"We have learned some things from comparable experiences of the 1930s' Great Depression, perhaps enough to reduce the severity of the current contraction. But we have made no progress toward putting limits on political leaders, who act out their natural proclivities without any basic understanding of what makes capitalism work."
Basically, our President is ignoring the lessons learned from history.
19 comments:
This is why I don't think economics is a science. Leading, even Nobel-prize winning, economists disagree completely.You don't find that in other fields. For example virtually all scientists in their fields support the theories of continental drift, or relativity, or evolution.
James Buchanan thinks government stimulus spending will make things worse. Paul Krugman, who also won a Nobel prize thinks the stimulus is too small. Both of these men are far smarter than you or I, so how does a layman decide? Bertrand Russell might say that when the experts disagree, a layman should suspend judgement, but as citizens and voters we must attempt to decide.
The article admits "the widely held view that Keynesian fiscal policies helped the US recover from the Depression." In other words, most economists disagree with them. So, it is not unreasonable to go with the consensus, but admittedly being in the minority position does not make them wrong. Could it be that your economists are ideological advocates of laissez-faire economics? Reading their companion article (linked at the bottom of your piece) we see that they are in favor of reducing the minimum wage, curtailing unions, and reducing regulation. No doubt you agree with them. I am skeptical.
Then what is your excuse for the global warming debate? Is that not science? They disagree completely on both sides.
Look, the point is that this administration closely resembles the policies set forth by FDR during the Great Depression which we all know prolonged it. There is no dispute on that. Right now China is worried about the fact that we are printing more cash. Will they stop lending us money or even raise the interest rate on lending to the US? Probably.
Getlive you are factually mistaken on one key point. You say that "we all know" that FDR's policies prolonged the Depression, that there is "no doubt" about that. That is what these two authors are arguing but many other economists disagree with them, in fact most. That is a fact. So it is at the very least a disputed point. I think that their position is in the minority, which in itself does not make them wrong or right. The opposing view is, as the article states, "widely held," certainly among Keynesian economists.
Yes, there are global warming skeptics among the scientific community. Their position should, and has, been heard. But there is in fact a strong consensus (over 90%, probably higher among climatologists) in the existence of anthropogenic global warming. Which is why the National Academy of Science, the Royal Society, and on and on, have a clearly established position on one side of this debate. Rhino sees this fact as part of the plot or hoax of global warming. I am apparently too "stupid" to see through the conspiracy. I hope that you will argue more intelligently than that.
There are even a handful of scientists who do not accept the theory of evolution, which is incredibly well-established. These scientists are motivated by strong religious views. Nonetheless, I have no difficulty at all in accepting the nearly unanimous consensus on evolution.
In economics there is much less of a consensus. To the extent there is any consensus, the laissez faire school seems to be in the minority, although they are popular among conservatives.
Actually to get the facts straight, it's about 50/50.
Now, you are somewhat proving my point. My point is FDR prolonged the depression, period. Look at the evidence. Clear evidence. Not speculation. The folks who debate that it didn't prolong the GD are folks who are working on economic theories, not cause and effect. Now, since you think economics is not a science and if half of the debate is split down the middle, why would this administration mimic policies that did actually prolong the Great Depression? That's like building a business model from Enron and saying that it wasn't the business model that ruined Enron so let's use the same one. Cause and effect. New Deal:Prolonged Depression. You don't have to be an economist to figure this out as much as you don't have to have an MBA to steer clear of Enron's business model.
Well, let's say economics is nowhere near an exact science. Let's say that you are right and economists are split down the middle on this. How is that "no dispute"? That's "a lot of dispute." You are asserting as fact what you are attempting to prove, based on the opinions of some economists. Other economists disagree. Paul Krugman disagrees, and he won a Nobel Prize too.
At best you have made a case that we should both suspend judgement.
There is no dispute because the half on my side are using cause and effect via facts. Your side is pure theory and speculation. I side with the facts. You can speculate all you want.
In other words you think that the other side is wrong. Paul Krugman's interpretation of the facts is that FDR's policies were stimulating the economy for the first few years, that after a few years he was persuaded to cut spending and balance the budget, leading to another economic collapse, and that finally massive government spending (aka the second world war) ended the depression. The exact opposite really of your view. Now you might be right and Krugman wrong (although I doubt it), but he did win a Nobel Prize for Economics, which doesn't necessarily make him right but it does make him smart.
You are assuming that the half of economists who disagree with you (probably higher) are only arguing theory not actual data. Now, I don't read economics journals but I'm sure that Krugman and others know the data.
Um, yea. Krugman is a liberal. And we all know liberals make up their own facts. How many times do I have to say it? Krugman don't know jack. algore won a nobel prize too and he is a jackass. That's why you have all the facts wrong, you keep listening to the left.
Al Gore won a the Nobel Peace Prize. Krugman for economics. As did Milton Friedman. I could say you have all the facts wrong, you keep listening to the right. Also conservatives make up their olwn facts. We're at an impasse, perhaps a good place to stop.
OK, smart guy, here's some homework. Answer me these 3 questions:
1. Why did FDR break up the strongest banks?
2. Why did policies make it more expensive for companies to hire people?
3. Why did the policies push up the cost of living?
Google this quote:
"...the New Deal was not a recovery program, or at any rate not an effective one."
Talk to me when you have a clue.
I'll pass on the homework assignment but I did google the quote. Looks like it's from a book "FDR's Folly" by a libertarian historian. I haven't read it. I think we've established that economists and historians are split on FDR's economic policies, largely on political and ideological lines.
Of course you'll pass because you don't want to educate yourself on the subject. You would rather take the opinions of others in lieu of formulating your own educated one. I'm done on this.
I am a moderate liberal who reads both conservative and liberal authors and makes an honest effort to form educated opinions. Rhino is a rightwing idealogue who only reads material that supports his position. I'm not sure about you yet. What liberal authors or sources to you read?
sorry i'm late boys. busy day.
OK. gary you're right about the quote. great book. You should read it but you won't.
you're also correct about economics not being an exact science. in fact it's more of a social science. too many variables.
However gary you're wrong and getlive is right with regard to FDR prolonging the GD.
it was the new deal anti competition/pro labor laws that kept us in an economic slump.
He artificially raised wages, strengthened unions,artificially raised consumer prices,nationalized utilities and other industries,CREATED monopolies,etc.
Many studies have been done. I'm not talking editorials, like what krugman produces, i'm talking actual studies by serious academics.
i have read 2 different books on the subject as well as numerous studies and editorials. contrary to what you believe i've even read krugman. i read the age of diminshed expectations which was one of his first books and i knew then that he was a socialist. Since then i read his bullshit in the times once in a while but he's not denying who he is or what his agenda is. He's intelectually dishonest because he's driven by a failed ideology.
in other words he's lying. or he's just suffering from cognitive dissonance. Either way he's wrong.
to paraphrase milton friedman's question to ted kennedy "socialism has failed everywhere it's ever been tried for 6000 years of recorded history, why do you keep trying to argue in favor of it?"
Hi Rhino. Better late than never. I haven't yet read any of Krugman's books, although "Conscience of a Liberal" is on my list. I don't think though that he just writes op-ed pieces. He must have published serious studies in economics journals, I mean he won a Nobel Prize, and unlike the Peace Prize, I think someone really needs to have made significant contributions to do that. Now I do not subscribe to economic journals as I'm not an economist, and they are very technical and too many numbers and statistics hurt my brain.
Speaking of books, let me recommend one, that I borrowed from a friend. "The Healing of America" by T.R. Reid. It compares the American healthcare system to those of Canada, England, France, Germany and Japan. I'm curretly reading the chapter on France, and their system seems to work fairly well. They spend less than half what we do per capita, cover everybody, and have better statistics than we do on measures like life expectacy, infant mortality, etc. Now, I recall that you linked to an article recently that said that part of their savings is they spend less on drugs and the drug companies pass that on to us. That may be true, but it's only a small part, they have lower administrative costs, etc, and to my way of thinking it's an argument to adopt at least some aspects of the French system. Anyway, its a good book and very informative.
I may read "FDR's Folly" but if I do I will find a good history that argues the opposing view as well, and then make my own determination.
I agree with you that Socialism doesn't work. It didn't work in Eastern Europe or the USSR. But unlike you I don't class liberal, social democracies (France, England, Japan, etc) as socialistic just because they offer universal healthcare. Those systems, imperfect as they are, do work, and better than ours, at least on healthcare. But our country will make it's policy decisions democratically (one hopes) and of course Obama ran on healthcare reform and won. Despite the opposition of Conservatives and Republicans, if Obama doesn't get healthcare reform I may not vote for him in 2012. Our current system is a travesty. My own sister lived without health insurance for ten years (and she had a child) because her employer didn't offer it and didn't pay enought for her to afford it on her own. And even people with insurance may find claims denied and policies cancelled if they have the nerve to actually use them in the event of catastrophic illness or accident. It happens.
I realize that as a conservative it's pretty much your job or role in history to oppose reform. I get that and it's an important role. But it's also the role of the conservative historically to lose. Conservatives opposed civil rights, Medicare, Social Security, the vote for women, and on and on, and in the end they lost. Do you realize that England adopted national healthcare in 1948, around the same time the Democrats advocated Medicare for everyone? Now of course we are the ONLY major country not to have some form of universal heathcare, and we spend twice as much per capita to achieve that.
i'm sure krugman has done some serious work. that's not the point. he's a socialist. that doesn't mean he's not intelligent, it means he believes he has the answers to make socialism work where everyone else has failed. just like ted kennedy who famously answered friedmans question by saying "socialism has failed for 6 thousand years because they didn't have ME to run it for them" - look it up. it's true.
the french healthcare system is NOT better than ours and if you take out accidents (mostly auto)the life expectancy here is higher.plus we have a better chance than any other country of surviving a heart attack, most types of cancer, etc. i've done a lot of homework on this and can cite multiple studies but you can find it yourself with google.
our health care system does not need to change. we have the best doctors,nurses,technology,drugs,etc. in the world.
Our health INSURANCE system needs some tweaking to cover the 10 million or so people who have slipped through the cracks. the trick is to find a way to do that without ruining what we have. a public "option" would eventually be the only option and would ruin our current system.
finally, we are the world leaders not the world followers. you say we are the only country without some form of universal healthcare and i say let everyone else emulate us!
Never read Krugman but uses him as a reference for shaping his ideas...hmmmm
A lot of people in this country say that we should adopt some aspects of the healthcare systems of Canada or France, etc. Everyone in those countries bitch and moan about their system (human nature) but generally like it, and no one in those countries advocates emulating the US. Pay more for a system that doesn't cover everyone?
Now it's 10 million uninsured, before you said 13. Actually even the article you linked to a while back said 45, they just argued that all but 13 million of those could, in their view, afford insurance.
We have a good system in some respects sure. If you have cancer (and good insurance) this is a good place to be. On the other hand millions die every year because they don't have health insurance, some from treatable diseases like diabetes or lupus. I know you've done some homework on this subject, and have statistics, etc, but mostly from conservative sources I suspect. Read "The Healing of America". I hadn't planned to, it looked dull, but someone gave it to me and I'm very impressed so far.
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