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760 Comments
- paraforce, on 02/06/2009, -22/+199I find it interesting where Digg lies on the political spectrum.
5 months ago we were talking about how much we love Ron Paul, and now we're defending the New Deal...
Funny thing is, most diggers are probably more politically aware than most other demographics in this country... - oldgal, on 02/05/2009, -87/+225Thanks, I was just about to start researching that. All these years it had been pretty well accepted that the New Deal is what brought us back from the depression. Now all of a sudden I have begun hearing otherwise. I will still research the topic, but this article is quite helpful.
- had3l, on 02/06/2009, -6/+111Except digg isn't just one uniform mass of people. Believe it or not, different people have different political opinions and they like to post on articles that interest them.
Personally, I am a atheist libertarian Obama loving Ron Paul sympathizer who supports gay marriage, abortion and legalizing weed, all while defending my right to own a gun of course. I'm sure I'm an unique guy here. - AbsurdParadox, on 02/06/2009, -38/+123Let's say this is true, and the New Deal really succeeded in "saving the economy". One still must question how it was funded.
This is how. Theft.
http://en.wikipedia.org/wiki/Executive_Order_6102
http://www.the-privateer.com/1933-gold-confiscatio ...
Cliffs Notes: FDR stole everyone's gold, devalued the currency, and turned on the printing presses. This is still affecting us today. - Apokalyps2547, on 02/06/2009, -23/+108Also see the "Ronald Reagan made government smaller" myth (he CRATED thousands more government jobs than he removed)
- AnarchoGoth, on 02/06/2009, -16/+85I lean towards the libertarian, and generally loath big government.
(Not that the Republicans are any less big government.)
However, that does not mean that I think it is impossible for government spending to have positive results. Spending has to have done carefully, and most important, it has to have practical, and tangible results. A big part of the health of a country is its infrastructure. I think that the infrastructure that resulted from the New Deal was a positive result and good for the economy, at least at the time.
If you watch, The End of Suburbia, you might be thinking that the car culture has been a blight to our society. But you also have to consider that other infrastructure was later destroyed to make us more dependent upon automobiles.
Either way, the fact is that this country could use some serious improvements to our infrastructure. So it might be good to create jobs to do this.
Beyond this though, I find the bailouts very disturbing. - opinionsstink, on 02/05/2009, -13/+78Because it is good to look at more than just two points of view. It is relevant to the "FDR Failed myth", but does not mention shlaes or mcmillion, and ties into the current economic situation.
http://www.cato-at-liberty.org/2009/01/14/did-the- ... - Pake, on 02/06/2009, -10/+65"Just what was it about WWII that was supposed to have saved the economy?"
The fact that we were exporting a lot of goods over the short years before the war to pretty much every country involved in it, from food to ammunition. For whatever reason, people seem to think that before Pearl Harbor, we weren't involved in the war to any extent, which is pretty much what this article seems to be alluding to as well. - scottknick, on 02/05/2009, -54/+105You know, I learned that crap about WWII being the primary factor that lifted us out of the Depression all the way back when I was in high school, some thirty years ago now. Thanks for the reminder and another excellent find, Books.
But think about it for a minute. Just what was it about WWII that was supposed to have saved the economy? Why, it was massive, desperate government deficit spending, to create a full employment economy that encompassed not just able-bodied white men, but women and minorities and everybody who could pick up a wrench or a shovel or a rifle. So what is the "New Deal Failed" argument really supposed to prove? That FDR didn't spend fast enough? Didn't borrow money aggressively enough? It certainly doesn't prove that massive government intervention can't save the economy -- quite the opposite. - SourBreastMilk, on 02/06/2009, -15/+65The jobs, production, and projects produced during WWII played a large part in recovering from the Great Depression. Some of FDR's public work programs did help a great deal but many of them failed horribly as well. Plus a number of the programs were deemed unconstitutional by the Supreme Court and FDR illegally packed the courts.
There are also a number of noted economist who say that the New Deal, in fact, prolonged the Great Depression (this is from Wikipedia, so take it as you want):
UCLA economists Harold L. Cole and Lee E. Ohanian are among those who believe the New Deal caused the Depression to persist longer than it would otherwise have, concluding in a study that the "New Deal labor and industrial policies did not lift the economy out of the Depression as President Roosevelt and his economic planners had hoped," but that the "New Deal policies are an important contributing factor to the persistence of the Great Depression." They claim that the New Deal "cartelization policies are a key factor behind the weak recovery." They say that the "abandonment of these policies coincided with the strong economic recovery of the 1940s." Cole and Ohanian claimed that FDR's policies prolonged the Depression by 7 years. - dekuscrub, on 02/06/2009, -25/+73The current "new deal" aka stimulus package is like trying to get out of debt by maxing out all your credit cards.
Why do people think that big government is such a great thing? I just don't get it.
Walk in to the DMV for 5 minutes; come back out, and tell me you want the government to run health care. - TSK05, on 02/06/2009, -17/+64I've had several professors tell me that FDR failed and I believe them over this article. Now, of course to be fair, there are certainly several professors that will say the opposite.
Here is an analysis of that image. So if you look at it, you'll see the majority of the gains were made from 1939. Now, I am sure you recognize this as the year the WWII started. http://en.wikipedia.org/wiki/United_States_home_fr ... "The unemployment problem ended in the United States with the beginning of World War II, when stepped up wartime production created millions of new jobs"
Now undeniably there were gains before then too, but not so sharp. Now I am sure that at the time, the new deal did help the economy (this was also the argument my professors made) but it was not the miraculous recovery this article makes it out to be and it certainly did start us on the road to this debt our country is now - remember that Kaynes said spend now, worry about paying it back later.
I am certain that my professors could have made a better argument, I am certainly not an economist but just because you saw a chart that correlates some things together in order to make an argument does not make it true. I'll bring up global warming to explain it - you will see many images that show a corelation between CO2 and temperature. Thing is that temperature goes up before CO2. Now this doesn't disprove global warming because there are arguments that explain this (particularly that there were more efficient greenhouse gases that had decomposed into CO2) and still support global warming, but what it does prove is those graphs are utterly misleading - what is the point of CO2 being on those graphs if it was other gases that were causing the problem (although CO2 did contribute afterwards, these other gases never seem to be mentioned) and why did the presenters not mention that temp went up before CO2. - thepoliticalcat, on 02/05/2009, -122/+168The constant rewriting of history by the pundits of the right is damaging to the national morale not to mention the consciousness of history among our ill-informed voting public. They do teh entire nation a disservice.
- xerigen, on 02/06/2009, -17/+56Remember, FDR took us off of the gold standard. When he decided to print a crap load of money, the GDP also went up because of the increased money supply. I'm not a "Republican" (or a "Democrat" for that matter), just stating the facts.
- tehxen3, on 02/06/2009, -8/+44Paul Krugman is a respectable economist, Ann Coulter on the other hand is a populist white trash commentator. It's not really fair to pick Ann Coulter to represent the other point of view.
Try with Milton Friedman and explanations related with his school of thought. - inactive, on 02/06/2009, -64/+99FDR did fail......he created an entitlement system that failed. It was a quick fix for the time but it was the beginning of the slow transition to socialism. Who is John Galt?
- AbsurdParadox, on 02/06/2009, -1/+35Do I have a right to "confiscate" your car, and then pay you a value I determine to be appropriate?
The answer is no, and the same answer applies to everyone, "government" or not. Taking something without permission is theft. - logandurand, on 02/06/2009, -4/+37Most of the infrastructure is privately owned, and almost all of the technologies that make it what it is today were privately developed.
- BigMacMcChicken, on 02/06/2009, -9/+41I don't know a whole hell of a lot about stuff, but why am I supposed to be impressed by the fact that GDP and Industrial production "rocketed" after massive government expenditure. I mean, duh, right? Of course if you spend a trillion dollars on credit you can boost GDP. Government expenditure is included in GDP. So if the government prints a trillion dollars, and spends it on building things we can expect GDP and production to increase right? The problem is that you eventually have to pay for it, right?
- EelfinnTy, on 02/06/2009, -17/+47"These harsh and premature spending cuts caused another severe recession that ended after 13 months in June 1938." All of this expansion was funded by the government and not real growth. The government can create all the money it want's to "stimulate" the economy. Just look at Zimbabwe.
- HAL90000, on 02/06/2009, -17/+47Whatever the case, FDR should still be regarded as a terrible President. He threw hundreds of thousands of Japanese Americans into internment camps (or as the "pro-government" people call them, happy happy fun time camps) without charge, entirely because of their race!
That alone should be enough to shun any president out of any sort of praise, in my opinion.
But beyond that, he created an office of censorship to keep the media from reporting certain things, and his detractors would mysteriously go missing. He had his body guards smash reporters cameras who photographed him in his wheel chair, and he is the only President who has served more than 2 terms, because he likely wanted to be President forever. FDR was, by any objective standard, the closest thing we've had to a dictator in this country ever. - thecoolestguy, on 02/06/2009, -37/+67Actually, it is supporters of big government that rewrite history.
FDR's administration was a failure. His ridiculous policies kept unemployment artificially high throughout the 30's, and he illegally confiscated all private citizens' gold, as well as fraudulently devaluing the dollar against gold.
FDR's administration actually forced farmers to plow over crops.
FDR is the poster child for big government intrusion into individuals' lives. - booksnmore4you, on 02/05/2009, -97/+125It is truly astounding to me that anyone can get away with the "FDR Failed" Myth, saying that it was WWII that was the variable that brought the U.S. out of the depression. Why? Because this is not at all complicated, but a matter of reading a simple timeline-based graph accessible to most middle-schoolers.
- lendrick, on 02/06/2009, -23/+51I'm a liberal, and I've heard it all the time. It's a myth that they're trying to sell in order to push supply-side economics. Here's a very recent example, although if you google it, you'll find more:
http://mediamatters.org/items/200902030013
Ronald Reagan is the hero of modern "fiscal conservatives" due to the economic prosperity of the 80's, although one has to wonder if that was because he was pumping billions and billions of dollars into the economy that we didn't actually have. This site here provides a great analysis and a lot of numbers:
http://www.cedarcomm.com/%7Estevelm1/usdebt.htm
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LICENSE AGREEMENT: By digging this comment down rather than replying to it, you agree that you are angry because you lack the hard data to refute the arguments presented here. - YEEK, on 02/06/2009, -15/+43The myth that FDR's programs were a failure is being spouted by every right wing mouthpiece out there. It's obvious that this is one of their orchestrated "talking points" designed to hamstring Obama's recovery programs fro the start.
- inactive, on 02/06/2009, -6/+34Personally, I think the more politically aware you are, the less likely you are to adhere to political dogma. At least that's what I've found as I've gotten older - I used to be a wide-eyed idealist, but as I grew more and learned more, I saw that one has to be willing to consider problems from multiple perspectives, and that different problems require different solutions.
- Ninjapope, on 02/06/2009, -0/+27Paul and Obama aren't one or two issue people. It's quite possible to like qualities in both of them, but not support either of them completely.
- MoisturePoints, on 02/06/2009, -36/+63More revisionist history brought to you by liberals.
- Akairenn, on 02/06/2009, -7/+33You think the Internet would be anywhere as awesome as it presently is, if private industry hadn't stepped in?
- gabbagabba, on 02/06/2009, -36/+61And thats why the great depression lasted until 1939.
it was a good shot at stimulating the economy, didn't help solve alot of the existing problems of the depression. - mcla007, on 02/06/2009, -3/+28"that does not mean that I think it is impossible for government spending to have positive results."
It's quite possible for govt spending to have positive results. But you are falling in the seen and unseen fallacy. What you see is the positive result (in your opinion) of Govt spending. What you cannot see is the possibly even more positive results that are prevented from happening because the Govt chose to take the money away from its rightful owners. How would the owners of the money have spent it? What would be "positive result" in their opinion? Maybe they don't have the same idea of money well-spent as you, me, or the govt have. And since they own the money, they have the right to decide. - inactive, on 02/06/2009, -9/+32Of course injecting millions to billions of dollars into the economy will increase the GDP. He took us off the Gold Standard and printed money. He created jobs and paid them with newly printed money--money that was in existence before so the GDP went up along with the money supply.
- FLUX, on 02/06/2009, -35/+58All the pretty little charts dont show that govt spending on bridges and make work , do nothing for the economy in the long run because what do you do with the workers when the bridge is built or the road is finished? they go back on unemployment
huge govt deficits have to paid by someone you cant tax the people in the govt labor force to pay the taxes that are paying them
the story is one sided and inaccurate - amdahlj, on 02/06/2009, -8/+31Industrial Production is not a standard-of-living measure. Hell, it's not a measure of anything. The real economic record shows:
-Moderate, but definitely incomplete recovery under FDR until his fed changed reserve ratios, contracting the money supply, and creating a new depression.
-Massive, but meaningless increases in production and decreases in output during WW2 (Bombs and Battleships do not contribute to economic prosperity)
-No full recovery until after WW2
These facts are best explained by:
-Some New Deal measures relating to the banking system may have helped stop the bleeding and start a recovery.
-Recovery was sluggish because of the more economically crazy parts of the New Deal (burning crops, wage and price controls, etc...). Regime uncertainty killed business investment, dragging out the depression.
-WW2 diverted resources away from the production of goods for domestic consumption, but did have one positive aspect. It helped build a new bridge between business leaders and the executive, which laid the groundwork for the postwar boom.
The lesson:
-Some regulations can increase the stability of the market, but a just-do-something approach does more harm than good. Wage and price controls contribute to economic instability, poorly timed monetary contractions create depressions, unstable rule environments discourage investment and prolong depressions. - thecoolestguy, on 02/06/2009, -7/+30FDR's administration was a failure. His ridiculous policies kept unemployment artificially high throughout the 30's, and he illegally confiscated all private citizens' gold, as well as fraudulently devaluing the dollar against gold.
FDR's administration actually forced farmers to plow over crops (to try to reduce supply and raise prices for agriculture).
Don't forget FDR's destruction of the Supreme Court's ability to enforce Constitutional limits it set on the power of the federal government:
http://tinyurl.com/c5774h
FDR is the poster child for big government intrusion into individuals' lives. - lendrick, on 02/06/2009, -5/+28@diggydougie: It's precisely a left/right issue, and your comment highlights that. The banks weren't making high risk loans to meet quotas, they were making high risk loans because they didn't have to hold onto them. They could loan someone $100k and then immediately turn around and sell the mortgage for more than that. The reason they could sell it is because there were people down the chain who really wanted to buy them. So for the banks making the loans, it was basically free money. Dishonest, sure, but when it came time to pay the piper, they were already safely out of the loop with a pile of hard cash.
This piece here explains it way better than I could. Once again, if you're really confident about your argument, you shouldn't be afraid to read it:
http://www.thislife.org/extras/radio/355_transcrip ... - rz8472, on 02/06/2009, -4/+26WWII was a far more massive government spending program than even the New Deal. So if you're contending the New Deal failed, it would have to be because the New Deal didn't go far enough.
- NorthMass, on 02/06/2009, -4/+26I find it nauseating that all these people who claim to loathe Bush, the Patriot Act, and FISA at the same time love FDR. The guy threw people into internment camps for the duration of WW2 just for being Japanese.
- aftern9ne, on 02/06/2009, -2/+24I find it interesting that people try to define Digg as a specific set of beliefs, rather than a random group of people with their own ideologies who post comments about articles.
- Gerz1219, on 02/06/2009, -19/+41The most frustrating thing about this debate for me is the counterfactual nature of the "FDR prolonged the Depression" theory. We know that FDR implemented his policies and the economy recovered. What we don't know is how the economy would have performed if Herbert Hoover had been elected to another few terms. I don't understand libertarian resistance to a known positive outcome, in favor of an imaginary more positive outcome.
If you notice up above, earthwormzim does not actually provide any hard evidence that FDR prolonged the Depression. He merely regurgitates his religious faith that government intervention in the markets never works. And that's what libertarianism is -- a religion. When government intervention does work -- as it appears to have during the New Deal era -- a libertarian's answer is that the prosperity would have been even greater if only the hand-wringing authoritarians had stepped aside and slashed taxes and regulations and let the markets work. When these very policies lead to abject failure, they blame the inevitable impurities that have hindered a true free market system everywhere, like the Fed, in order to bolster their discredited faith.
My question is -- if we implement a new New Deal, and it only manages to create adequate recovery -- why should we throw away such certainty in favor of an illusory glorious free-market recovery which may or may not (probably may not) materialize? A bird in the hand is worth two in the Bush. - RonPauls, on 02/06/2009, -4/+25Wars are terrible for economies. The fact that Europe's productive capacity was killed while ours was intact was good for our economy.
So, when I say that WW2 got us out of the great depression, it's not just because we had a war, it was because we were untouched by the war and had a competitive advantage on the other side. - warbrain, on 02/06/2009, -9/+30The man was a money vacuum. He put more programs in than any Democrat since FDR. Guess he truly looked up to the man.
- Hockey13, on 02/06/2009, -6/+26What a woefully flawed argument this is. Even the lowliest economist wouldn't use GDP as a raw measurement of prosperity. Basic GDP, the kind you learn about in Macro 101, is composed thus:
Y = C + I + G + (Ex - Imp)
In the early 1930s, C (consumer spending) and I (investment...i.e. private investment into new projects) withdrew rapidly, partly because people began hoarding cash in response to the sudden shock to the financial system and the huge cutback caused by the Smoot-Hawley Tariff Act:
http://en.wikipedia.org/wiki/Smoot-Hawley_Tariff_A ...
As a direct result of this, Exports and Imports fell drastically and, after FDR took power, G (government spending) expanded greatly. Let's take a look at the growth of G in the years before and during Roosevelt's presidency with the national debt in parentheses:
1930: $4.0 billion ($16.2 billion)
1931: $4.1 billion ($16.8 billion)
1932: $4.3 billion ($19.5 billion)
1933: $5.1 billion ($22.5 billion)
1934: $5.9 billion ($27.1 billion)
1935: $7.6 billion ($28.7 billion)
1936: $9.2 billion ($32.8 billion)
1937: $8.8 billion ($36.4 billion)
1938: $8.4 billion ($37.2 billion)
1939: $9.3 billion ($40.4 billion)
1940: $10.1 billion ($43.0 billion)
1941: $14.2 billion ($49.0 billion)
1942: $35.5 billion ($72.4 billion)*
1943: $83.0 billion ($136.7 billion)*
1944: $100.5 billion ($201.0 billion)*
*World War II years
http://www.usgovernmentspending.com/year1930_0.htm ...
Now compare this to the GDP numbers during the same years and you'll notice an increasing percentage of government spending, mostly replacing private investment and foreign direct investment. This created several extremely notable problems:
1. Government spending is notoriously inefficient, often investing in projects that are not sustainable in the long term.
2. The expansion of government spending is often accompanied by a reduction of personal liberties.
3. The federal government's power grows relative to state governments, causing centralization inefficiency problems, contradicting the intent of the Constitution
4. Consumers might be spending, but the average basket of goods grows less diverse.
5. Individual companies, and some individuals, gain huge amounts of power as the government gains the power to pick favorites, often regardless of economic viability (see: GM, Ford circa 2009)
All that said, capitalism still does work. There was sufficient freedom in the 1930s to allow for private expansion, but the economy didn't rise from the ashes of the '29 crash until the late 1940s when G shrunk again and the postwar boom took place. The New Deal programs created many more problems than people remember, but government spending, while increasing the national debt, is still spending, and, as I like to put it, sometimes the government gets lucky (or good) at spending.
The point here is...the argument can be made (albeit poorly, IMO) that FDR "saved" the country from the Depression, but using GDP to do so is lazy and misleading. - inactive, on 02/06/2009, -35/+54This article fails to consider that the USA has begun producing for the war long before we actually entered the war.
Just another liberal fact-twisting article. - Gonthim, on 02/06/2009, -4/+22@Gerz1219
You mention the graphs. I have a few questions about them.
Did you notice that the graphs are from MBG Information Services?
Did you also notice that the author is the "president and chief economist of MBG Information Services" as cited at the bottom?
Also, why are they percentage scaled? Whats the percentage? How were they adjusted? Why aren't they using the basic, inflation-adjusted, values for the GDP?
I don't feel like the graphs are reliable. Statistics can be manipulated in a wide variety of ways.
Note: I'm undecided on the issue at hand. I just don't think this is presenting reliable data. - KirbyMeister, on 02/06/2009, -4/+22These numbers are short-sighted; of course the economy rebounded! What, is this supposed to imply that, had there been no New Deal, that the economy would never have recovered, and that people would stop trading, producing, and go back to a hunter-gatherer lifestyle? *****!
If you want evidence of how Keynesian economics actually works - instead of pointing to a graph going up, placing a bunch of random dots on it and claiming correlation - look at Japan for the last 10 to 20 years: stagnant economy marked with large amounts of government spending and taxation after a housing bubble burst and the government and legislature decided to bailout the banks.
Keynesian's flaw is that it focuses on only one variable, this almost mythical 'aggregate demand' - basically, how much ***** people are buying. Keynes basically said, to keep people buying ***** they don't need with as much money as you can get. What it doesn't focus on, is where the money comes from. If we're lucky, it's taxes, if we're not it's inflationary monetary policy. So we end up having huge debts that we can never pay back and we're still borrowing to try and keep feeding the beast, keep feeding the big debt monster... The only way to manage an economy properly is to spend within your means, but Keynes completely rejects that instead to abuse the ability of governments to create fiat money. It's like economic steroids.
(That said, supply-side economics is also *****, it's just Keynesian running in the opposite direction.) - reposado, on 02/06/2009, -4/+21The internet and the dot.com boom created the jobs. Clinton just happen to be president over a digital revolution.
Government dont create jobs or wealth. Government can get out of the way of businesses so BUSINESSES can create the jobs.
“You cannot legislate the poor into freedom by legislating the wealthy out of freedom.
What one person receives without working for, another person must work for without receiving.
The government cannot give to anybody anything that the government does not first take from somebody else.
When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that, my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.” - warbrain, on 02/06/2009, -6/+23Did you not read the article? Our economy was growing after FDR took office and instituted the New Deal programs. IT GREW. It did NOT instantly come back with the war - it was well on its way to recovery before WWII.
- had3l, on 02/06/2009, -15/+32What? You mean Ronald Reagan didn't save us from the invading army of ninja monkeys?
- Brassbud, on 02/06/2009, -9/+26Besides acts of war, the New Deal is probably the greatest tragedy of the 20th century. The author of this article seems to think that New Deal critics say FDR needed WWII to pull out of the Depression. That is not the case. What crtics say is that the New Deal extended the Depression, which would have eventually ended of own accord, and I think the graphs displayed show that is the case.
But extending the Depression isn't even the worst of The New Deal, for caused problems that we still have today, and has lead to a situation where social programs in this country are unsustainable. We are headed for a day of wreckoning we cannot avoid.
If only grade school history had not been required Americans wouldn't have had their heads filled with lies about FDR. The miseducation system in this country is shameful. -
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