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Thanks for showing my point graphically. Of the 5 industrial countries shown, all "tanked" in 1930. By 1934, Italy, Germany and the UK had recovered or come close to recovering to 1930 levels. The US was still 20% under pre-1930 levels in '38, per your graph, while economies in the 3 other countries shown were not just out of a recession but growing wildly.
Thanks for showing just how bad the US economic performance was during this time frame vs. most other industrialized countries. It would be interesting to compare what the economic policies of the US and France were, vs the UK, Italy and Germany.
Mainly their decision to forgo the gold standard and start devaluing currencies.
Argentina - 1929
Brazil - 1929
Britain - 1931
U.S. - 1933
Belgium - 1935
France - 1935
That, more than anything (IMO), is what helped change people's minds about what was going to happen with their loans, savings and earnings and such. Concerns moved away from deflation and on to inflation which was far less of a concern than deflation.
Since Keynesian economics has little to do with "social equity" but rather, amongst many things, but rather macro economic growth and specifically how to stimulating a depressed economy in the midst of a deflationary cycle, which by the way is not even the sum total of Keynes economic theories. As a result, I feel rather comfortable in stating that you don't have a ****ing clue about what you are writing about.
That is utterly mendacious or just totally insane.
Nice personal attack. Ever read the TOS?
Keep drinking that kool-aid. The world bankers love that.
Really?
Care to explain the economic BOOM of WWII?
How much money did the US government pump into the economy?
What percent of the GDP did that represent?
What was the result?
You cannot stimulate an economy with money that does not exist. If we had a few trillion stored away we could release to stimulate, sure, but we do not. We lose even more on the back end and just prolong the inevitable.
They don't call them zombie memes for nothing. After they're killed the same people will just repeat them again.
What a load of crap!
Ten years to get back to zero and eleven years of double-digit unemployment which didn't end until September 1940 when the military draft was reinstated pulling 200,000 able-bodied men out of the workforce every single month for the duration of the war.
Slice it and dice it any way you like. The New Deal is still a turd!
Ten years to get back to zero and eleven years of double-digit unemployment which didn't end until September 1940 when the military draft was reinstated pulling 200,000 able-bodied men out of the workforce every single month for the duration of the war.
Slice it and dice it any way you like. The New Deal is still a turd!
So tell me another time where the UE Rate fell by 12 points in 4 years?
There's only 2 such times - the New Deal and WWII - BOTH of which were done with MASSIVE government spending (especially in the case of WWII).
OR - tell me another time where the EU Rate was CUT IN HALF in 4 years?
Aside from those 2 cases it only happened twice - under Truman and under Reagan (and those were MUCH smaller point drops) - and in Reagans' case he didn't even MANAGE IT on yearly basis - merely BRIEFLY hit that "cut in half level" when viewed on a MONTHLY basis. So the fact is, in pure numbers the New Deal OUTDID Reagan - and as a percentage it MATCHED Reagan (who did his own fair share of DEFICIT SPENDING) - even assuming the "most generous" way of defining "matched" for Reagan - and this is THE President the GOP constantly RAVES ABOUT. So, you folks RAVE about Reagan (rightly so I might add) but BELITTLE Roosevelt for accomplishing the same type of performance (superior performance actually in pure numbers)?
Hmmmmmmm
Partisan much are you?
The fact is the New Deal worked amazingly well - matching or surpassing that of ANY President. The UE remained high even in 1937 because it STARTED so damn high (25%) when the New Deal was put into place - NOT because it DIDN'T WORK. Before the rug was pulled out from it in 1937 the New Deal years saw the UE rate fall nearly as fast as it did during the "boom years" of WWII - and certainly as fast or faster than anytime since.
Just under three quarters of a century ago, a group of conservative economic advisers close to Franklin Roosevelt informed the President that they were worried about the rapid rate of growth in the US economy. Since 1933, when FDR took over at the height of the Great Depression, the economy had been expanding steadily, at an average rate of 14 percent per year. Schooled as most of these advisors were in the tenets of economic orthodoxy (which called for cuts in spending during an economic downturn), and unsure of the effects of the Keynesian-style deficit spending that the administration had been engaged in under the terms of the early New Deal, the President was advised to cut the budget, reduce deficit spending and tighten the money supply as a means to stave off inflation. Heeding their word (and no economist himself), FDR did just that.
The results were an unmitigated disaster.
Thanks to the Administration’s decision to move away from the increasingly Keynesian policies it had been following — policies that saw the unemployment rate fall from a high of 25% in 1933 to 14% by 1937 — FDR launched one of the sharpest economic downturns in American history-the so-called “[URL="http://www.newdeal20.org/2010/08/19/what-is-the-roosevelt-recession-17880/"]Roosevelt Recession[/URL]” of 1937-38. In just a few short months, the GDP declined by 13 percent; industrial production by 33 percent; wages by 35 percent and an estimated four million people lost their jobs. No fool, FDR quickly reversed himself and went back to Congress to seek a massive stimulus bill to put people back to work and repair the damage to the Depression-era economy. Within three months growth had returned and the economy was back on track.
The NRA was a vast experiment in cartelizing American industry. Code authorities in each industry were set up to determine production and investment, as well as to standardize firm practices and costs. The entire apparatus was aimed at raising prices and reducing, not increasing, production and investment. As the NRA codes began to take effect in the fall of 1933, they had precisely that effect. The recovery that had seemed so promising in the summer largely stopped, and there was little increase in economic activity from the fall of 1933 through midsummer 1935. Enforcement of the codes was sporadic, disagreement over the codes increased, and, in smaller, more competitive industries, fewer firms adhered to the codes. The Supreme Court ruled the NRA unconstitutional on May 27, 1935, and the AAA unconstitutional on January 6, 1936. Released from the shackles of the NRA, American industry began to expand production. By the fall of 1935 a vigorous recovery was under way.
Why was the recovery from the Great Depression so slow? A number of economists now argue that the NRA and monetary policy were important factors. Some maintain that Roosevelt’s vacillating policies and new federal regulations hindered recovery (Gary Dean Best, Richard Vedder and Lowell Gallaway, and Gary Walton), while others emphasize monetary factors (Milton Friedman and Anna Schwartz, Christian Saint-Etienne, and Barry Eichengreen). The New Deal’s NRA has received much criticism (Gary Dean Best, Gene Smiley, Richard Vedder and Lowell Gallaway, Gary Walton, and Michael Weinstein). A now discredited explanation from Alvin Hansen argued that the United States had exhausted its investment opportunities. E. Cary Brown, Larry Peppers, and Thomas Renaghan emphasize federal fiscal policies that were a drag on the return to full employment. Michael Bernstein argues that investment problems retarded the recovery because the older established industries could not generate sufficient investment while newer, growing industries had trouble obtaining investment funds in the depressed environment. Alexander Field argues that the uncontrolled housing investment of the 1920s severely reduced housing investment in the 1930s.
Quote:
One of the most coherent explanations, which pulls together several of these themes, is what economic historian Robert Higgs calls “regime uncertainty.” According to Higgs, Roosevelt’s New Deal led business leaders to question whether the current “regime” of private property rights in their firms’ capital and its income stream would be protected. They became less willing, therefore, to invest in assets with long lives. Roosevelt had first suspended the antitrust laws so that American businesses would cooperate in government-instigated cartels; he then switched to using the antitrust laws to prosecute firms for cooperating. New taxes had been imposed, and some were then removed; increasing regulation of businesses had reduced businesses’ ability to act independently and raise capital; and new legislation had reduced their freedom in hiring and employing labor. Public opinion surveys of business at the end of the 1930s provided evidence of this regime uncertainty. Public opinion polls in March and May 1939 asked whether the attitude of the Roosevelt administration toward business was delaying recovery, and 54 and 53 percent, respectively, said yes while 26 and 31 percent said no. Fifty-six percent believed that in ten years there would be more government control of business while only 22 percent thought there would be less. Sixty-five percent of executives surveyed thought that the Roosevelt administration policies had so affected business confidence that the recovery had been seriously held back. Initially many firms were reluctant to engage in war contracts. The vast majority believed that Roosevelt’s administration was strongly antibusiness, and this discouraged practical cooperation with Washington on rearmament.
The link is a good article that covers many factors associated with the great depression. Like most issues, there isn't one simple factor that caused it, or the painfully slow recovery.
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