FDR Economist Says Obama Should

Quote from rubibond007:

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Really?
The FDIC?
Social Security?
That would be news to most historians.

A little common sense folks: do you think FDR was elected because what happened before solved everything?
Do you think Keynes became famous because the economists who preceded him, and their theories, actually worked in the real world?
Austrian economics is out on the fringe for a simple reason: it doesn't explain the mechanics of the real world, and its alleged solutions don't work. Regardless of the revisionism, Hoover had basically his entire term to fix the economy, as much time as any Prez could hope for. He failed. He failed because these theories explain nothing and solve nothing.
 
Quote from trefoil:

Really?
The FDIC?
Social Security?
That would be news to most historians.

A little common sense folks: do you think FDR was elected because what happened before solved everything?
Do you think Keynes became famous because the economists who preceded him, and their theories, actually worked in the real world?
Austrian economics is out on the fringe for a simple reason: it doesn't explain the mechanics of the real world, and its alleged solutions don't work. Regardless of the revisionism, Hoover had basically his entire term to fix the economy, as much time as any Prez could hope for. He failed. He failed because these theories explain nothing and solve nothing.
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Sweden embraced Keynesian economics to a greater degree than the US did, and it emerged from the Great Depression long before the US.

Belief in the efficacy of Austrian economics, rather, is based more on ideology than on reality. All of the evidence in the world that Keynes' ideas actually worked will do nothing to change the minds of those who are convinced otherwise.
 
You do not need an econ degree (which I have) to understand facts. You just need to acknowledge them.

Our assets were overvalued. The service and financial and real estate sectors were very bloated and our pe ratios were high because capital was cheap.

Capital was cheap because China pegged the currency and imbeciles were selling insurance they could not stand behind. So you could borrow capital very inexpensively.

Once you accept the fact that absent some new productivity enhancing technology we are not really in a recession from old levels,,,, we are on our way down to real levels.

massive spending on banks and pork is only ruining our future.
 
Quote from trefoil:

Really?
The FDIC?
Social Security?
That would be news to most historians.

A little common sense folks: do you think FDR was elected because what happened before solved everything?
Do you think Keynes became famous because the economists who preceded him, and their theories, actually worked in the real world?
Austrian economics is out on the fringe for a simple reason: it doesn't explain the mechanics of the real world, and its alleged solutions don't work. Regardless of the revisionism, Hoover had basically his entire term to fix the economy, as much time as any Prez could hope for. He failed. He failed because these theories explain nothing and solve nothing.
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Unbeknown to most idiots, FDR simply continued the bailouts that Hoover started... and it never worked for either of them. Six years into FDRdom the country had twenty percent unemployment. All FDR accomplished was to broaden the voter base for Democrats. Blacks had been Republicans up until that time, after they got bailout money in equal amounts of whites under FDR, hell yeah, they switched to Democrats and never looked back... Bailouts suppress the economy. The time for the recovery was not in Hoover's era, it would have recovered on it's own in FDR's era but he was stimulating Democrats all over the place and didn't care about the economy that much. What you are saying is Hoover didn't do it in the couple years he had but under FDR things got better..... huh? FDR had eight years and things weren't better by much at all, that is the reality of it... you don't need an economist to see that if you take tax money out of the public sector, run it through the hands of the politicians and spend it to create public sector jobs that innovation and hard work are being short changed and your productivity is lowered....
 
Quote from Fractals 'R Us:

FDR had eight years and things weren't better by much at all, that is the reality of it...
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LOL. Unemployment went down 40%, the stock market increased even more just in 1933, and economic output increased significantly. The evidence is overwhelming, but you are free to ignore it all you want.

It was only when FDR tightened spending in 1937 that the economy hit a bump.
 
Quote from Fractals 'R Us:

Unbeknown to most idiots, FDR simply continued the bailouts that Hoover started... and it never worked for either of them. Six years into FDRdom the country had twenty percent unemployment. All FDR accomplished was to broaden the voter base for Democrats. Blacks had been Republicans up until that time, after they got bailout money in equal amounts of whites under FDR, hell yeah, they switched to Democrats and never looked back... Bailouts suppress the economy. The time for the recovery was not in Hoover's era, it would have recovered on it's own in FDR's era but he was stimulating Democrats all over the place and didn't care about the economy that much. What you are saying is Hoover didn't do it in the couple years he had but under FDR things got better..... huh? FDR had eight years and things weren't better by much at all, that is the reality of it... you don't need an economist to see that if you take tax money out of the public sector, run it through the hands of the politicians and spend it to create public sector jobs that innovation and hard work are being short changed and your productivity is lowered....
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Hoover had pretty much his entire term, not the "couple of years" you so artfully try to minimize it down to. By the time FDR got in, there was no confidence at all in the banking sector. The first and most important thing he did was to clean that sector out and get confidence back, and then keep it there via the FDIC.
Hoover didn't. He didn't because he ignored the lesson of 1907: confidence is restored when people know that the banks that are left are sound. Because he didn't, the nation's private sector had ground to a halt by the time FDR came into office.
That graph published previously showed both the devastation from Hoover's inaction, and the recovery after FDR's actions.
As for the lapse back in the latter part of the thirties, everyone except the posters around here realizes that that lapse occurred because FDR tried, too soon, to get the budget back in balance. In the real world, that's a solid refutation of this nonsense that in an economic emergency you should just let the fire burn. In this place, the actual evidence of what actually happened is ignored in favor of a fairy-land ideology.
 
Something that I find people wrestle with all the time, especially in difficult subjects like economics is their need to simplify everything. The 3 things needed to get out of the recession, the 10 step plan, the 1 thing you need to do to attract women etc

Economics is complex, you need both sound theory and also empirical data. The spray and prey approach doesn't work in economics. I hope that when people embrace schools like the Austrian school or the Libertarian school they think twice if they prefer them simply because they are simple to explain and understand.

We all have a tendency to use rule of thumbs, single rules and mantras, but that's not how it works.
 
Quote from lrm21:

I don't understand how people keep comparing the 1930 crash which was a crash of the money supply to due a gold standard to the current crisis, which is an asset collapse because debt levels are unsustainable. We do not have a gold standard, we have a debt standard.


This crisis has nothing to with the 1930's other than its another excuse for the governments of the world to conduct a power grab and further erode individual liberties and property rights.

Typical fucking economic dickweed. If you want to get businesses investing remove barriers to capital. Like taxes or regulations.

Having the government take a saved dollar from private hands, rinse it through its bureaucratic anus with a its 35% cut and then give it to failing banks so they can loan it out with interest is not fucking stimulative.

I guess I need to go to oxford or Princeton to get my head lobotomized so I can understand how government is the great engine of economic growth.
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NICE - very well put.
 
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