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  •  No. (0+ / 0-)

    The periodic recessions of the 19th century were not consistently more severe than the recessions of the 20th century.  Most were relatively small, brief downturns, more like what we saw in 2001 than 1929 or 2008 (they also tended to be more geographically limited, since the economy was less of a unified entity prior to the 20th century, but that's trivia).

    Both 1929 and 2008 were caused by asset bubbles, as most crashes are, not Republican policies.  Such phenomena are symptomatic of a capitalist economy: there's no real reason to ever think they can be prevented simply by government policy.

    The Hoover administration can be legitimately blamed for choking off the means for recovery and not taking positive action to create growth, but not really for creating the Depression in the first place.  It's worth noting that the economic stimulus which did ultimately see the end of the Great Depression, WW2, actually did so by creating another economic bubble, which led to another (smaller) recession after the war ended.

    Claiming that progressive policies a magic cure for the business cycle is both wishful thinking and an invitation to be discredited when things go wrong.  Much better to maintain realistic expectations about the capabilities and limitations of even good government policy.

    •  1. Asset bubbles (0+ / 0-)
      Both 1929 and 2008 were caused by asset bubbles, as most crashes are, not Republican policies.  
      The asset bubbles were caused by Republican policies.

      We are the principled ones, remember? We don't get to use the black hats' tricks even when it would benefit us. Political Compass: -6.88, -6.41

      by bmcphail on Mon Feb 13, 2012 at 09:23:07 PM PST

      [ Parent ]

      •  2. Frequency and duration of recessions (0+ / 0-)
        The periodic recessions of the 19th century were not consistently more severe than the recessions of the 20th century.  Most were relatively small, brief downturns, more like what we saw in 2001 than 1929 or 2008 (they also tended to be more geographically limited, since the economy was less of a unified entity prior to the 20th century, but that's trivia).

        We are the principled ones, remember? We don't get to use the black hats' tricks even when it would benefit us. Political Compass: -6.88, -6.41

        by bmcphail on Mon Feb 13, 2012 at 09:24:43 PM PST

        [ Parent ]

        •  3. Severity of recessions (0+ / 0-)

          We are the principled ones, remember? We don't get to use the black hats' tricks even when it would benefit us. Political Compass: -6.88, -6.41

          by bmcphail on Mon Feb 13, 2012 at 09:30:20 PM PST

          [ Parent ]

        •  3. Severity of recessions (sorry about the crazy) (0+ / 0-)

          We are the principled ones, remember? We don't get to use the black hats' tricks even when it would benefit us. Political Compass: -6.88, -6.41

          by bmcphail on Mon Feb 13, 2012 at 09:33:57 PM PST

          [ Parent ]

          •  Now, I am not an economist (0+ / 0-)

            but the left side of both charts look bluer and more up and downy than their right sides.

            We are the principled ones, remember? We don't get to use the black hats' tricks even when it would benefit us. Political Compass: -6.88, -6.41

            by bmcphail on Mon Feb 13, 2012 at 09:35:00 PM PST

            [ Parent ]

            •  Although I do have to say (0+ / 0-)

              that I had no idea that the post '45 recession was a deep as it was, though short lived.

              We are the principled ones, remember? We don't get to use the black hats' tricks even when it would benefit us. Political Compass: -6.88, -6.41

              by bmcphail on Mon Feb 13, 2012 at 09:47:28 PM PST

              [ Parent ]

            •  It's never simple. (1+ / 0-)
              Recommended by:
              bmcphail

              My training is as an economist, but I hate data-mining too much to ever consider it as a true profession.  If you haven't ever studied some at least some undergraduate level economics lessons, then I do highly recommend you try one or two sometime; it'll do bizarre (but enlightening) things with your opinions.  That's not an attempt to dismiss you, either, you'll find plenty of support for the positions (that I'm inferring) you hold.  It's just a sort of perspective-changer.

              Anyway, something to keep in mind with economic data that goes back that far is that US numbers start getting highly suspect once you're getting earlier than 1910 or so.  Not just due to weaker data collection at the time, but because the economy was so fragmented and non-standardized (Federal Reserve established in 1913).  So it was harder to compare relative values of things, and the regional economies were much more disconnected (so California was less likely to care what was happening in New York, etc.)

              That being said, though, the data you've got strikes me as probably being a decent sketch of the big picture; and I certainly don't have the patience to go digging around for contradictory materials.  Plus I'm intellectually honest enough that I don't really want to resort to classic lies/damn-lies/statistics to debunk anything.

              So what's important (for our argument) to look at in your chart is less the amount of time spent in recessions, as it is the simple number of recessions that occurred.  I have no objection whatever to the claim that Keynesian economic policies (personally, I really hate the "Progressive" political label used as a substitute for this, but that's just me) make and have made recessions shorter and less painful.  They absolutely do.

              What they don't do is prevent recessions from occurring in the first place.  Now, it's conceivable that they could, but it would take either insane luck or utter clairvoyance, because it would require cranking up the government spending at the precise moment a downturn occurs.  That's not really a long-term economic strategy (yet, anyway).  An alternative is to just keep government spending cranked way up all the time, which can help to mask recessions.  But that sort of strategy isn't really a good idea, either, because it's pretty easy to drive a government into bankruptcy if you're not careful (and governments usually aren't).  The US never quite got the hang of cutting back spending and raising taxes in good times, which is the other half of good Keynesian policy (it's countercyclical spending, not just big spending).  HW Bush and Clinton almost got it, but only with a lot of fortunate circumstances, and then those achievements went unconsolidated (for which you can certainly blame Bush Jr. and the Republicans, and do so with my blessing).

              Anyway, the point that I'm driving at with this ramble is that you want to count the discrete recessions in your first chart, or the number of peaks in your second).  By my count, before the Great Depression, there are 18.  The GD and afterwards are 14.  That's a 12% difference, but with only 32 data points, that's not all that significant variation.  Counting the peaks on the second chart, I get 20 on both (though I did that quickly by hand, and some of them are probably of arguable significance, I'd estimate error at no more than 2 either way).  That chart may be a little more indicative of the point I'm getting at anyway; which is that Keynesian policies don't actually prevent downturns, only mitigate them (and sometimes enough that they just manifest as a huge slowdown in growth, rather than a technical recession).  Notice that starting in the '50s, the business cycle is still just as visible as it was before then, but it's contracted: the valleys are higher, the peaks are lower; but their rate of occurrence is roughly the same.

              Hmm, something I'm noticing in my final review before posting this is that a lot of this may be due to a poor choice of words in my earlier post.  I retract the claim that recessions in the 20th century were no less "severe" than those in the 19th.  What I should say is that the underlying causes (i.e. the extent of economic losses from burst asset bubbles) in both time periods are roughly comparable.  What's changed since the start of the 20th century is the knock-on effects from those initial collapses, so that the impact on the overall economy is not as severe.  My goal was to take issue with the implication that "progressive" economic policies have prevented or can prevent recessions outright.  I did not and do not wish to imply that they cannot make recessions less catastrophic.  The whole reason I'm so interested in this argument is that I support such policies, and I want them to be popular.  But my fear is that, by exaggerating the claims of their capabilities, we can discredit them in the minds of people with a weaker understanding of economics.  I do not want anyone to think they have been promised "no recessions ever again", because that is a promise which will ultimately go unfulfilled.

              •  I really appreciate your detailed (0+ / 0-)

                intellectually honest and careful reply.  It sounds like I'd enjoy your intro economics classes.

                I agree with the notion that Keynesian principles mitigate rather than prevent recessions.  I would argue that in terms of human misery averted, that is a good thing to do.  

                We are the principled ones, remember? We don't get to use the black hats' tricks even when it would benefit us. Political Compass: -6.88, -6.41

                by bmcphail on Tue Feb 14, 2012 at 11:33:12 AM PST

                [ Parent ]

                •  I did notice when I was googling around (0+ / 0-)

                  for charts the caveat about the reliability of  pre-20th century economic data.  Important to understand when trying to analyze.

                  We are the principled ones, remember? We don't get to use the black hats' tricks even when it would benefit us. Political Compass: -6.88, -6.41

                  by bmcphail on Tue Feb 14, 2012 at 11:36:59 AM PST

                  [ Parent ]

      •  Only with a meaningless definition. (0+ / 0-)

        Asset bubbles are caused by investment behavior, over which the government policy in a relatively free-market country like the United States has little influence.  These are typically the results of new technologies, products, resources, etc.  Because they're so profitable, they draw a lot of private capital.  But because no one has perfect information on the exact profitability and characteristics of the market, the investment tends to eventually become overinvestment: a bubble which then collapses when the market realities become clear.  Now, the reason that it's so hard for governments to prevent that sort of event is that they're so unpredictable: when bubbles are first forming, it's hard to tell just how big they are, because no one's sure what the market can actually sustain.  Right now, even once you take all the political posturing out of the discussion, there's still not a consensus on where the US housing market will level out in the end.

        Trying to outright prevent that from happening is not a position that capitalists will take, because it requires some very heavy-handed government control of the economy which causes other, worse problems (though they're generally down to the same fundamental principles that cause asset bubbles, they just manifest in different ways).  If you don't like capitalism, then such things may well seem like reasonable policies to you.  But in that case it's not really meaningful to refer to them as "Republican" policies, because the Democratic party isn't really on your side, either.

        It's worth mentioning one of the exceptions to the generalization, too.  One of the very few times that the US government has had policies strong enough to prevent that sort of privately-driven bubble development was WW2.  In that case, our military spending was just so phenomenally huge that it basically crowded out almost all of the of the private investments behind such normal operations of the economy.  It's an exception that proves the rule, though, because what happened instead is that you saw a government-created investment bubble (in military industries).  Once market conditions changed (with the end of the war), the military industry was no longer profitable on that same scale, the bubble burst, and we had a recession while the economy reorganized.

        Since you've broken up your posts, I'll deal with the other stuff separately.  But I think that's enough (for now) to clarify this aspect of my argument.

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