News of the Day

[jaydeedub]

That's a subjective graph, and considering it's not even broken down to the years and just a decades at a time... As I said before the 1st New Deal was not for that entire time that your graph shows, but yes it went down about 8% combined with the 1st and 2nd New Deals - which was FDRs first term - then it shot up a bit again. But it wasn't like it was this amazing thing that was going to go down extremely fast, it was gradually working. That thing that did make it go down extremely fast which your graph clearly points out because of the year is WWII. Then you notice after WWII it was creaping up because men were getting out of the service and replacing women in some of those factory jobs, only thing is many of those factory jobs then built things like planes, ships and bombs for the war that was no longer needed.

WWII was a great indicator of what our country CAN do. We can build and fight wars at the same time. I remember living in Europe for 3 years wondering why we don't sell American cars over there? But here they sell BMW, Mercedes, Volvos, and VWs. And believe it or not in the Middle East they couldn't get enough of our big American trucks and SUVs. The Saudi's for one LOVED them because of the harsher conditions over there.

I just think its going to take more time than everyone is hoping. It really is a world economy now thanks to the markets and technology being in everything and letting people know instantly what's happening from an iphone 5 being left in a bar or Bernanke farting to cause the markets to drop.

[pete]

That's a subjective graph

Fine, here it is in tabular form:

http://www.u-s-history.com/pages/h1528.html

The high water mark for unemployment was 24.75% in 1933. It went down to 14.18% in 1937 (-10.57%), when Roosevelt pulled back spending and raised taxes to balance the budget. From 1937 to 1938, unemployment spiked back up to 18.91 percent (+4.73%), before Roosevelt scrapped his austerity policy. By 1941, unemployment fell from 18.91 percent down to 9.66 percent (-9.25%).

Recall, and this is important, World War II didn't begin until December 7th, 1941, so you can't really say that 1941 number was solely a product of war breaking out. In fact, war wasn't declared on the Axis until December 8th, which means there were only 23 days in 1941 where the country was in the conflict. Certainly the United States didn't reorganize and mobilize its entire industrial machine for victory in the war in those 23 days.

The reason people who love austerity as a policy hate the New Deal is because it so clearly illustrates Keynesian economics in action, with very little delay between federal spending policies and the direct impact they had on unemployment. A 10 year old can get this, which is why it's aggravating as hell that a Harvard educated Democratic president, apparently, can't.

[jaydeedub]

Much better graph lol. Though we did not fight in the war with blood from the start we did fight with our sweat by supplying the allied forces with much needed goods.

And how much did FDR's New Deals programs cost? 20 billion or so? That's something like 300 TRILLION in today's money! There's no way in hell Congress would let that fly. The Recovery Act was 700 billion or so... sounds like a bunch but not really in comparison.

Though I don't think 300 Tril is needed, probably more then 700 billion + tax reform + culture and political reform. Many of those New Deal programs were the factory (Industrial Act) and construction of roads and other transportation infrastructure (Work Progress Administration). These are different times now. What type of jobs in mass should (and would) American’s do? The “would” because those factory type jobs just are not the same anymore. Car plants are mostly all being converted to robotics. Other’s are being downsized to save money and doing more with less (my Uncle works in the GE locomotive plant (aka GE Transportation) and I get an ear full from him). Plus its hard for someone who’s been doing the same thing for 20/30 years to give up on what they’ve always done and retrain for a new field. Because I’ll tell you, if the GE Transportation Plant goes, my Uncle is SOL because all he knows is how to make “choo-choo’s”. And worst of all, most things are being done overseas by workers who don’t get paid squat and it just gets shipped back to here as an import.

At this point its just going to take time. Maybe 4/5 more years, maybe a decade. I just hope I don’t get cut from MY job.

What is startling is the ship building industry. Almost all of the building of new ships and the repairing of already built ships is done overseas. All you have to do is go to a site like www.boatnerd.com and read the news reports about ships being towed to China for their repairs.

It is sad and this jobs plan does nothing that will jump start our future. Washington has to create a level playing field so companies will stop taking their jobs and their work out of the USA. If they don't address this issue our country will sink even lower in the world ranking.

If Obama wants his jobs plan to pass he has to allow for changes as to how we are allowed to do business world wide.

If you want to drill for oil or mine coal, fine. But add a tax to that product for RD into green energy and keep that RD here and not elsewhere like GE has done.

[pete]

Though we did not fight in the war with blood from the start we did fight with our sweat by supplying the allied forces with much needed goods.

Agreed, although we were selling a lot of surplus World War I equipment rather than manufacturing new boats, planes, and tanks. That didn't ramp up until 1942.

And how much did FDR's New Deals programs cost? 20 billion or so? That's something like 300 TRILLION in today's money!

There's conflicting information about the size and inflation adjusted value of the New Deal online. I've seen a few sites quoting $32 billion which adjusts to approx. $500 billion in today's money, which is less than the cost of the Iraq War.

http://www.slideshare.net/guestc83c2...w-deal-2889490

The Recovery Act was 700 billion or so... sounds like a bunch but not really in comparison.

Krugman et al thought approximately $1.5 trillion was needed, and the stimulus needed to be targeted toward things like infrastructure projects that have the most stimulative impact.

I think the striking thing is how much more efficient the government was in the 1930's at dispensing funds so they would have the desired stimulative effect. It was less taboo for government to take a managerial stance then, whereas now everyone in government is terrified of being labeled a socialist and therefore shies away from any sort of hands on approach to making sure spending is done appropriately. FDR didn't shy away from even using the military to mobilize for public works projects and put people to work. If we did that today, Obama would be accused of creating Stalinist forced labor camps because he chose not to throw that money into the public sector. Of course, even the military is semi-privatized these days, at least on the logistical end, so even there we'd be paying higher overhead on those public works projects than we did in the 30's.

Government has allowed its ability to manage anything to atrophy to the point that its incapable to implement stimulus efficiently, which leaves us in a bad spot where we have no one to effectively administer the kind of policies we need to get out of the hole.

[BurnTHalO]

Originally Posted by jaydeedub

Much better graph lol. Though we did not fight in the war with blood from the start we did fight with our sweat by supplying the allied forces with much needed goods.

And how much did FDR's New Deals programs cost? 20 billion or so? That's something like 300 TRILLION in today's money! There's no way in hell Congress would let that fly. The Recovery Act was 700 billion or so... sounds like a bunch but not really in comparison.

Though I don't think 300 Tril is needed, probably more then 700 billion + tax reform + culture and political reform. Many of those New Deal programs were the factory (Industrial Act) and construction of roads and other transportation infrastructure (Work Progress Administration). These are different times now. What type of jobs in mass should (and would) American’s do? The “would” because those factory type jobs just are not the same anymore. Car plants are mostly all being converted to robotics. Other’s are being downsized to save money and doing more with less (my Uncle works in the GE locomotive plant (aka GE Transportation) and I get an ear full from him). Plus its hard for someone who’s been doing the same thing for 20/30 years to give up on what they’ve always done and retrain for a new field. Because I’ll tell you, if the GE Transportation Plant goes, my Uncle is SOL because all he knows is how to make “choo-choo’s”. And worst of all, most things are being done overseas by workers who don’t get paid squat and it just gets shipped back to here as an import.

At this point its just going to take time. Maybe 4/5 more years, maybe a decade. I just hope I don’t get cut from MY job.

How about a national high-speed rail opperation?

[jdhebner]

Originally Posted by pete

There's conflicting information about the size and inflation adjusted value of the New Deal online. I've seen a few sites quoting $32 billion which adjusts to approx. $500 billion in today's money, which is less than the cost of the Iraq War.

Pete and JDW: Might I suggest the comparison as a percentage of of GDP/GNP? Here is a link of approximate GDP/GNP over the last few decades. GDP was around 100 Billion in 1940, it is 12,000 billion today.

[jaydeedub]

Originally Posted by pete

Government has allowed its ability to manage anything to atrophy to the point that its incapable to implement stimulus efficiently, which leaves us in a bad spot where we have no one to effectively administer the kind of policies we need to get out of the hole.

But which branch of government is more to blame for it? There was no CBO or OMB during FDR's time. All there was in place was the GAO and that agency is much different now thanks largely to technology than it was back then. My vote goes to Congress because it seems no matter what they are dead set on just not working with a President that is not what the Majority's polictical affiliation. I wonder if Germany's legislature has the same sort of problems or not since they have mulitple (4 or 5 I believe) parties filling those seats.

[RANT]
The reason why Congress bothers me so freaking much is that yes, I understand you were voted in by those of your respective State or Distict - and you do represent them - BUT you were voted into the U.S. Congress, therefore you have an obligation to the greater good of the entire country, not just those who voted them in. If they wanted to play it that way then run for your State Legislature.
[/RANT]

Originally Posted by BurnTHalO

How about a national high-speed rail opperation?

I'm all for it. (though I know a governor who is not!) It pretty much takes the same amount of time for my wife to drive up to here (Norfolk, VA) instead of flying from Jax AND costs less than flying. Now if there was a reliable high-speed rail system that would get her and my daughter up here for the same cost of driving I'd be all for it since it would be much easier on them. We used rail (higher speed - Italy high speed was not equal to France's) in Europe all the time. It was just a normal thing and was used in high amount, even though Europe is much smaller than the States.

[Sotnos]

Originally Posted by jaydeedub

My vote goes to Congress because it seems no matter what they are dead set on just not working with a President that is not what the Majority's polictical affiliation. I wonder if Germany's legislature has the same sort of problems or not since they have mulitple (4 or 5 I believe) parties filling those seats.

I doubt it, we're just massively complacent here combined with certain media outlets selling this as a great policy. I don't think they'd put up with such a useless congress anywhere else, the whole party would pay for it.

[BurnTHalO]

Originally Posted by jaydeedub

But which branch of government is more to blame for it? There was no CBO or OMB during FDR's time. All there was in place was the GAO and that agency is much different now thanks largely to technology than it was back then. My vote goes to Congress because it seems no matter what they are dead set on just not working with a President that is not what the Majority's polictical affiliation. I wonder if Germany's legislature has the same sort of problems or not since they have mulitple (4 or 5 I believe) parties filling those seats.

The political system over there is very interesting. By having so many political parties, no one party can be extremely polarizing (or on one side) because basically they all have to work together to accomplish things. It's not like one party can do things and the other parties then blame all problems on that one party.

I think Germany is also where parties have to team up in order to elect a head or something like that, I can't quite remember how it works, but I remember that parties have to link up and find common ground before they even start in office. Maybe it was a different country, I just remember learning a bit about it in undergrad. I'm sure there is someone that can really shed some light onto what I'm thinking. At any rate, I don't think they have the same problems, and I think a big reason why is you aren't forced into taking one party or another. This two party system is REALLY hurting us if you ask me.