Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
By the way, Amity Shlaes is not a "she" (I know, it fooled me too).
If you like Krugman, this may not be the book for you. It relies on well-known fundamental principles of economics, so acolytes of Krugman generally have a tough time with it.
But I appreciate your willingness to take a look at it if the price is right. I hope you find it and read it. There is likely to be a point or two you will find interesting.
It's laughable that you you suggest that Krugman doesn't rely upon fundamentals of economics. That's just absurd.
Let's be up front, Shlaes set out to marginalize FDR's success. It's hard to do that when history tells a different story. Except in the 1937-38 recession, unemployment fell every year of the New Deal. Also, real GDP grew at an annual rate of around 9 percent during Roosevelt's first term and, after the 1937-38 dip, around 11 percent.
Republican Dwight Eisenhower actually referred to those who opposed the New Deal as "dumb." Ike does a good job of summarizing Shlaes' "scholarship," but let's delve in further for the hell of it.
First off, we get some hooey about the Roaring '20s being great for poor people (in reality, income inequality increased) and how the 1929 crash was not really caused by speculation. Yes, the stupidity starts this early. Then there's the totally inaccurate picture of Herbert Hoover as some kind of unprecedented and newly anointed progressive. This is simply utter bull. Hoover was more pro-active than his predecessors, especially do-nothings like Calvin Coolidge. He was known for his work in foreign aid after World War I as well, but his administration was not a drastic break from typical Republican administrations before him. He was still an ardent fiscal conservative and believer in "private charity" and "rugged individualism." This is a fairly naked attempt by Shlaes to pin the beginnings of the Depression on dreaded "liberal" policies. Glenn Beck has really seized on this talking point to paint Hoover as some kind of socialist equivalent to FDR.
Shlaes goes completely off the rails once FDR comes into the picture. Whatever slight credibility she has left at this point goes out the window. She uses outdated unemployment statistics that don't count jobs created by public works projects because they're "make work" and as such not "real jobs." Gummint can't create jobs! Only the John Galts of the world can do that! In addition to that, she measures the economy using the Dow Jones Industrial Average...yeah, remember all those Okie farmers out of work who had stock in the DJIA? This puts the lie to the fact that Shlaes is simply being stupidly oblique — she is outright cherry-picking at this point. She also defends the use of the gold standard, something even right-leaning economists and historians agree worsened the Depression. Shlaes, of course, goes on to paint the favorite New Deal denialist target, the National Recovery Administration (NRA), as the centerpiece of the New Deal. The NRA did devolve into crony capitalism, but was junked in 1935 by the Supreme Court and suggesting that it was the "centerpiece" of New Deal legislation is disingenuous at best. It is, however, convenient to use to paint FDR as a commie, which she delights in, later comparing him to Stalin (Whiskey Tango Foxtrot?!). She even goes so far as to decry an expansion of FDA powers as "theft." Right, screw clean and uncontaminated food!
Once we get to the Roosevelt Recession, the stupidity only gets worse. No, it had nothing to do with Roosevelt's reversal of monetary and fiscal policy. You see, it had everything to do with "predictability" and "uncertainty" in markets, the weasily escape hatch that Shlaes can invoke anywhere she wants. Coolidge and Mellon-nomics were predictable: "Do nothing." So that meant the market would fix everything because conditions were "predictable." Despite the fact that the heaviest regulations under FDR were gone with the dismantling of the NRA, Shlaes blames the Wagner Act, which protected unions' rights to actually be unions, for creating "uncertainty." Unions at the time fought for outrageous things like subsistence wages, which cut into corporate profits and thus wrecked the economy. And this caused the recession within a depression. Yep, keep ignoring FDR's policy reversal, it had to be unions that did it. Ironically, at one point, she admits that spending did have a positive effect on the economy, then promptly ignores her own statement and launches into attacks on government spending. So much for consistency.
Quite rightfully, both prominent Depression historian Robert McElvaine and Matthew Dallek, son of eminent presidential historian Robert Dallek, have called this nonsense what it is: "Social Darwinism." It's free market fundamentalism at its worst, cherry-picking every last detail possible. Shlaes' work actually ought to be read...as a lesson in how history plays a role in the present and how it can be distorted for ideological purposes. Any bull**** you hear on the television set about the "failure" of the New Deal can most likely be traced back to this book. As one Republican senator has said, "In these economic times, a number of members of the Senate are reading a book called The Forgotten Man, about the history of the Great Depression, as we compare and look for solutions, as we look at a stimulus package."
I keep hearing that you shouldn't raise taxes during a recession or economic downturn because it will make the economy worse. Is this really true? Which U.S recessions were taxes raised and what were the results?
The wrecking ball just swings from one side to the other, doesn't it?
One day, raising raising taxes in a poor economy is going to make things worse, and the next its the best thing since sliced bread.
One day, raising the debt ceiling is a sign of lack of leadership and creating an unfair burden on the people, the next day its the exact opposite.
I keep hearing that you shouldn't raise taxes during a recession or economic downturn because it will make the economy worse. Is this really true? Which U.S recessions were taxes raised and what were the results?
Economists will tell you that taxes, especially on high incomes, have very little stimulative effect. Conversely, government spending and aid to the unemployment have a great stimulative effect.
Thus, the oppose is also true. Raising taxes, especially on high incomes, do very little economic harm to the economy. Conversely, cutting government spending and aid to the unemployment have a severe negative stimulus effect.
Thus, when reviewing proposed government policy, one should keep this in mind. The GOP wants to not touch tax-breaks given to millionaires and billionaires and instead cut government spending -- most of it that goes to lower income people, who are more likely to spend it (and stimulate the economy.)
Conversely, the Dems want to undo the tax breaks given to the wealthy under Bush, that ten years of evidence has proven did nothing to create jobs (in this country) and maintain or increase government spending.
From an economic point of view, the Democratic Plan does the least harm and possibly some good. The GOP plan will most certainly renew a recession. That's not just me, experts in the field say so:
PIMCO Founder To Deficit-Obsessed Congress: Get Back To Reality
Conversely, government spending and aid to the unemployment have a great stimulative effect.
Ok but we've been doing this since the stimulus was passed. Yet the economy is still in a mess. The stimulus did temporarily save some gov't jobs but it didn't have the multiplier effect that many assumed it would. Now that the stimulus is running out many of those gov't jobs it saved may get cut anyway.
Ok but we've been doing this since the stimulus was passed. Yet the economy is still in a mess. The stimulus did temporarily save some gov't jobs but it didn't have the multiplier effect that many assumed it would. Now that the stimulus is running out many of those gov't jobs it saved may get cut anyway.
First, the stimulus wasn't government jobs. This is where it went:
Look at the peak quarter of stimulus (pdf), which was the first quarter of 2010. I’m going to rearrange the categories a bit. Here’s how I read it: at annual rates (in other words, actual numbers in the quarter were only 1/4 as large), the total budget impact was $357 billion. Of that, we had:
Tax cuts and refundable tax credits: $151 billion
Aid to individuals (mainly unemployment insurance and food stamps): $70 billion
Aid to state and local governments: $103 billion
Everything else: $33 billion.
Remember, 40% of the stimulus was tax-cuts.
In addition, before it was passed, economists were already saying it was too small -- $788 billion, with 40% tax-cuts, over two-years, on a $14 trillion economy. That's 1.6% of GDP. So, at a multiplier of ~1.5, that's about a GDP boost of ~2.4% at most compared to what it would be otherwise.
Economists will tell you that taxes, especially on high incomes, have very little stimulative effect. Conversely, government spending and aid to the unemployment have a great stimulative effect.
Thus, the oppose is also true. Raising taxes, especially on high incomes, do very little economic harm to the economy. Conversely, cutting government spending and aid to the unemployment have a severe negative stimulus effect.
Thus, when reviewing proposed government policy, one should keep this in mind. The GOP wants to not touch tax-breaks given to millionaires and billionaires and instead cut government spending -- most of it that goes to lower income people, who are more likely to spend it (and stimulate the economy.)
Conversely, the Dems want to undo the tax breaks given to the wealthy under Bush, that ten years of evidence has proven did nothing to create jobs (in this country) and maintain or increase government spending.
From an economic point of view, the Democratic Plan does the least harm and possibly some good. The GOP plan will most certainly renew a recession. That's not just me, experts in the field say so:
PIMCO Founder To Deficit-Obsessed Congress: Get Back To Reality
I might agree if the taxes were only raised on individuals, up to a point, because punishing tax rates are always detrimental.
But raising taxes on small and medium businesses will either cause them to close up shop, or shrink in size.
We need to create more taxpayers, to increase revenue, and every person not collecting unemployment compensation, or other gov assistance, is a reduction in government spending, and a new tax payer, who is paying into the US Treasury.
First, the stimulus wasn't government jobs. This is where it went:
Look at the peak quarter of stimulus (pdf), which was the first quarter of 2010. I’m going to rearrange the categories a bit. Here’s how I read it: at annual rates (in other words, actual numbers in the quarter were only 1/4 as large), the total budget impact was $357 billion. Of that, we had:
Tax cuts and refundable tax credits: $151 billion
Aid to individuals (mainly unemployment insurance and food stamps): $70 billion
Aid to state and local governments: $103 billion
Everything else: $33 billion.
Remember, 40% of the stimulus was tax-cuts.
In addition, before it was passed, economists were already saying it was too small -- $788 billion, with 40% tax-cuts, over two-years, on a $14 trillion economy. That's 1.6% of GDP. So, at a multiplier of ~1.5, that's about a GDP boost of ~2.4% at most compared to what it would be otherwise.
The problem with that stimulus, was that government bureaucrats and lobbyists were determining where the "tax cuts" went to, not the market. how do they know which businesses need what, and which ones are the winners, and which are the losers??
We spent $4 trillion in deficits, if we would have eliminated, or greatly reduced all taxes for small and medium businesses for two years, we would have seen a jobs explosion. Instead we saw thousands of pages of new costly, and confusing regulations, and we still see more regulations popping up each and every day, and a president lashing out all doctors, hospitals, corporations, and every company or family grossing $250,000 a year.
I might agree if the taxes were only raised on individuals, up to a point, because punishing tax rates are always detrimental.
But raising taxes on small and medium businesses will either cause them to close up shop, or shrink in size.
We need to create more taxpayers, to increase revenue, and every person not collecting unemployment compensation, or other gov assistance, is a reduction in government spending, and a new tax payer, who is paying into the US Treasury.
How do you figure? Taxes are paid on profits. If the small business has no profits, it's inconsequential what the tax-rate was raised to. They won't pay taxes in either case.
If the business was profitable, it means that they'll have to pay a few p% more. They're still profitable and won't "close up shop, nor shrink in size." In fact, if they desire to maintain the same after-tax profit as the previous year, they'll be incented to do more.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
