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I wonder if FDR had a made up chart about how unemployment is better off with a recovery act.
I guess in the late 30's there was no lag between unemployment and the dow
You know, I see the Wingnuts use the fact that 1938 fell back into recession (and the market retreated) as "proof" that the New Deal didn't work and can't help but laugh at their ignorance and/or their gall.
You are aware aren't you that the REASON 1938 had such bad numbers is not BECAUSE of the New Deal policies but BECAUSE in 1937 FDR - who was under increasing pressure from Republicans (and members of his own cadre of advisers who shared opinions with the GOP) to cut back on the New Deal because of their concern about the deficit (any of that sound at all familiar) - reversed his New Deal policies prematurely (cutting and canceling various stimulus type programs). The result was that (as might be predicted) the economy fell back in recession - with both the stock market AND unemployment giving up the hard-fought gains FDR had achieved over 1936 and 1937.
Wingnuts then have the gall use the fact that 1938 showed little improvement over 1935 as "proof" the New Deal didn't work - conveniently overlooking the fact that 1936 & 1937 showed lots of improvement (both for the stock market and for unemployment) - and that the reversal in 1938 was NOT due to the FDR's New Deal policies but rather reflected the fact that action was taken in late 1937 to REVERSE those policies and institute policies more focused on deficit reduction that were more palatable to the GOP.
Prior to FDR reversing course and caving in to the GOP the markets were rising and unemployment was falling. When he changed course and agreed to do as the GOP wanted and focus on the deficit instead of the economy then BOTH the stock market and the unemployment rate reflected a turn for the worst.
The fact is, FDR's original policies had be working JUST FINE prior to him reversing course in 1937 - with the markets recovering and unemployment dropping 5 percentage points in just 2 years (that's a HUGE drop).
"By the spring of 1937, economic indicators had regained the production, profits, and wage levels of 1929, except for unemployment, which remained high, although it was considerably lower than the 25% unemployment rate seen in 1933. In June 1937 some of Roosevelt's advisors urged spending cuts to balance the budget. WPA rolls were drastically cut and PWA projects were slowed to a standstill.[4] The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 per cent and production of durable goods fell even faster.
Unemployment jumped from 14.3% in 1937 to 19.0% in 1938, rising from 5 million to more than 12 million in early 1938.[5] Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels.[6] Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937. In most sectors, hourly earnings continued to rise throughout the recession, which partly compensated for the reduction in the number of hours worked. As unemployment rose, consumers' expenditures declined, leading to further cutbacks in production."
It was not the New Deal policies that caused the recession of 1938 but rather the REVERSAL of those policies. Changing his focus from the economy to the deficit was the worst decision FDR ever made. There are times to focus on the deficit and there are times to IGNORE the deficit and focus on the economy. Right NOW - as in 1937 - is NOT the time to worry about the deficit, it's time to worry about the ECONOMY. The deficit can be dealt with LATER - once the economic crises has passed.
Ken
Last edited by LordBalfor; 01-01-2010 at 07:10 AM..
I made a killing this year, while I watched all the Beck types run out and buy gold at the top of the market. Way to go yahoos.
I also had my best year ever, and a lot of the gains are yet to come because some sectors like real estate stocks haven't even rebounded yet. They were cheaper than dirt back in Feb, March when I bought some.
After an absolutely HORRIBLE 2008, stocks saw terrific gains in 2009 - this in SPITE of claims by the Obamabashers that if Obama was elected the stock market would crash. From their March lows, the DOW and the S&P were up nearly 60% and the NASDAQ nearly 80%.
Ken
It's always this way - Republicans muck up the economy, Democrats come around to fix it. Obama has done a great job, the stimulus and bailouts are working, we are indeed recovering from this bad recession. It will be slow and gradual over several years, but I shudder to think what the war-mongering, tight-fisted (when it comes to spending on Americans) Republican regime would have done had they been in office. We'd all be speaking Chinese by now if it were up to them.
It is a house of cards, bracing for a breeze to come knock it all down.
You will see the collapse of our dollar in less than 2 years(They are predicting in a year), if we keep doing what were are doing.
Interest rates are going to have to come up, which will kill any housing recovery.
Just like the Great Depression of the 30's, and our administration, not learning what went wrong then, will also cause the bubble to burst. They are traveling down that same path.
It took a World War to get us out of the last one.
The economy did not just have a heart attack; we are suffering from financial appendicitis. Instead of doing the necessary surgery, Congress is prescribing potent addictive painkillers.
I made a killing this year, while I watched all the Beck types run out and buy gold at the top of the market. Way to go yahoos.
That's the herd mentality. I bought some GLD at $70 and then sold it at $105. Took my profit and then moved elsewhere.
By the time the herd starts buying something it's usually at its peak and that's when you get out.
The key is to get in early. It's not just the Beck types that do this; its the people that follow MSM advice of what to buy and sell. Heck just look at Cramer and all the damage he's done to people's portfolio.
Never buy something when it's being touted by any MSM financial guru as a good buy. That means it's at the top and you should be selling it instead if you want a profit.
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