The Glade 4.0

Appeal to popularity, and to authority. The reason that is the case is because we have a government sturctured in a way that makes it opposed to economic freedom, and as such they teach the popular view to the masses, most of whom don't have the ability or drive to learn and understand economics, which is what makes it popular.

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Ezekiel 23:19-20 

Ummm... because their price fluctuations are occuring relative to the paper currencies?

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Ezekiel 23:19-20 

*chuckle* Oh I have no doubt Khross can (and may decide to ) wtfpwn me on economics, but that doesn't change the fact that my statement reflects the overwhelming consensus of economists while Gold Bugs are generally regarded as just this side of Flat Earthers.

I know, I know - appeal to whatever. *shrug* I'll take broad consensus of experts over internet contrarianism any day of the week.

RangerDave:

Overwhelming consensus of what economists? Paul Krugman? Megan McArdle? People who write for newspapers and regularly demonstrate their own ignorance? Because, honestly, the Great Depression is the single most mistaught (and intentionally to almost the point of conspiracy) bit of history in the United States. I don't even have to get into the economics of it ...

What was the worst economic down turn of the 20th Century?

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I'll be happy to engage in a Q&A style discussion, Khross, but first I'd appreciate a straightforward explanation of what you think was so appallingly wrong about my initial statement. Do you disagree that there was substantial contagion? Was there not a strong correlation between countries maintaining the gold standard and the severity of the downturn they experienced?

Not so much as you've been lead to believe. The Great Depression was the culmination of a lot of different things, but ultimately wasn't so much global as a single entity as it was the coincidence of multiple recessions. It's a complex subject.
This shibboleth is so appalling as to raise me to anger about our education system. It is a political FALSEHOOD that has to do more with forcing reality to fit Keynes than accepting that Keynes and Monetarist theories are flawed when judged against the backdrop of history. So, no, there wasn't a strong correlation between maintaining the gold standard and the severity of various depressions/recessions during the 1920s and 1930s. There is, however, a strong correlation between fiat currency and making problems look better than they really are on paper.

Question number 2: What ended the Great Depression?

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I'm not sure it ever ended, the economy certainly changed as it became a war economy, but even after the Great War ended, despite short term growth, I believe the depression was continued onto today, only masked through currency manipulation and various boom bust cycles.

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Ezekiel 23:19-20 

FDR's New Deal.

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Holy shitsnacks!

If I recall correctly, unemployment never fell below 14% even during the New Deal and the next 10 years afterward.

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The Dude abides.

Something like that, but it's hard to track. Government manipulation of employment is data is rampant and extends back to the early 20th Century at a minimum. By the by, the Department of Labor is currently counting Census Workers as Full Time Employees.

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Gold/commodity standards are great in theory but it's another one of those things that only works in theory. How do you guarantee that the government doesn't debase the standard whenever it becomes convenient? If dollars are 100% backed by gold, for example, you can magically make any recession go away by simply printing 10% more dollars and changing the backing to 90%. And that will keep happening until you have paper money again.

You mean like they do with fiat currencies right now?

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I don't doubt that the general public's understanding of the connection between the gold standard and the Great Depression is almost certainly flawed, but I find it hard to believe that so many actual economists and professors of economics would continue to espouse the connection if it was so fundamentally and obviously flawed. Anyway, though, thanks for the response. I'll answer your questions now.

Q1: What was the worst economic down turn of the 20th Century?

In the developed world, I'd say the Great Depression.

Q2: What ended the Great Depression?

Obviously a complex combination of factors, but my understanding is that stabilization of the banking sector, increased money supply, rising commodity prices, and production growth thanks to WWII (some of it domestic deficit spending, some of it foreign purchases) were the biggies.

Yep, 70,000 "new jobs created in the Obama Economy", however, as if that weren't enough data manipulation for exclusively political ends: while paying them as Full Time Employees, they are demanding that they stick to a light workload, generally taking no more than five hours to complete, and paying them for the full day. The fact that it is wasteful isn't even the most troubling part of the manipulation. That title is held by the fact that this will artificially nearly double the duration of the Full Time Employment, further masking the problem.

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Ezekiel 23:19-20 

Why do you find it hard to believe that people hold on to what they are taught, even when evidence to the contrary is presented?Actually, the sharpest and largest economic down turn of the 20th Century occurred between 1919 and 1921, but you rarely hear about it. The Post World War I recession was brutal and shrank most economies able to be tracked in excess of 30% within 6 months. By comparison, the Great Depression was a 18-21% in the worst places.
Except, what happened immediately following World War II? In 1929 dollars, what year posted the first real quarter's growth in the United States in production, consumer spending, and employment relative to the Black Friday Collapse? The history books will tell you that there were years of growth between the New Deal and World War II, but that's not really the case. Unemployment continued to rise; money continued to be problematic; and the poor continued to be poor. We did shift to a Fiat currency in full as a result, but that only caused more problems.

So, obviously, the answer you've been taught is wrong. Everything that happened between 1929 and 1939, policy wise, made the situation worse and actually created a depression out of what would have been a Slow-U caused by a liquidity crisis in the U.S.

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You actually mint (not print) on gold and silver. Paper or electronic exchanges are only for temporary tracking purposes, assets are stored as bullion itself.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

You can still debase it, just alloy new money with base metals. The Roman Empire did it, no reason any other government can't.

Xequecal:

Answer my question.

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I guess it depends on how you measure "largest downturn". If you mean in a single year, you are correct. However, the Great Depression was longer and the overall downturn was greater if you look at both in their entirety.

Only if the people allow such idiocy. Don't let them. When its proposed have a man with a rifle nearby nodding no.

The romans had the Praetorian guard to smack down excess. We need similar.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Not really. The Great Depression wouldn't have been nearly as long lived as it was without all the attempts to shoehorn Keynesian policy theory into practice.

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I wasn't commenting at all on if the GD needed to be as long as it was. I was comparing one occurance with another. Regardless of the preventablity of either, my statement is still correct.

Aizle:

Only in the sense that it happened; not in the sense that it was the worst. The same fundamental issues triggered the 1919 Recession, and without great government interference, it righted self in a big hurry. 1929 was a different matter, as is the current recession, which is far from over, despite claims of 3 quarters of growth.

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Yeah, exactly like they do with fiat currencies right now. It's like I've always argued, commodity money doesn't have real advantages, it doesn't stop the government from printing money whenever they want.

Can you provide specifics on that, Khross? As you acknowledge, the text books all cite stats showing clear growth (and falling unemployment, for that matter) at various points during the 30s, revealing a double dip, not a continuous one.



Which policies are you referring to as "Keynesian", here? Certain aspects of the the New Deal - tariffs, tax increases, output controls, etc. - were actually precisely contrary to what Keynesian theory calls for, while others - banking reform, for example, - were neither Keynesian nor non-Keynesian. Really, the only truly "Keynesian" elements of Roosevelt's programs were the public works and deficit spending components, and from what I've read, these aren't the things most economists who criticize the New Deal object to anyway.