Monte wrote:
It's a lot more insidious than that, Micheal. Not only did we know what to do, we had the resources to do it.
That's a pretty groundbreaking assertion. So, I'm curious as to what resources you think the United States has in 1929 and 1930 to avert the Great Depression. More to the point, I want you to explain to me why the Great Depression occurred in the first place and why the U.S. banking system was facing a massive liquidity crisis in 1929.
Monte wrote:
We listened to free-market "leave it be" ideologues who said it would all just work itself out naturally, and for 10 years we suffered.
You seem to think the Great Depression ended in 1939. I would like sources on this claim, because the Demand-Shifted Wartime Economy simply left the United States in its worst debt position of all time prior to the Obama Administration. More to the point, what happened during the Truman Presidency to invalidate claims of a recovery? And how did the United States finally "right the ship" as you like to say?
Monte wrote:
It didn't start getting better until the New Deal was passed. Not only did the pain not work itself out, it actually deepened and got worse. Keynes observed that reality back in the day, and suggested the proper response.
You really need to stop invoking a source you don't understand. You also need to read his responses to the Treaty of Versailles and the debts foisted upon the German State. While I might disagree with a great number of things he has said, he claims NOTHING similar to the responses you are giving here. Indeed, it is a great misprision of idiots like Tyler Cowen and Paul Krugman to state that Keynes was for the massive bailout and stimulus spending mechanisms you're so enamored of protecting.
But, since you think you know Keynes so god damned well, start giving me passage and page number citations from
A Treatise on Money. You might also want to refer to
The Economics of War in Germany and
The Economic Consequences of Peace in your response. Because, honestly, you're so far from the source you're claiming that it's embarrassing I feel the need to reply to your tripe on this subject.
Monte wrote:
it's no longer a recession. Unemployment is high, but we have had consistent GDP growth for six months. I know the free market "leave it be" ideologues on the board beg to differ, but they're simply and plainly wrong.
Well, let's see what the generic definition of a recession is ...
Quote:
In economics, a recession is a business cycle contraction, a general slowdown in economic activity over a period of time.[1][2] During recessions, many macroeconomic indicators vary in a similar way. Production as measured by Gross Domestic Product (GDP), employment, investment spending, capacity utilization, household incomes, business profits and inflation all fall during recessions; while bankruptcies and the unemployment rate rise.
Recessions are generally believed to be caused by a widespread drop in spending. Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply, increasing government spending and decreasing taxation.
Hmmmms ...
Bankruptcies are still on the rise. The Unemployment Rate continues to stagnate while the Institutional Non-Farm Workforce Contracts; or, in other words, employment is still contracting. Household incomes have been dropped for the last 14 years (mirroring a Japanese Deflationary Growth Trend). Business profits are dropping when adjusting for inflation. Inflation itself, if measure relative to the CPI (Consumer Price Index) is down. Capacity Utilization if way down. And the only claims of GDP growth comes from inventory accumulation of currently immobile durable goods. Sure, the factories still working are making cars, but those cars AREN'T SELLING. Commercial construction is through the floor; commercial lending and leveraging is currently imploding in Europe. The United States is not far behind.
Montegue wrote:
We are not in a recession anymore. Government spending got us off that path.
Really? Every normative indication of a recession being in place is still true. Even if I allow you to claim positive GDP growth (based on inventory accumulation), that's still 5 out of 6 way in the negative. We are still in a recession. Any discussion otherwise is nothing more than shilling for the failed policies of two presidents on this issue (George W. Bush and Barack H. Obama, in case you're wondering).
Monte wrote:
We have high unemployment, which means we needed to spend more, and still need to spend more.
That's not what it means at all, since the United State is well past the equilibrium point on employment and has been for at least 20 years. Declining Household Incomes through the 1990s and 2000s indicates that the labor supply exceeded demand in almost all markets despite the 5.25% average unemployment over the same time period. Consequently, if you think increasing employment NOW is going to help, you're simply delusional. The market couldn't sustain the sheer numbers of employed individuals and domestic demand for employment was shrinking over the long term BEFORE the recession. All that happened when the liquidity crisis hit was an acceleration of an existing pattern. Those people were going to be out of work sooner or later anyways. More to the point, since their jobs were primarily funded by leveraged capital, those people weren't actually contributing to GDP in the first place.
Monte wrote:
Some sort of massive public works project would do nicely.
Really? Haven't you paid attention to the last two Demand-Shift Exercises of the Obama Administration? Cash for Clunkers further depressed the domestic car market; hence, we're dealing with false claims of GDP growth on domestic inventory accumulation. And the First Time Home Buyers Tax Credit? Oh that worked out brilliantly didn't it? Record level first year defaults and foreclosures; rising foreclosures nationwide; shrinking demand for both new and existing housing; shrinking funding for unsecured development projects ...
Did you know that in some markets, even assuming peak demand, there are still 4 houses for every available family? You really need to think this out, because all a public works project will achieve is further depression of wages and labor values.
_________________
Corolinth wrote:
Facism is not a school of thought, it is a racial slur.