Apparently, Arne Duncan has been ignorantly channeling Paul Krugman. Derbyshire (and Iowahawk) take him to school.
[Update a few minutes later]
Speaking of the crazy economics professor, Ed Driscoll reviews his latest antics.
I should add (as I have before) that it’s important to understand just how and why WW II ended the Depression. The conventional wisdom from the Keynesians is that all of the federal spending grew the economy, but that didn’t really happen — wars are in fact ruinous for economies, even for those economies that win them. Much of the production that occurred during the war was consumed in the war, or scrapped afterward, while there was rationing of food and goods on the home front. The real reason that we recovered was that once the war was on, FDR was too distracted by it to continue to tinker with the economy, as he had during the thirties, keeping it continually sick (much like a medieval doctor continuing to bleed a patient). He had to get arms production up and could no longer afford all of his random pet nostrums. Beyond that, unemployment plunged because so many men were drafted, taking them off the rolls, and then the women were put to work in the factories.
Had Roosevelt lived, after the war, he probably would have returned to his damaging tinkering, and in fact Truman wanted to, but the new Republican Congress that came in in 1946 wouldn’t let him, and so finally, after a decade and a half of disastrous Democrat policies, the economy finally recovered, and even boomed. But it doesn’t mean that the solution is a war, or even the “moral equivalent” of one. It means that the solution is sane government. I hope that we’re less than a year and a half from that.
[Update a while later]
The leftists can’t make up their minds about it.
“federal spending few the economy,”?
I think there’s a typo there…
Yes, fixed, thanks.
The Republican controlled congress in 1946 repealed many of the damaging New Deal “reforms” that stretched out the depression. That is the reason the postwar economy boomed. And the reason for the vitriolic attacks on them by Truman and the democrats in the 1948 election. Luckily, they did not get enough to re-implement the new deal.
UCLA economists Cole and Ohanian wrote a nice WSJ piece (plus several academic papers) on how the New Deal put the “Great” in Great Depression. They and others have calculated that the depression should’ve ended with a very strong recovery by 1935 or ’36, but FDR’s insane policies worsened and prolonged it.
In my own neck of the woods (Eastern Kentucky), my father (born 1918) said the government came through and hired all the geologists, mine supervisors, and foremen for WPA public works projects (at the federal wage scale), leaving the local mines with no one to run them. So of course the mines shut down and the miners were thrown out of work. What a jobs program!
The narrative I heard is that with the storm clouds of WW-II looming well in advance of December, 1941 (the invasion of Manchuria in the East, invasion of Poland were years earlier, and before that there were ominous developments), President Roosevelt and his advisors knew that they had to get industrial production on a war footing well in advance of there being a war.
Much like Roosevelt meeting with the fictitious industrialist Daddy Warbucks, there was some meeting of the minds between the President’s people and the Captains of Industry, and there was a significant rollback of regulation, either New Deal rules or otherwise, to “cut through the red tape” and get the wheels of industry turning.
Where would I have heard such a thing. Try “Mencius Moldbug” over at Unqualified Reservations, America’s favorite reactionary and fan of Victorian era dead English guys. I heard about MM right here on Rand’s fine site, so check it out, if you dare.
I am telling you that the Conservative/Libertarian/Republican/Tea Pary/Right Blogosphere movement has got it all wrong focusing on debt and entitlement spending. Yeah, yeah, the debt is unsustainable and yeah, yeah, everyone getting government benefits is an (Ayn) Randian leech, parasite, moocher, or worse, and yeah, yeah, all of this QE-ing is kindling inflation, and yeah, yeah, and yeah, if we don’t take on entitlements and unions and all things that go bump in the night right now, when are we going to do it?
But this energized focus on austerity, cut off the unemployment checks, push Grandma-in-the-wheelchair off the scenic overlook — heck yes! All of that is going to get Mr. Obama reelected. Besides, it is playing into the Left-Liberal tar-pit trap of zero-sum game, pitting the rich against the poor, limits to growth, we are doomed because we are at peak everything! “They” are demonizing “rich people in corporate jets” and “we” are demonizing PSE’s and entitlement recipients, that is, someone’s Grandma. Guess who is going to win that contest?
There are three things we need to focus on, and they are regulation, regulation, and regulation. To do anything else is to let the Liberal Left define the rules of the game.
I have no idea how to figure out whether the economic history theory you espouse or the one espoused by Keynesians is correct.
My last comment was to Rand. After I hit the submit button, I saw Paul’s comment.
Paul, since you believe that those who advocate austerity (but no tax hikes) end up looking like they are backing the wrong team in the battle of Grandma vs the Titans of Industry, then consider that those who advocate a rollback of regulation, at least regarding the EPA, look like they are backing the wrong team in the battle of Titans of Industry vs “my child shouldn’t get cancer from your industrial waste, and her father shouldn’t get cancer from working in your factories”, etc.
I believe it was Megan McArdle who mentioned, recently, that the War also helped break some wage-stickiness (because labor was so scarce and in such great demand), which would have also helped.
Seems a very plausible factor as well.
“FDR had halted many of his New Deal programs during the war —and he allowed Congress to kill the WPA, the CCC, the NYA, and others—because winning the war came first. In 1944, however, as it became apparent that the Allies would prevail, he and his New Dealers prepared the country for his New Deal revival by promising a second bill of rights….
Roosevelt’s death in the last year of the war prevented him from unveiling his New Deal revival. But President Harry Truman was on board for most of the new reforms. In the months after the end of the war Truman gave major speeches showcasing a full employment bill—with jobs and spending to be triggered if people failed to find work in the private sector. He also endorsed a national health care program and a federal housing program.
But 1946 was very different from 1933. In 1933 large Democratic majorities in Congress and public support gave FDR his New Deal, but stagnation and unemployment persisted. By contrast, Truman had only a small Democratic majority—and no majority at all if you subtract the more conservative southern Democrats. Plus, the failure of FDR’s New Deal left fewer Americans cheering for an encore.
In short the Republicans and southern Democrats refused to give Truman his New Deal revival. Sometimes they emasculated his bills; other times they just killed them.”
Read the whole thing.
I believe it was Megan McArdle who mentioned, recently, that the War also helped break some wage-stickiness (because labor was so scarce and in such great demand), which would have also helped.
Seems a very plausible factor as well.
The government implemented wage and price controls during the war, otherwise salaries would’ve increased due to labor shortages and that would’ve made war materials more expensive. In order to lure workers, companies started competing on benefits. This is when the idea of health insurance as part of employee compensation started. Some companies operated their own insurance companies. Ever hear of Kaiser shipyards? They were one of the biggest (if not the biggest) American shipbuilding companies during the war. They no longer build ships but you likely have heard of Kaiser-Permanente health insurance.
Beyond that, unemployment plunged because so many men were drafted, taking them off the rolls, and then the women were put to work in the factories.
In other words, debt-financed government spending caused unemployment to plunge.
In other words, debt-financed government spending caused unemployment to plunge.
No, temporarily enslaving millions of unemployed young men caused unemployment to plunge.
In other words, debt-financed government spending caused unemployment to plunge.
No, MASSIVE debt-financed government spending caused unemployment to plunge. The current crew is just too tentative, right Jim?
Another frequently-overlooked factor is the Nazi invasion of the USSR in 1941, which immediately (literally, overnight) flipped the Communist Party USA from pro-strike, anti-military-buildup to fanatically anti-strike, pro-military-buildup. Given the powerful position the CPUSA had built up in the heavy-industry unions, this meant that strikes were suppressed from 1941 through 1945 by any means necessary, including the ready use of lead pipes on recalcitrant skulls, and the intellectual class in general supported as much military buildup as possible. The non-CP elements on the Left, like the Trotskyite Socialist Workers Party, were prosecuted and jailed under the Smith Act with the enthusiastic support of the CPUSA, which was ironic since a few years later the CPUSA leaders enjoyed the same fate. Being able to count on absolute labor peace was a big productivity-booster.
got it all wrong focusing on debt and entitlement spending.
Paul, you forgot to mention smaller govt. This isn’t just about less spending, it’s also about less regulation. They’re on top of it, don’t doubt that at all.
“regarding the EPA, look like they are backing the wrong team in the battle of Titans of Industry vs “my child shouldn’t get cancer from your industrial waste, and her father shouldn’t get cancer from working in your factories””
Why does it have to be that someone if for the leftist version of the EPA and environmental theology or they support kids getting cancer?
On issue after issue it is either toe the Democrat line or you favor death, destruction, mutilation, starvation, wild fires, famine, or some other apocalypse. And what party are the fear mongers again?
Actually. FDR did have one very successful public works program. But it’s one the lefties-if they know about it at all-probably don’t want to be reminded about at. In fact, almost nobody remembers this a all. The program was the U.S. Navy. Right after he came into office in 1933, FDR authorized a 32-ship boost to the USN’s shipbuilding program. In 1937, the USN had 335 ships (today it’s around 280). Three of the carriers eight carriers the USN had in service at the time of Pearl Harbor, the Enterprise, the Yorktown, and the Hornet, were built with Work Projects Administration Money. But try selling this idea to modern lefties, they’d undoubtedly want give the money to the public employee unions instead. They’d probably argue, if they were back in the 1930s, that the new ship construction would only antagonize the Nazis and Imperial Japan.
Wodun, fans of limited government should welcome what you foolishly call “fear mongering.” Death is a good test for quickly determining whether a tax-payer funded program should be considered. And for fans of self-reliance, the death of innocent children is an even better cheap test. Why tax people for a fire department? Surely there are other ways to finance fire departments, and surely people should be responsible for keeping their house from burning down, so why even consider a tax-supported fire department? Because innocent children will die in fires if we don’t have some sort of fire department. A fire department passes the “will children die if we don’t do something like this” test, and so it is worth taking the time to consider a tax-supported solution. In contrast, National Public Radio does not pass the “will children die test?”. This doesn’t automatically mean that we shouldn’t fund NPR, but it does tell me that it should be harder to get conservatives and libertarians to even consider the matter.
EPA regulations easily pass the “Will innocent children die if we don’t something like these regulations” test, and so it surprises me that you dismiss my concerns as fear-mongering. On the contrary, I’m taking right-wing concern for austerity and low taxes and above all, limited governement quite seriously, which is why I focused on the EPA instead of on some less important regulatory body.
And that’s why I’m so surprised the EPA has become a punching bag among the republicans running for the presidential nomination this time around.
The rest of the world was blown to shit. We were the last industrial power standing. While the rest of the world rebuilt, we sold them our goods. That’s about as concise as I can get.
Not all EPA regulations will pass that test. As the years go by, the number of regulations continues to be added, and the probability approaches unity that ridiculous regulations get added. There is no “check and balance” on the growth of EPA regulations. Each additional regulation, necessary or not, has compliance costs. As compliance costs rise, it becomes more and more difficult to open a new business or expand an existing one. The cumulative effect of these regulatory compliance costs is such that beyond a certain point it becomes completely impractical to risk starting a small business or irresponsible to hire a new employee. We reached that point about a year ago. Further restriction on business is not the answer.
Mr Milenkovic – “with the storm clouds of WW-II looming well in advance of December, 1941” Damn right. For some of us, it was doing a hell of a lot more than looming. WWII started in 1939. The Battle of Britain was in 1940. And for much of the early part of the war, a fair number of influential Americans (including Joseph Kennedy Sr.) actually supported Nazi Germany.
Ed, Lets say you come with a new idea for a toy – say, a new kind of frisbee for kids, maybe with a more sturdy version for disc golf as well. Since you already own plastic injection molding equipment, you decide to start to manufacture it here in the USA, and sell it in both the USA and in the EU. Maybe it will catch on, and a large toy maker will want to license it later on, but for now, you’re going to be a mom-and-pop business. Are you familiar with what regulations you would have to satisfy? Europe is more onerous than the USA, but not by much. The regulations are not a big deal.
I’m taking right-wing concern for austerity and low taxes and above all, limited governement quite seriously
No you’re not. You’re meandering from a “will innocent children die” test to a new frisbee. Here’s a short history of the environmental movement in the USA.
1965
[Environmentalist]PEOPLE ARE DYING FROM BREATHING THE AIR IN LA!
[Society]Umm, not exactly. But we do have air pollution problems, especially in our big cities. We should institute clean air standards and use catalytic converters. We’ll get to work on that, and thanks for pointing it out.
[Environmentalist]F##K YOU!
1968
[E]THE EARTHS POPULATION IS EXPLODING, WE’RE RUNNING OUT OF RESOURCES!
[S]Umm, not exactly. But we can spend some money studying the issue. Thanks for pointing that out.
[E]F##K YOU!
1969
[E]THE CUYAHOGA RIVER IS ON FIRE!
[S]Umm, not exactly. But we are dumping toxic chemicals into our waterways. We’ll get to work cleaning that up. And thanks for pointing that out.
[E]F##K YOU!
1974
[E]THE EARTH IS COOLING, WE’RE HEADED FOR ANOTHER ICE AGE!
[S]Umm, not exactly. But we can spend some money studying the issue. Thanks for pointing that out.
[E]F##K YOU!
1977
[E]OUR WETLANDS ARE DISSAPEARING!
[S]Umm, not exactly. But we can institute some restrictions on development. Thanks for pointing that out. By the way, did you notice that we’ve made some progress on air pollution?
[E]SHUT UP! WHEN I WANT YOUR OPINION ILL RATTLE YOUR CAGE!
1979
[E]THREE MILE ISLAND! THREE MILE ISLAND! THREE MIL%#KJHG&3#?!@ (head explodes)
[S]Hey, calm down. How about we agree to not build any more nuclear power plants and admit we aren’t capable of responsibly producing energy from nuclear. Would that appease you?
[E]F##K YOU! THREE MILE ISLAND! THREE MILE ISLAND! etc.
1981
[E]WE’VE GOT TOO MUCH GARBAGE, WE’RE RUNNING OUT OF LANDFILL SPACE!
[S]Umm, not exactly. But we should encourage recycling. Thanks for pointing that out.
[E]F##K YOU!
1985
[E]CFC’S ARE DESTROYING THE EARTHS OZONE, WE’RE ALL GOING TO DIE!
[S]Umm, not exactly. But we can eliminate them from aerosol spray cans, that should help. Thanks for pointing that out.
[E]F##K YOU!
1989
[E]UHVGV*^&T%KJLHBG^&%** (head explodes again)
[S]Look, we agreed no more nuclear power. That means oil, and it needs to be transported. And you don’t want pipelines (caribou or something). Exxons a big company, they’ll clean it up. How much money do you want?
[E]5 BILLION! AND F##K YOU!
1992
[E]THE INTERNAL COMBUSTION ENGINE IS THE WORST INVENTION EVER!
[S]Whatever. Here’s some more money, go away.
[E]F##K YOU! AND ILL BE BACK!
1996
[E]THE SPOTTED OWL IS GOING EXTINCT! AND THEY’RE BOMBING SEALS, THEY’RE BOMBING i mean THEY’RE CLUBBING SEALS!
[S]Umm, I saw a nest in a grocery store sign on the way into work this morning. And what?
[E]F##K YOU!
2000
[E]GLOBAL WARMING! GLOBAL WARMING! (POLAR BEARS!) GLOBAL WARMING!
[S]Geez, 25 years ago it was global cooling. And it says here polar bear populations are rising. How much money do you want this time?
[E]F##K YOU!
2005
[E]CLIMATE CHANGE! CLIMATE CHANGE! CLIMATE CHANGE!
[s]Quite honestly, this is getting old. If we agree to spend $warpfangle, will that appease you?
[E]F##K YOU! AND ILL BE BACK!
2009
[E]CO2! CO2! HURRACANES! TORNADOS! GLACIERS! BANGLADESH! CO2! CO2!
[S]God I can’t even hear myself think anymore. Banglawho? Looks like Churchill was right, appeasement doesn’t work.
[E]F##K YOU!
August 14 2008
[Society]George W. Bush and Congress pass a law stating that phthalates shall not be used in children’s toys.
[Environmentalists] Good start.
[Inventor] Hey, now my amazing new frisbee toy won’t be as durable — I *needed* those phthalates in my plastic mix. Damn those restrictive regulations!
August 15, 2008
[Inventor] After sleeping on it, I realize that I can redesign the edge of the frisbee to form a bumper, improving durability and the aerodynamics. What’s more, now I don’t need to use such a specific plastic recipe — I can go with less expensive plastic (which just happens to be phthalate-free). Well, how about that? Lets get to work!
[Society] Yay!
[Curt] F**k you Bob-1!
Since I told a story about unicorns farting rainbows, here’s the other side of the story:
http://en.wikipedia.org/wiki/Consumer_Product_Safety_Improvement_Act#Criticism
Bob-1 said:
A national speed limit of 5 MPH easily passes this test, yet I see no one proposing it. Why do they hate the children?
I recently saw a study that suggested that kids below a certain surprisingly high age couldn’t judge a car’s speed if it was traveling more than X miles an hour, where X was a typical residential speed limit minus 5mph. I’m sorry I can’t remember the exact speeds or cite the study, but in essence, the study said “preteens can predict when it is safe to cross the street when cars are traveling 20mph, but are surprisingly bad at it when cars are traveling 25mph, and if residential car speeds were lowered to 20, lives would be saved.” The study acknowledged that this was a surprising result. The study also found that the majority of people would naturally lower their speed to 20mph (or whatever the safe speed predictable-to-preteens was) if roads were narrowed. Already existing roads could be narrowed by installing bike lanes. The point isn’t that speed limits should be lower, but that cars should go slower.
To answer you question more directly Hal, speed limits clearly pass the test for at least talking about whether they are a good idea. And indeed, I don’t see a lot of Libertarian resistance to speed limits in residential areas. There are plenty of places where the speed limit for cars is zero mph (because motorized vehicles are banned outright, like walkways on public parks) and again, I don’t hear any resistance from typical Libertarians.
Fletcher Christian Says:
August 20th, 2011 at 1:59 am
Mr Milenkovic – “with the storm clouds of WW-II looming well in advance of December, 1941″ Damn right. For some of us, it was doing a hell of a lot more than looming. WWII started in 1939. The Battle of Britain was in 1940. And for much of the early part of the war, a fair number of influential Americans (including Joseph Kennedy Sr.) actually supported Nazi Germany.
From a Chinese perspective, it began several years before 1939 when Japan started invading and seizing control of portions of China.
Yeah, I saw the speed limit proposal. Your memory is correct, Bob-1, the proposed residential speed limit was 20 mph. That’s how fast we’re supposed to go in most school zones when children are present, they proposed extending the limit to most residential areas.
There were some studies done a decade or so ago on residential planning–they liked narrow, tree-lined streets with 90 degree angles. Think “Leave it to Beaver”. Curiously, my wife prefers wider, gently-curved streets (which is what we live on, and was popular among civic designers probably starting from the 60’s). Supposedly 25 mph, but I’ve seen cars doing more than 40 on it.
larry j – Point taken. Did the USA do anything about that? I do realise that a very small number of Americans did; the same was true in the Battle of Britain. IIRC there were were about 10 Americans who enlisted in the RAF – and were threatened with dire consequences for doing so.
WWII started a little earlier for Czechoslovakia, too.
[Inventor] After sleeping on it, I realize that I can redesign the edge of the frisbee to form a bumper, improving durability and the aerodynamics. What’s more, now I don’t need to use such a specific plastic recipe — I can go with less expensive plastic (which just happens to be phthalate-free). Well, how about that? Lets get to work!
Another idiotic post from Bob. Technology doesn’t work like religious stories do. We’re not going to get cheaper frisbies because environmentalists led us to the True Path and it’s pretty stupid to think otherwise.
larry j – Point taken. Did the USA do anything about that? I do realise that a very small number of Americans did; the same was true in the Battle of Britain. IIRC there were were about 10 Americans who enlisted in the RAF – and were threatened with dire consequences for doing so.
WWII started a little earlier for Czechoslovakia, too.
The Japanese were in parts of China as early as 1932. They invaded Shanghai in 1937 and the Rape of Nanking took place in December of that year. The US enacted trade sanctions (oil and metal) against Japan but no direct hostilities. In 1941, Roosevelt allowed 100 military pilots to resign to join the American Volunteer Group (better known as the Flying Tigers). They and their support staff began their first combat operations against the Japanese a few days after Pearl Harbor. That and supplying some military equipment is about the extent of US support to China before the war that I know about.
Before the US got involved in WWII, there were some Americans who joined the RAF or RCAF. They were threatened with loss of US citizenship. The most famous group that I know about were the Eagle Squadrons. According to the link, some 244 American pilots would serve in the Eagle squadrons. Most of them transferred back to the American military after we entered the war, providing a valuable cadre of combat-tested pilots to help get our forces up to speed.
Karl, my little phthalate story is based on a true story about people I know personally, and my point was hardly that there is one true path. My point was apparent roadblocks caused by environmental regulations can be overcome by run-of-the-mill ingenuity, and since engineers get stuck in a rut, forcing them to re-examine the problem sometimes leads to further beneficial innovation.
Karl, my little phthalate story is based on a true story about people I know personally
I’d have to disagree. Don’t you remember from elementary school how lying works? Say something untrue in order to get something you want or placate someone more powerful? That what happened here. They had to lie and say they liked the sandwich they were given. You with your natural gullibility simply have taken the story literally rather than as it really happened.
I felt bad about not being able to simply name names to demonstrate what I’m talking about, but given your response, I’m glad I didn’t — you’d simply call them liars. We’re at an impasse.
I felt bad about not being able to simply name names to demonstrate what I’m talking about, but given your response, I’m glad I didn’t — you’d simply call them liars. We’re at an impasse.
Not really. You have a well known propensity for failing to understand human motives and reality. You claim that someone designed a toy and then, due to the beneficial restriction of regulation, found within a short period of time a better design for the toy that just so happened to be better in terms of the original goals of the business. That has all the hallmarks of a religious parable.
A sinner finds that by hewing to the religious dictates, their original activities have become bountiful. It ignores one glaring conundrum. If the innovation was so easy to find and so useful, then why didn’t they use it in the first place? Answer is that the innovation wasn’t as beneficial as claimed. It was instead people making lemonade from some particularly sour lemons. By appearing to embrace the regulatory burden and pretending to benefit from it, they hoped both to dissuade future regulation of this sort (since they reward the regulators by vindicating the regulators’ work and very existence) and appear more consumer friendly.
This stirring story also just happens to back Jim’s view of the world and a particular argument in this thread. I find that too convenient.
Sure, it’s possible that things happened some other way. It is a bit difficult to get signal when the Jim filter is in the way. But simply put, I don’t trust your judgment, understanding, or motives. I think you’ve subordinated your thought and viewpoints to particular ideologies. In sum, I think it more likely that things didn’t happen as you say they did.
Glancing over the story one final thing stands out. I think it gives a more nuanced view of what really happened. Jim, you mention that they created a bumper on the frisbee in order to provide the structural strength they lost from the regulation. It’s worth noting here that almost all frisbees have a bumper. So a bumperless frisbee is a significant deviation from the design.
My view is that this is exactly what the inventor was trying for. A bumperless frisbee that one could throw. Thinking about it, adding a bumper probably did improve dynamics, that’s probably why the rest had one. But it compromised the look and hence uniqueness of the frisbee (the more it looks like a normal frisbee the lower the cachet of having one). So the inventor tells you now that aerodynamics was what he was after? Then why wasn’t there a bumper in the first place? Simple answer is that when the design of the frisbee changed, so did the claimed priorities. Traditional marketing trick. Needless to say, I still don’t buy your interpretation of things.
Thank you.
I especially like the negative comments, the meme that FDR dragged the U.S. out of the “the depression” with stimulant spending, Keyns… etc [it’s all waste spending to look like you know what your doing and get PR].
That people can still believe this tripe 70+ years later is a warning that well done propaganda (the often demonized tool of those evil capitalists) used by a hard left main-stream media can accomplish wonders. Wonders like an entiltlement mentality, junk science, veiled anti-semitism, etc.
This is the goal-oriented-media/public interconnectivity that Goebbels dreamed of, he would be proud.