Three letters to consider for those who suggest that John Edwards is rich and, therefore, can’t possibly mean what he says about helping the middle class: F–D–R.
Actually, I have more respect for a guy who makes a lot of money and is willing to send it off to the IRS on principle than one who doesn’t work and thinks others should be skinned for his sake. It also bothers me that perceptions are that rich people couldn’t possibly care about the poor. Of course they can, and they come in every political party.
That said, I think that people like Edwards and Al Gore become more generally magnets for criticism not merely because they are rich, but because they are happy to back new laws that would take choices away from people, all while currently endulging in behavior that flies in the face of their stances. Well documented that both these men have luxurious mansions. I don’t bemoan them that at all. I do bemoan the green-spoken Al Gore living like a carbon footprint. Etc. Gore is far more guilty of this than Edwards, far as I can tell.
The one important thing for me is finding ways for those who are rich to give money back to the society from where they got it( profit always comes from someone else),that’s both on a corporate and individudal basis.There’s unfortunately a mindset amongst many,especially true among those who call themselves today’s’conservatives’ that ‘what you earn is what you should keep’. I am absolutely against any kind of tax reform that doesn’t allow write-offs for philanthrophy.A city such as Chicago where I lived quite a while still is able to present free summer concerts in Grant Park with the Chicago symphony orchestra and high profile guest performers principally because of huge corporate donations and endowments that can be written-off taxes. Unfortunately ,many more rural areas simply can’t attract the same amount of philanthrophy. I would like to see an expanded federal program encouraging the arts in many more rural areas areas in a kind of private-corporate agreement that writes-off some taxes.A program such as this would be consistent with capitalism in a democratic republic.Individual philantrophy has given billions to the arts and civic projects. I say thank God for the ‘enlightened’ rich,even if it is through tax write-off.
I truly fear for the performing arts in this country because they simply cannot be profitable on their own merit.That’s a negative aspect of uncontrolled capitalism.
It’s especially true of Grand Opera,one of my loves,where at 65 years old I am one of the younger set. Where will we all be in 20 years?I do not fear so much for large metropolitan areas ,and there will probably always be Opera in Chicago .But does everyone have to live a large metropolitan area just to have access to opera, theatre,and classical concerts? Also special mention for university cities in any state which are little oases of culture.
What kind of tax structure would Edwards advocate? That will be an indication what he thinks about the poor.Let’s judge him on that and let him live peaceably in private in his mansion and pay what he wants for his haircuts.
But does everyone have to live a large metropolitan area just to have access to opera, theatre,and classical concerts?
Maybe. Part of the advantage of living in dense areas is access to more things, from art to technology. Just ask all my family members that live in rual Indiana areas that CAN NOT get better than 19.2k dial up.
As for “where will be in 20 years?”, maybe there will be no more Grand Opera. Many other forms of entertainment have died in the past, and more will die in the future. Trying to support something that few want to see is doomed to fail and waste a lot of time and money in the process. I say this as someone who enjoys opera. However, I do not think everyone else should pay for my entertainment.
As to tax write-offs, I am mixed. Aren’t they a way that the government is PAYING for many things that people would totally get into a fit if the government paid for directly?
For example, the government paid (by not taxing me) for my church, my daycare, and my mortgage interest. I’m not sure why everyone is cool with the government (indirectly) paying for my church, but my guess is has something to do with the fact that those that might be against that also enjoy tax breaks for things like the arts.
Another case for flat-tax (or fair tax). Get rid of the IRS and we’ll all end up with more money in the government…maybe then we can start paying off that debt.
For my part, I think profit comes from a mix of things. In the good cases, it’s generally a matter of improving upon and adding to the resources that already exist – then trading the new service, creation, whatever in a way that’s advantageous to both parties to the transaction. Ideally, the entrepreneur or businessperson is expanding the pie. But, there has to be a recognition that the pie was there to be expanded upon.
And, frankly, there are bad cases where the pie is mined rather than grown, enriching one at the expense of others. (To really mix up some metaphors.)
Parker,
yes, I think profit is a working project of many people,but some people benefit more than others,depending on how any system is set up. Unrestrained capitalism favors one segment.A strong central government with more controled profits and benefits as I experienced when I spent time in France is another system,and each system has different winners and losers,all by design. We can argue who deserves more and how any system should be set up and how much of the circulating money should be funneled into profit or into benefits for producers of wealth down the line and then we can also argue and discuss which is the best way etc.But absolutely..profit is money and comes from joint effort of many people who work together to produce so it has potential joint ownership,depending on who has rights to divide up the assets..
More specifically I see most of our ecomomic concerns stemming from the Reagan era and deregulation. Goverment deregulation has stripped away government safeguards for everyone except those who initially invest to produce profit and profit has become an abolute goal,with absolute ownership.Deregulation meant downsizing during Clinton era, outsourcing during Bush adminstration and now we have to have dirt cheap labor coming in, illegally or otherwise ,just to keep our system going competitively,so the investors tell us.Where is this country going?
Hopefully I get some feed back on these views.
Feedback? I suggest ‘Eat the Rich’ by P.J. O’Rourke. He may not be your ideological cup of tea, but he makes economics more interesting than most graduate level courses, in the context of some fascinating travel writing.
One concept that I remember:
“Wealth is created when resources are moved from lower-valued uses to higher-valued uses.”
Of course, the connection between wealth creation and profit is not always straightforward.
Side note: working for a Big Six consulting firm (back when there was a Big Six), I upset the senior managers and partners by pointing out that the Marxist definition of profit was that it was all “uncompensated labor”.
I don’t believe that to be a true definition – but it was true enough in their context to make them deeply uncomfortable!
(This also explains why I will never work in that area again…)
Parker,
Thanks for your answer.Ill have to remember ‘uncompensated labor’ as a good starting point to discuss what ‘profit’ is.I’ll admit to not being much an intellectual, in the sense thatI can argue theory vs theory,Ayn Rand vs Karl Marx,etc.but Both have been greatly undermined by the excesses of their committed followers.And it’s always dismaying to be categorized as a ‘socialist’it sound so anti-american.You didnt categorize me that way except to put my views into a Karl Marx perspective. Don’t you think karl Marx would think diffently today than when he wrote his treatise on unbridled capitalism? At the time he wrote,working conditions were abomidable . In the Bolshevik Revolution which side would I have taken? It wouldn’t have depended on which books I had read,that much Im sure of.
By why does this country need dirt-cheap labor to be competitive in the world? And in today’s ecomomics what good is a booming stock market unless you specifically own stocks and investments and live off dividends? What happened to the ‘blue collar’living wage that I grew up with? Nothing has replaced it that I can see.I kind of figured out back in Clinton administration that each time a business downsized , profits went up , the stock market rose and dividends grew.Big deal!
My bottom line is that there is so much wealth,so much profit and so much in wages.It will be divided up somebody and it wont be by by accident… .But now profit is divided into dividends before its divided into wages.And from my reckoning dividends and profit go to the same group of people.How do we get the whole ecomonic system to flow freely from the source to the sea? One way to judge the success of an economy is to start at the bottom ,the ones who are most vulnerable.Ive lived in France periodically and a couple times I roomed in public housing with French families..These were factory workers basically with many foreigners and uneducated.They all had health insurance,they all had day care for their children when they worked,and most had a plot of land where they could grow vegetables in the summer ( this is probably ‘French thing’ though),and they alal had free public education. I already know the retort: yeah, but that’s socialism and we don’t want that! But experience as well as intellectualism gives rise to insights to what is possible,and should at least start a free discussion.
As I understand the Great Depression,it was lack of government oversight of corporate america that allowed it to happen. Everyone expected the Government to step in and do something,when business failed. All we had left was government to bail us out,but all that there was to do was cast safety nets,and hope for recovery.(Maybe outsourcing could have helped ,but then many of us would be foreigners now.) The Depression followed by WW2 was my parents’ generation and I remember them fearing a return of Depression times after ww2.Jobs and housing were very scarce,getting gradually better through the 1950s.The 1950s,was marked by neighbors packing up and moving to California,so even then it was a continuation of sorts of the Grapes of Wrath saga.I’m not sure how the the ‘Aynrandians’have re-written the Depression years,but it wasn’t FDR who made it happen,and ww2 was a temporary economic boost at great personal cost with great societal upheavel. The FDR era did give us some insight to the importance and limitations of government which is most effective as a deterrent to economic disaster,not as a solution.
If nothing else, FDR redistributed wealth enough to keep desperate people from simply banding together to take it or rallying around a strongman who promised them the moon. The middle class would not have fared nearly so well under a Lenin or Hitler.
I’m not seeing how FDR lengthened & deepened the Great Depression, which was a world-wide event. No, his policies & programs by themselves didn’t end it, but at the very least they kept the USA from slipping into complete anarchy…as Doug hints at there were plenty of neo-fascists & communists in the USA in the 1930s who would have taken advantage of that. And there has not been another depression in over 70 years now, whereas before the establishment of such things as the SEC, the FDIC, labor regulations, & Social Security they used to come about like clockwork in the US. I think those programs are the primary reason economic recessions don’t degrade into all-out depressions any more…
The article begins by noting that Newt Gingrich–Newt Gingrich!!!–loves FDR. So did Reagan. So I’m guessing that the view of FDR as having been bad, evil, made things worse, etc., are very much out of the mainstream…
From my poking around, the idea that FDR made things worse (with regard to the Great Depression) has a reasonable amount of acceptance – that he was evil, not so much.
I think his effectiveness and success as a war leader make it much harder to judge his earlier terms objectively, as does the fact that he fell into poor health and died while in office – the parallel with Moses dying in sight of the Promised Land is one that has been made.
It may be that the interventionist approach he is criticized for during the Great Depression became just what was needed during a major war – that is, the times became suited to his approach to government, rather than his approach to government becoming suited to the times.
While I think there may be lessons to be learned here about the role of government in the economy, I’m not going to criticize someone posthumously when they had such a large hand putting WWII in the ‘win’ column.
Glenn- The thought may be well out of the mainstream, but that does not make it untrue. Indeed, the GOP has embraced big government, and in fact, to the extent that would have made FDR blush.
There is truth in what Doug points to with government as a stabilizer. It certainly can have that effect. It also has the effect of stabilizing against huge sustained booms. My opinion is that people tend to see this phenomenon so as to suit themselves.
I guess I’ll blog on this soon as a topic of interest soon. One can make a reasonable (although quite debatable) case about Roosevelt’s economic policies from a political angle. But government policy was an almost unmitigated failure as economics– theoretically and empirically. The extent to which this is true is somewhat debatable– extending the Depression to just treading water– but it is absolutely clear that FDR’s (and Hoover’s similar) policies were not helpful to the economy. (As a statistical factoid, the unemployment rate in the 7th year of FDR’s “New Deal” was 19%…hardly a success!)
I.e., unemployment dropped from about 24% to 14% from 1933-1937; GDP increased an average of 5.2% annually from 1933 to 1939, better than the Reagan years (although the hole was so deep, this wasn’t enough to end the Great Depression). I imagine you would take issue with this author stating that the reason for the backslide in unemployment in 1937-38 up to 19% was FDR’s backing off of deficit government spending…Bottom line is, not everything FDR tried worked, & he was the first to admit that, but I think a lot of it did. More specifically, massive government intervention in a time of economic crisis can, if nothing else, alleviate human suffering rather than waiting around for a “natural” market correction. And I, personally, have no desire to go back to the “olden days” of no SEC, no NLRB, no FDIC, no SSA…and neither do the vast majority of Americans on the left, right, or in the middle…
Glenn, the link has some good info but some significant deficiencies as well.
He understates Smoot-Hawley’s impact– as is clear by his later reference to international trade dropping by 2/3rds.
“Even this is compensated for by the fact that American businesses are no longer investing in Europe, but keeping their money stateside.” Here, he repeats a common Keynesian flaw about “purchasing power” (see: my reference to the benefit of higher prices). Reducing mutually beneficial trade cannot be good for an economy.
“The consensus of modern economists is that the tariff made only a minor contribution to the Great Depression in the U.S., but a major one in Europe.” This assumes that intl trade played a much bigger role there than here. I don’t know the numbers on that off-hand, but that seems quite unlikely.
His entry in 1931 implies that Hoover was inactive. While less so than FDR, Hoover was quite the interventionist as well.
The 1934 reference to Sweden is obviously simplistic (what else did they do or not do) and seems to imply a Keynesian bias (deficit spending, by itself, fixed the problem).
How did (or rather, how could) FDR’s policies work in terms of economics (not just politics)? Artificially increasing costs and prices? Higher taxes? (Note that a discussion about whether these are desirable today is a different matter than whether they helped or hurt in terms of ending the Depression.) Shuffling money from some to others? How are any of these helpful in promoting productive activity?
Again, you can’t reasonably accuse the market *by itself*, because we didn’t wait for the market to fix itself. The govt was quite busy intervening from 1929 forward. And why would one expect an unregulated market to only reduce unemployment to 19% after 7 years?
FDR politically, ok…but economically? He’s fortunate to have had Keynesianism stay in repute through the 1970s and to have his friends write the bulk of the history.
Actually, I have more respect for a guy who makes a lot of money and is willing to send it off to the IRS on principle than one who doesn’t work and thinks others should be skinned for his sake. It also bothers me that perceptions are that rich people couldn’t possibly care about the poor. Of course they can, and they come in every political party.
That said, I think that people like Edwards and Al Gore become more generally magnets for criticism not merely because they are rich, but because they are happy to back new laws that would take choices away from people, all while currently endulging in behavior that flies in the face of their stances. Well documented that both these men have luxurious mansions. I don’t bemoan them that at all. I do bemoan the green-spoken Al Gore living like a carbon footprint. Etc. Gore is far more guilty of this than Edwards, far as I can tell.
The one important thing for me is finding ways for those who are rich to give money back to the society from where they got it( profit always comes from someone else),that’s both on a corporate and individudal basis.There’s unfortunately a mindset amongst many,especially true among those who call themselves today’s’conservatives’ that ‘what you earn is what you should keep’. I am absolutely against any kind of tax reform that doesn’t allow write-offs for philanthrophy.A city such as Chicago where I lived quite a while still is able to present free summer concerts in Grant Park with the Chicago symphony orchestra and high profile guest performers principally because of huge corporate donations and endowments that can be written-off taxes. Unfortunately ,many more rural areas simply can’t attract the same amount of philanthrophy. I would like to see an expanded federal program encouraging the arts in many more rural areas areas in a kind of private-corporate agreement that writes-off some taxes.A program such as this would be consistent with capitalism in a democratic republic.Individual philantrophy has given billions to the arts and civic projects. I say thank God for the ‘enlightened’ rich,even if it is through tax write-off.
I truly fear for the performing arts in this country because they simply cannot be profitable on their own merit.That’s a negative aspect of uncontrolled capitalism.
It’s especially true of Grand Opera,one of my loves,where at 65 years old I am one of the younger set. Where will we all be in 20 years?I do not fear so much for large metropolitan areas ,and there will probably always be Opera in Chicago .But does everyone have to live a large metropolitan area just to have access to opera, theatre,and classical concerts? Also special mention for university cities in any state which are little oases of culture.
What kind of tax structure would Edwards advocate? That will be an indication what he thinks about the poor.Let’s judge him on that and let him live peaceably in private in his mansion and pay what he wants for his haircuts.
Maybe. Part of the advantage of living in dense areas is access to more things, from art to technology. Just ask all my family members that live in rual Indiana areas that CAN NOT get better than 19.2k dial up.
As for “where will be in 20 years?”, maybe there will be no more Grand Opera. Many other forms of entertainment have died in the past, and more will die in the future. Trying to support something that few want to see is doomed to fail and waste a lot of time and money in the process. I say this as someone who enjoys opera. However, I do not think everyone else should pay for my entertainment.
As to tax write-offs, I am mixed. Aren’t they a way that the government is PAYING for many things that people would totally get into a fit if the government paid for directly?
For example, the government paid (by not taxing me) for my church, my daycare, and my mortgage interest. I’m not sure why everyone is cool with the government (indirectly) paying for my church, but my guess is has something to do with the fact that those that might be against that also enjoy tax breaks for things like the arts.
Another case for flat-tax (or fair tax). Get rid of the IRS and we’ll all end up with more money in the government…maybe then we can start paying off that debt.
Lou –
Is that really what you believe?
For my part, I think profit comes from a mix of things. In the good cases, it’s generally a matter of improving upon and adding to the resources that already exist – then trading the new service, creation, whatever in a way that’s advantageous to both parties to the transaction. Ideally, the entrepreneur or businessperson is expanding the pie. But, there has to be a recognition that the pie was there to be expanded upon.
And, frankly, there are bad cases where the pie is mined rather than grown, enriching one at the expense of others. (To really mix up some metaphors.)
Parker,
yes, I think profit is a working project of many people,but some people benefit more than others,depending on how any system is set up. Unrestrained capitalism favors one segment.A strong central government with more controled profits and benefits as I experienced when I spent time in France is another system,and each system has different winners and losers,all by design. We can argue who deserves more and how any system should be set up and how much of the circulating money should be funneled into profit or into benefits for producers of wealth down the line and then we can also argue and discuss which is the best way etc.But absolutely..profit is money and comes from joint effort of many people who work together to produce so it has potential joint ownership,depending on who has rights to divide up the assets..
More specifically I see most of our ecomomic concerns stemming from the Reagan era and deregulation. Goverment deregulation has stripped away government safeguards for everyone except those who initially invest to produce profit and profit has become an abolute goal,with absolute ownership.Deregulation meant downsizing during Clinton era, outsourcing during Bush adminstration and now we have to have dirt cheap labor coming in, illegally or otherwise ,just to keep our system going competitively,so the investors tell us.Where is this country going?
Hopefully I get some feed back on these views.
Lou –
Feedback? I suggest ‘Eat the Rich’ by P.J. O’Rourke. He may not be your ideological cup of tea, but he makes economics more interesting than most graduate level courses, in the context of some fascinating travel writing.
One concept that I remember:
Of course, the connection between wealth creation and profit is not always straightforward.
Side note: working for a Big Six consulting firm (back when there was a Big Six), I upset the senior managers and partners by pointing out that the Marxist definition of profit was that it was all “uncompensated labor”.
I don’t believe that to be a true definition – but it was true enough in their context to make them deeply uncomfortable!
(This also explains why I will never work in that area again…)
Parker,
Thanks for your answer.Ill have to remember ‘uncompensated labor’ as a good starting point to discuss what ‘profit’ is.I’ll admit to not being much an intellectual, in the sense thatI can argue theory vs theory,Ayn Rand vs Karl Marx,etc.but Both have been greatly undermined by the excesses of their committed followers.And it’s always dismaying to be categorized as a ‘socialist’it sound so anti-american.You didnt categorize me that way except to put my views into a Karl Marx perspective. Don’t you think karl Marx would think diffently today than when he wrote his treatise on unbridled capitalism? At the time he wrote,working conditions were abomidable . In the Bolshevik Revolution which side would I have taken? It wouldn’t have depended on which books I had read,that much Im sure of.
By why does this country need dirt-cheap labor to be competitive in the world? And in today’s ecomomics what good is a booming stock market unless you specifically own stocks and investments and live off dividends? What happened to the ‘blue collar’living wage that I grew up with? Nothing has replaced it that I can see.I kind of figured out back in Clinton administration that each time a business downsized , profits went up , the stock market rose and dividends grew.Big deal!
My bottom line is that there is so much wealth,so much profit and so much in wages.It will be divided up somebody and it wont be by by accident… .But now profit is divided into dividends before its divided into wages.And from my reckoning dividends and profit go to the same group of people.How do we get the whole ecomonic system to flow freely from the source to the sea? One way to judge the success of an economy is to start at the bottom ,the ones who are most vulnerable.Ive lived in France periodically and a couple times I roomed in public housing with French families..These were factory workers basically with many foreigners and uneducated.They all had health insurance,they all had day care for their children when they worked,and most had a plot of land where they could grow vegetables in the summer ( this is probably ‘French thing’ though),and they alal had free public education. I already know the retort: yeah, but that’s socialism and we don’t want that! But experience as well as intellectualism gives rise to insights to what is possible,and should at least start a free discussion.
how did FDR help the middle class– by extending and deepening the Great Depression?
As I understand the Great Depression,it was lack of government oversight of corporate america that allowed it to happen. Everyone expected the Government to step in and do something,when business failed. All we had left was government to bail us out,but all that there was to do was cast safety nets,and hope for recovery.(Maybe outsourcing could have helped ,but then many of us would be foreigners now.) The Depression followed by WW2 was my parents’ generation and I remember them fearing a return of Depression times after ww2.Jobs and housing were very scarce,getting gradually better through the 1950s.The 1950s,was marked by neighbors packing up and moving to California,so even then it was a continuation of sorts of the Grapes of Wrath saga.I’m not sure how the the ‘Aynrandians’have re-written the Depression years,but it wasn’t FDR who made it happen,and ww2 was a temporary economic boost at great personal cost with great societal upheavel. The FDR era did give us some insight to the importance and limitations of government which is most effective as a deterrent to economic disaster,not as a solution.
If nothing else, FDR redistributed wealth enough to keep desperate people from simply banding together to take it or rallying around a strongman who promised them the moon. The middle class would not have fared nearly so well under a Lenin or Hitler.
I’m not seeing how FDR lengthened & deepened the Great Depression, which was a world-wide event. No, his policies & programs by themselves didn’t end it, but at the very least they kept the USA from slipping into complete anarchy…as Doug hints at there were plenty of neo-fascists & communists in the USA in the 1930s who would have taken advantage of that. And there has not been another depression in over 70 years now, whereas before the establishment of such things as the SEC, the FDIC, labor regulations, & Social Security they used to come about like clockwork in the US. I think those programs are the primary reason economic recessions don’t degrade into all-out depressions any more…
Some examination of the proposition that FDR made the Great Depression worse:
How FDR Made the Depression Worse
Submitted without either endorsement or deprecation – just to show there is a range of opinion on the topic.
The article begins by noting that Newt Gingrich–Newt Gingrich!!!–loves FDR. So did Reagan. So I’m guessing that the view of FDR as having been bad, evil, made things worse, etc., are very much out of the mainstream…
Glenn –
From my poking around, the idea that FDR made things worse (with regard to the Great Depression) has a reasonable amount of acceptance – that he was evil, not so much.
I think his effectiveness and success as a war leader make it much harder to judge his earlier terms objectively, as does the fact that he fell into poor health and died while in office – the parallel with Moses dying in sight of the Promised Land is one that has been made.
It may be that the interventionist approach he is criticized for during the Great Depression became just what was needed during a major war – that is, the times became suited to his approach to government, rather than his approach to government becoming suited to the times.
While I think there may be lessons to be learned here about the role of government in the economy, I’m not going to criticize someone posthumously when they had such a large hand putting WWII in the ‘win’ column.
Glenn- The thought may be well out of the mainstream, but that does not make it untrue. Indeed, the GOP has embraced big government, and in fact, to the extent that would have made FDR blush.
There is truth in what Doug points to with government as a stabilizer. It certainly can have that effect. It also has the effect of stabilizing against huge sustained booms. My opinion is that people tend to see this phenomenon so as to suit themselves.
I guess I’ll blog on this soon as a topic of interest soon. One can make a reasonable (although quite debatable) case about Roosevelt’s economic policies from a political angle. But government policy was an almost unmitigated failure as economics– theoretically and empirically. The extent to which this is true is somewhat debatable– extending the Depression to just treading water– but it is absolutely clear that FDR’s (and Hoover’s similar) policies were not helpful to the economy. (As a statistical factoid, the unemployment rate in the 7th year of FDR’s “New Deal” was 19%…hardly a success!)
OK, I’ve posted at length on this now on my blog. Enjoy! eric
http://schansblog.blogspot.com/2007/08/fdr-and-great-depression.html
Eric,
Not being an economist I can’t debate you head-to-head on this in detail, but do you dispute the figures on this website?
http://www.hyperhistory.com/online_n2/connections_n2/great_depression.html
I.e., unemployment dropped from about 24% to 14% from 1933-1937; GDP increased an average of 5.2% annually from 1933 to 1939, better than the Reagan years (although the hole was so deep, this wasn’t enough to end the Great Depression). I imagine you would take issue with this author stating that the reason for the backslide in unemployment in 1937-38 up to 19% was FDR’s backing off of deficit government spending…Bottom line is, not everything FDR tried worked, & he was the first to admit that, but I think a lot of it did. More specifically, massive government intervention in a time of economic crisis can, if nothing else, alleviate human suffering rather than waiting around for a “natural” market correction. And I, personally, have no desire to go back to the “olden days” of no SEC, no NLRB, no FDIC, no SSA…and neither do the vast majority of Americans on the left, right, or in the middle…
Glenn, the link has some good info but some significant deficiencies as well.
He understates Smoot-Hawley’s impact– as is clear by his later reference to international trade dropping by 2/3rds.
“Even this is compensated for by the fact that American businesses are no longer investing in Europe, but keeping their money stateside.” Here, he repeats a common Keynesian flaw about “purchasing power” (see: my reference to the benefit of higher prices). Reducing mutually beneficial trade cannot be good for an economy.
“The consensus of modern economists is that the tariff made only a minor contribution to the Great Depression in the U.S., but a major one in Europe.” This assumes that intl trade played a much bigger role there than here. I don’t know the numbers on that off-hand, but that seems quite unlikely.
His entry in 1931 implies that Hoover was inactive. While less so than FDR, Hoover was quite the interventionist as well.
The 1934 reference to Sweden is obviously simplistic (what else did they do or not do) and seems to imply a Keynesian bias (deficit spending, by itself, fixed the problem).
How did (or rather, how could) FDR’s policies work in terms of economics (not just politics)? Artificially increasing costs and prices? Higher taxes? (Note that a discussion about whether these are desirable today is a different matter than whether they helped or hurt in terms of ending the Depression.) Shuffling money from some to others? How are any of these helpful in promoting productive activity?
Again, you can’t reasonably accuse the market *by itself*, because we didn’t wait for the market to fix itself. The govt was quite busy intervening from 1929 forward. And why would one expect an unregulated market to only reduce unemployment to 19% after 7 years?
FDR politically, ok…but economically? He’s fortunate to have had Keynesianism stay in repute through the 1970s and to have his friends write the bulk of the history.