Political Crossfire Forums

[Ellron]

I think part of FDR's first new deal did make the depression longer. That part being a goverment that supported limiting production of consumer goods. The idea behind this was by lowering the production of goods demand would go up driving up prices thus making profit for companies which would hire new workers with the new money. He was able to make companies volunteer to do this through the National Relief Association(NRA). The NRA would pretty much say "companies lower production and we will ignore anti trust laws" thus giving them a reason to follow suit.

Now this idea may seem good on the surface and is actually practiced today with success but on a large scale it is horrible.

Heres why.

The main purpose of an economy is to make and distrubute goods.

Now just on a macro scale you can see the problem with this.

Make<----He just completly f****d this part up.
and
Distrubute<---His attempt was to improve this. Which it didnt by the way.

Now on a micro scale this doesnt even work either.

If the economies production was going as was there would of been so many goods at low prices that people could of been able to buy it. Making the economy regenerate in a snowball affect.

Secondly
To lower production you need less workers thus getting workers fired. Thus spreading the wealth out even less unevenly. Thus making fewer potential buyers.

Thirdly
Kind of like the second if companies were compelled to make less why would they hire more to make more.

To end this i must say i am not blaming FDR for the long depression but some of his policies did add years onto it. If anything i would be blaming his economical advisors who told him to go in that direction.

[Bobicito]

THis is interesting I have never heard of this before. Is this accurate?

[Ellron]

Bobicito wrote: THis is interesting I have never heard of this before. Is this accurate?

Google it...It is.

Also i may be on chat for this subject from

2pm-12am at room FDR

If you would like to chat about it just send me a pm.

[Angela]

You forget that during the depression (and it was one of the causes of the depression) there was a huge excess of production capacity and one of the main problems was the deflation: by 1933 when FDR took office the consumer price index had suffered a 30% fall since 1929 (and in 1939 it was still 15% lower than in 1929) , the monetary mass decreased by 20%... so trying to reduce production and rise the prices wasn’t as wrong as it may seem.
Moreover at the time there was no real macroeconomic theory except for the neo-classical (that was mostly a microeconomic theory), and it was pretty clear to anyone that simply it wasn’t working, in 1932 after 3 years of non intervention the economy was near the point of collapse. . Keynes wasn’t known outside academic circles: his most important work, The General Theory of Employment, Interest and Money was published only in 1936. The Idea of full employment budget was yet to come, if I can recall the 1932 presidential campaign was played mostly on how to restore the budget deficit and idiocy if you consider that that the full employment budget had a surplus.

[micfranklin]

I don't know if the New Deal made the Depression last longer, but I personally think all of those programs (AAA, AVA, etc) didn't really do anything.

[Anarko-Kapitalizt]

micfranklin wrote: I don't know if the New Deal made the Depression last longer, but I personally think all of those programs (AAA, AVA, etc) didn't really do anything.

The only thing the New Deal programs did is they made a mockery of the Constitution.

[micfranklin]

Anarko-Kapitalizt wrote: micfranklin wrote: I don't know if the New Deal made the Depression last longer, but I personally think all of those programs (AAA, AVA, etc) didn't really do anything.

The only thing the New Deal programs did is they made a mockery of the Constitution.

How so did they mock the Constitution?

[rye]

Ellron wrote: I think part of FDR's first new deal did make the depression longer. That part being a goverment that supported limiting production of consumer goods. The idea behind this was by lowering the production of goods demand would go up driving up prices thus making profit for companies which would hire new workers with the new money. He was able to make companies volunteer to do this through the National Relief Association(NRA). The NRA would pretty much say "companies lower production and we will ignore anti trust laws" thus giving them a reason to follow suit.

Now this idea may seem good on the surface and is actually practiced today with success but on a large scale it is horrible.

Heres why.

The main purpose of an economy is to make and distrubute goods.

Now just on a macro scale you can see the problem with this.

Make<----He just completly f****d this part up.
and
Distrubute<---His attempt was to improve this. Which it didnt by the way.

Now on a micro scale this doesnt even work either.

If the economies production was going as was there would of been so many goods at low prices that people could of been able to buy it. Making the economy regenerate in a snowball affect.

Secondly
To lower production you need less workers thus getting workers fired. Thus spreading the wealth out even less unevenly. Thus making fewer potential buyers.

Thirdly
Kind of like the second if companies were compelled to make less why would they hire more to make more.

To end this i must say i am not blaming FDR for the long depression but some of his policies did add years onto it. If anything i would be blaming his economical advisors who told him to go in that direction.

We'll never know if it made it longer, but we do know that his policies have been instrumental in stopping it from ever being that severe again. Pure capitalism is incredibly volatile due to market saturation, which, as another poster mentioned, was one of the main causes of that depression.

You didn't prove anything, perhaps because the explanation was very uhhh..short. Could you elaborate without using arrows?

[evil muppet]

OF course the New Deal made the depression longer and worse.

First, it wasn't laissez-faire capitalism that caused the depression. It was bad monetary policy. The Federal Reserve was to blame.

Herbert Hoover did not just sit on his hands. Hoover immediately began interferring with the market and believed that he could fix the depression. Many of the New Deal programs were extentions of some of Hoover's programs. many of those were based on WWI programs which were disasterous.

Along with creating some bad programs and bad monetary policy, congress also exasserbated the depression by enacting a protective tariff, thus setting off a trade war with Europe.

Europe was already royally screwed because of WWI. many nations were in debt to the US and there was all kinds of issues with gold payments and whatnot but anyways, they were barely keeping their heads above water and the US kind of pulled them under as well.

[Varyag]

no

http://eh.net/lists/archives/eh.res/feb-1997/0010.php

[ubikk]

You can over-simplify the depression by saying that there was a shortage of money. The stock market crash wiped out a lot of wealth. Then Hoover perversely had the Fed clamp down really hard on the money supply. Nobody had money to pay anyone else to produce goods and services.

FDR attempted to inflate the money supply by having the government produce things, like hydro-electric dams and bridges, and then paying people for the work as opposed to just by sending everyone a free check. That also created demand for goods like steel and fuel which induced factories to start hiring again and producing things.

It was not a bad idea at all given the state of things.

[Anarko-Kapitalizt]

micfranklin wrote: Anarko-Kapitalizt wrote: micfranklin wrote: I don't know if the New Deal made the Depression last longer, but I personally think all of those programs (AAA, AVA, etc) didn't really do anything.

The only thing the New Deal programs did is they made a mockery of the Constitution.

How so did they mock the Constitution?

By being unconstitutional.

[Melcar]

micfranklin wrote: I don't know if the New Deal made the Depression last longer, but I personally think all of those programs (AAA, AVA, etc) didn't really do anything.

I'm of that same school of thought. If anything, they put a bandage on the problem.

[melchizedek22]

micfranklin wrote: I don't know if the New Deal made the Depression last longer, but I personally think all of those programs (AAA, AVA, etc) didn't really do anything.

It did for the people who got to eat!

FDR did things so people could eat,somebody had to do something,capitalism could have been overthrown by the desparate
masses.Some of the socialist things FDR did,probaly saved capitalism in America.

[rye]

Anarko-Kapitalizt wrote: micfranklin wrote: I don't know if the New Deal made the Depression last longer, but I personally think all of those programs (AAA, AVA, etc) didn't really do anything.

The only thing the New Deal programs did is they made a mockery of the Constitution.

The Constitutionality has been settled, so I don't see any point in that debate. Besides, we know for a fact that the programs did a lot more.

Areas helped by the TVA are still getting electricity and flood control. Millions of people, at the time, found employment while building the infrastructure of the U.S. Sheesh, they had food and gainful employment and the policies remain sound to this day.

The statement that "a little socialism is good for capitalism" is a truism. The way the government goes about stoking the economy has since changed, however, especially after NSC 68 was written and implemented. It essentially said that the feds can fuel expansion by investing in military research, which employs people in the short term and creates new products which can be turned over to the privates sector.

The real debate is where Keynsian policies should be applied. Should the poor get jobs and assistance or should the money be spent with huge corporations to pad the bottom line. We know where the Bush admin. falls on that issue.

[evil muppet]

I see absolutely nothing in the Constitution that allows the federal government to engage in any of the New Deal programs.

If the government polices were so effective during the Great Depression, why did it last so long? Answer is simple. the policies prolonged the depression, the policies made it worse, not better.

[zero18]

micfranklin wrote: I don't know if the New Deal made the Depression last longer, but I personally think all of those programs (AAA, AVA, etc) didn't really do anything.

It certainly had a placebo effect on America. Everyone felt that since something was being done things were going to get better sooner. In reality, the New Deal only dragged out the Depression.

[zero18]

Ellron wrote: Bobicito wrote: THis is interesting I have never heard of this before. Is this accurate?

Google it...It is.

Also i may be on chat for this subject from

2pm-12am at room FDR

If you would like to chat about it just send me a pm.

Have you read FDR's Folly?

[ubikk]

evil muppet wrote: I see absolutely nothing in the Constitution that allows the federal government to engage in any of the New Deal programs.



What specifically precludes them from doing it?

Quote: If the government polices were so effective during the Great Depression, why did it last so long? Answer is simple. the policies prolonged the depression, the policies made it worse, not better.

How did they do that? What would you have done differently to get the money supply back up?

[ubikk]

Melcar wrote: micfranklin wrote: I don't know if the New Deal made the Depression last longer, but I personally think all of those programs (AAA, AVA, etc) didn't really do anything.

I'm of that same school of thought. If anything, they put a bandage on the problem.

There was no money. Pretty much only government workers had money. All the money of industrialists and bankers were leveraged on stocks and evaporated. Then Hoover perversely ordered the fed to tighten the supply further. A vital economy with machines and people does not just up and stop working one day. They couldn't pay people, they couldn't pay suppliers, and they started closing down.

Someone had to get money back into the economy again. FDR's idea was to do that by basically printing money and paying people to do public works projects. At the time, that was a pretty good idea. Nowadays, they do it by lending money very cheaply and loosening credit, but no one wanted to deal with credit at that time because of what happened with all the people who borrowed to buy stocks and lost them the money in the crash.

What ultimately ended the depression was the ultimate government works project: WWII. So, FDR did ultimately end the depression, with a little help from the Axis.