Myths of the Great Depression
Universidad Autónoma de Centro América ^
| 1998
| Lawrence W. Reed
Posted on 07/22/2002 3:11:50 PM PDT by AdamSelene235
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To: beavus
You're right. FDR was responsible for far more boondoggles than the author mentions. But the piece was already running a bit long, don't you think?No, I don't think the piece was anywhere near long enough. If the author wanted to attack FDR programs as boondoggles (which many if not most were, imho), he should have argued such. Instead, he just pulls out a few issues and adds some circumstantial evidence without really making a compelling case one way or the other. This article has all of the depth of a high-school textbook, without any substance behind the claims.
To: AdamSelene235
Old myths never die; they just keep showing up in college economics and political science textbooks. Actually, this hasn't been true of the great depression for 20 years. It's the english department that has kept socialism alive. The Economics department moved on a quarter century ago when it became apparent that Hayek was right instead of Keynes.
42
posted on
07/22/2002 5:16:04 PM PDT
by
tcostell
To: AdamSelene235
good post
To: liberallarry
Good point. What institutional changes would you make? It will be politically impossible to make serious changes in absence of a major crisis. Personally, I believe the very internal economic logic of the GSE's could produce such a crisis. A Fannie Mae crisis prompted by deflation or derivatives trading would simulataneously take out the bond, stock and real estate markets, for example.
The problem of money is a tricky one. I'm not a gold bug but I have been pleased at the recent emergence of electronic gold. The fiat system is lunacy. The government is the largest and most irresponsible debtor in the room, so their bias will always be towards debasing the currency. Until it is impossible, that is. Then you've really got your tit caught in the wringer.
My best guess is that a deflationary environment will be the endgame for Keynesian economics. Afterwards, I'd like to see corporate taxes (in reality a regressive consumer tax), capital gain, and income taxes abolished. A National Sales tax should suffice. Restoring the nation to a Constitutional Republic from its current status as a Socialist Democracy would also be nice.
As far as currency is concerned? Since capital gains taxes would no longer punish you for not participating in the inflation, you could use any thing you please, a tri-metalic currency or one backed by a basket of equities.
To: AdamSelene235
bump for later review
To: andy_card
What ever happened to Rural Electrification, the CCC, the SEC, TVA, Social Security, etc.? Are you saying this ironically?
Social Security may very well wreck the country one day if FDR's GSE timebombs don't do so first.
To: andy_card
this hardly counts as a serious piece
Sure, my idea of serious economic research is something that I would find in the Journal of Political Economy. However, research always starts with small, non-empirical articles.
Economics is very complicated
It's not an exercise in quantum mechanics.
the author doesn't make a convincing case that...the Wagner Act were responsible for much of anything
One would be hard pressed to believe that artificially increased costs that trade unions create do not stifle growth. Existing firms may be able to bear the cost. However, new entrants may be discouraged. This certainly would be a subject for further, in-depth research.
Well pro wrestling is on at 9. I have to go.
To: tcostell
Certainly, Dr. Samuelson has been forced to make some revisions. Twenty revisions of his magnum opus, Economics, is quite an indication. I was fortunate enough to study under free-market (i.e. Chicago School) types, but Keynesian theory still abounds.
To: andy_card
No, the article has all the depth of a forum post. If you want depth, read some of the books the author references.
49
posted on
07/22/2002 5:36:46 PM PDT
by
beavus
To: AdamSelene235
Another excellent discussion of depression era economic policies can be found here:
Economics on Trial by Mark Skousen pp.102-118
To: liberallarry
No, I must have deleted it while I was inebriated. :D
Letting Nurses do some of the things Doctors do would halep the equation greatly IMHO.
Now, on to Soros. I have been somewhat of an admirer of him my entire life. The reason I say somewhat is he is something of a hypocrite.
When the South Korean currency market collapsed, he played it brilliantly and made hundreds of millions of dollars. I do not begrudge him that but he hardly helped the situation with his strategy. He rails against western capitalists who try to do the same thing though not as succesfully as he had done.
Another glimpse of Soros can be found in his supporting of the Estate Tax in the USA. He is FIRMLY for it, yet not one PENNY of his assets will ever be touched by this type of law as he has rolled all of his wealth into corporate entities and foundations upon his death.
In other words, he talks the talk but does not walk the walk. For someone to tell ME I have to submit while exemptimg themselves from the equation smacks of "elitism," or as I like to call it a "Royalist" mentality.
He is indeed a brilliant capitalist that fervantly backs Socialist causes that he DOES NOT SUPPORT himself. I guess this is where I lost respect for his moral character. Practice what you preach is what I always say. The facts are that he is really more like the Robber-Barons of the early Americas but has cloaked himself in Leftist dogma.
On a further note, the media positively ADORES Soros and people like Warren BUffet who act just like any other Capitalist but speak against Capitalism in public. I might add, although I am a small business man and not even CLOSE to thier league, I would NEVER do some of the things they have done. Yet, because I am "Right-Wing," and wear that label proudly, I am the bad guy. They of course, are the good guys because they preach the evils of Capitalism.
I would classify them both as Mercantilists... maybe not Buffet but Soros DEFINATELY!
Perhaps the right-wing philosophy is wrong. I am speaking philosophically here, you obviously know I subscribe to said philosophy. Yet, EVERY historical example of my type of thinking (American Right Wing versus Euro Right-Left Wing thinking.) has proven more beneficial to society then the Left-Wing Ideal.
The common phrase is "It has not been done correctly," to which I say, it can NOT be done correctly because it is natural. Read the Globe article and then go to the article today on China... they actually seem to support the Socialist government before the market reforms.
The liberals have practically won the debate. Now the question seems to be thus... "George Bush increased our plans by ONLY X percent when we asked for Y percent, we MUST fight for more!".
We Conservatives are pretty flummoxed by this but I take comfort in knowing that even in the most Socialist governments, people still prefer to be Capitalistic then Socialist. Let me give you an example...
When I was in the military, we all got paid the same according to our rank. there was one INdian Sikh who was earning his citizenship(Cool, aint it?), that would stand watches for money and sew things for our squadron. They teach you to sew in Boot Camp but I always sucked at it, so I always had him sew my patches and stand watches for me. He did the same for 20% of the squadron.
He made about 500$ a week OVER his standard pay. Who are WE(As a society.) to say that he can not keep the money. The truth is that whatever the government says he would have earned it ANYWAY. That is why I say Capitalism is natural. Of course, the NAvy stepped in and stopped him from doing watches but he continued his other activities, making money and that would be a bad thing under most Socialist regimes. Maybe I should have done it! LOL!
My my, I posted to log so I must say adios now but I hope you see my point.
51
posted on
07/22/2002 5:40:07 PM PDT
by
Arioch7
To: AdamSelene235
Social Security may very well wreck the country one day if FDR's GSE timebombs don't do so first.I'm not talking about today. I'm talking about the effects in the 1930s. At the very least, I think the author might address them.
To: Arioch7
Read the final chapter of Soro's Alchemy of Finance. He basically says he has a God complex and wants to be the next Keynes. He goes on to say that it used to be a dirty secret he was ashamed of, but now, liberated by his immense wealth, he feels he can share. He chose the phrase "Theory of Reflexivity" because it sounded similar to Einstein's theory. And so on. I'd much rather read his former partner, Jim Rogers.
To: andy_card
I'm not talking about today. I'm talking about the effects in the 1930s. At the very least, I think the author might address them. Fair enough. I find it hard to praise them for not entirely destroying the country. Not that they didn't try.
Have you ever seen the Moscow subway? It was built in the early days of the USSR. Its breathtakingly beautiful. Kinda hard to ignore the ghastly structures that surround it.
Same thing.
To: Arioch7
I think you're too pessimistic about the conservative - or capitalist cause. No one every gets to win everything - which is good. The Left is constantly making the opposite complaint - that the Right is winning too much. :)
On Soros, or Buffet, or Gates or Andrew Carnegie, or a lot of other very wealthy types. Regardless of what they say they have this in common: in their business dealings they are fierce, ruthless, viscious, brilliant. So what? I'm not holding them up as Saviors. Soros writes and thinks extensively about our system. He's not just a businessman. One of the things he questions is the stability of the market - whether it really is self-correcting. I think that he's honest in his analysis. He's not saying this because it will benefit him in any monetary way. He takes pride in his analytical powers and would like to have the facts show him to be correct. So I listen very carefully when he speaks.
To: AdamSelene235
all those banks failed between 1930-1932, the federal reserve allowed it, that's why the money supply shrunk like it did.
Today, our federal reserve won't allow a 30% decline in the money supply no matter what. But consider if there are more enrons and worldcoms, corporate debt today is said to be 75% of their total value whereas in 1960 it was 40%. When equity prices decline tremendously, doesn't this put the big corps in a potential financial bind? Isn't it possible that we could have a lot of big corps go bankrupt, not just a few? at least if these negative trends keep continuing, then the whole thing could snowball out of control and cause a lot of big corporate bankruptcies.
So, in my view we could be in a period similar to 1930-1932. But instead of banks going bad, it may be large corporations. After 1930-32 we learned that the money supply must not be allowed to drop dramatically. Maybe this time we will learn that the ability to produce in america is very important to us and that we must protect it from serious decline.
To: Red Jones
Today, our federal reserve won't allow a 30% decline in the money supply no matter what. What are they going to do? Lower interest rates?
To: Red Jones
Ever wonder how you could have an economic downturn, but no decline in consumer spending?
Here's where the bubble is hiding.
Monday, July 22 2002 9:12pm ET - U.S. Markets Closed.
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To: AdamSelene235
Bump for latter, when I can read it.
To: liberallarry
I think you're too pessimistic about the conservative - or capitalist cause. The two are quite distinct. Even the Right has become intoxicated by the power of Socialism. We aren't dealing with a free market but rather a mature Socialist Mobocracy.
Soros writes and thinks extensively about our system. He's not just a businessman. One of the things he questions is the stability of the market - whether it really is self-correcting
Read it. I'll concede he writes extensively about the system.As for thought, I suppose that's what passes for deep in financial/philosophical circles. They teach that stuff in every undergrad engineering class on control theory.
And no its not stable. That's no reason to intervene. Maxim: When dealing with multi-variable nonlinear coupled systems, first do no harm. Prices communicate information, the more you mess with them, the more disinformation you feed into the system. For instance, a 900 sq. ft. condo in my area goes for 275K$. I'd say someone has really screwed up the lines of communication.
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