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In Part I of this series, New Deal Democrat and I looked at the years 1929 - 1933.  These years saw a decline of 25% in the chained GDP figures; a failure of 20% of commercial banks, a drop in personal income from $90 billion to $50 billion and a drop in the level of industrial production from 60 to 30.  In
part II
we looked at the years 1934 - 1940, where we saw that growth returned to 1929 levels in 1937, although this was lowered by the recession of 1938.  By 1939 GDP was again increasing.  In this article, we will look at what happened statistically and practically during the years of 1934 - 1938.

"I was laid off in '31. I was out of work for over two years. I'd get up at six o'clock every morning and make the rounds. I'd go around looking for work until about eight thirty. The library would open at nine. I'd spend maybe five hours in the library."  ....
"I can remember the first week of the CWA checks. It was on a Friday. That night everybody had gotten his check. The first check a lot of them had in three years. Everybody was out celebrating.... Everybody was so happy, you'd think they got a big dividend from Xerox."
"I never saw such a change of attitude. Instead of walking around feeling dreary and looking sorrowful, everybody was joyous. Like a feast day. They were toasting each other. They had money in their pockets for the first time. If Roosevelt had run for President the next day, he'd have gone in by a hundred percent."

 - Hank Oettinger, as told to Studs Terkel, "Hard Times"

Let's start with government spending.  The government ran a deficit for these years.  Here is a chart from the St. Louis Federal Reserve.


The blue line represents government expenditures and the red line represents government receipts.  In addition, the amount of national debt tripled.  However, remember that in the second installment of this series we learned the economy grew at strong rates from 1934 - 1937, returning to 1929 levels by 1937.  As a result,


in 2000 chained dollars, government spending as a percent of GDP fluctuated between 18% and 21% for the years 1929 - 1933.  In addition,


Federal debt as a percentage of GDP remained around 40% for the entire decade.  By modern standards this hardly shocking.  By standards of he 1930s it was very controversial.

Whether or not the increase in government spending as a percent of GDP is good or bad is a judgment call and is an issue that is still hotly debated today.  In my opinion it was warranted.  The country was in the middle of a deflationary spiral.  Older school economic ideas were not working.  In addition, with unemployment over 20% by 1932 something had to be done to prevent civil unrest.  

So -- what did happen?  Let's answer that with this explanation about what makes a country tick.  GDP is composed of four categories: consumer spending, net private investment, exports and government spending.  What we see of the decade of 1929 - 1939 is a decline and the return of both private investment and consumer spending:  

First, here is a graph of personal consumption expenditures in 2000 chained dollars for the years 1929 - 1939:


Notice that by 1936, PCEs total $677 billion in chained 2000 dollars, which is slightly higher than the $661 billion total from 1929.  In other words, people started spending again.  

Secondly, here is a chart of total private investment in 2000 chained dollars from 1929 - 1939:


Notice that gross private domestic investment dropped from the years 1929 - 1933, but returned to 1929 levels by 1937.  The levels dropped again in 1938 (due to an increase in banking reserves, see below), but rebounded in 1939.  The reason for the 1929 - 1933 drop is the deflationary spiral that gripped the country in 1929 - 1933 (see part I).  (see also page 5 from Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Returned After the War," which shows the same information)

As Paul Krugman explained in the video clip of part II, there is no reason to invest when unemployment is at 20% and there is a ton of idle capacity around the country.  But as demand picked-up in the 1933-1937 years, private investment did as well.

Let's look at this information from another angle.  Below are charts composed with information from the Bureau of Economic Analysis.  The chart is for the years 1930-1934.  Remember the GDP categories from above -- consumer spending, net investment, exports and government spending.  Each "cluster" of bars shows several things.  The bar on the far left (in blue) is the total GDP gain or loss for the year.  The bar next to it (in purple) shows the increase or decrease in personal consumption expenditures. The white bar shows total private domestic investment.  These bars show how much of the GDP gain or loss was caused by a particular sub-category.  For example, in the cluster farthest left GDP dropped 8.6%.  The bar next to it shows that personal consumption expenditures were responsible for about 4% of that 8.6%, or about 46% of the drop in total GDP for 1930.  


The point to the above chart is to demonstrate large drops in personal consumption expenditures and investment were responsible for most of the drop in GDP for the years 1930 - 1934.

Let's look at each year of the 1934 - 1937 to see what they say:


In 1934 the economy grew at a 10.8% (that is inflation adjusted).  Of that figure, 5.71% came from PCEs and 2.78% came from private investment.  In other words, 52% of growth came from consumer spending and 25% came from investment.  18% of growth came from government spending.


In 1935 the economy grew at an 8.9% (that is inflation adjusted).  Of that figure, 4.81% came from PCEs and 4.51% came from private investment.  In other words, 54% of growth came from consumer spending and 50% came from investment.  4.83% of growth came from government spending.


In 1936 the economy grew at a 13% (that is inflation adjusted).  Of that figure, 7.74% came from PCEs and 2.53% came from private investment.  In other words, 59% of growth came from consumer spending and 19% came from investment.  19% of growth came from government spending.


In 1937 the economy grew at a 5.1% (that is inflation adjusted).  Of that figure, 2.75% came from PCEs and 2.58% came from private investment.  In other words, 54% of growth came from consumer spending and 50% came from investment.  Note the government spending provided a negative stimulus that year.

Then came 1937-1938 recession.  Why did this happen when things were going so well?  There are several contributing factors:

1.) Beginning mid-way through 1936 and continuing through 1937 the Federal Reserve raised the reserve requirements for central reserve city banks from below 15% to 25% (see Friedman's Monetary History of the US, page 513.  See page 526 "Our conclusion, expressed above, is that the increase in reserve requirements did have important current effects.")

2.) As Krugman pointed out in the clip from the second part of this series, the government balanced the budget in 1938.  The government raised taxes at an inappropriate time.  

3.) An inventory build-up caused "by a general impression, among business men, that "inflation" might be coming and that one had better buy before it was too late....When the purchasing power came to sell these goods at retail to the public, the purchasing power to absorb them just wasn't there."  (From Since Yesterday, by Frederick Lewis Allen).

Increased bank reserve requirements along with a change in the fiscal situation combined to create a recession.

  As with the Great Contraction of 1929-33, while the graphs may tell the technical story, underlying them is the story of a government trying just about everything it can think of to steady and then expand the economy to the benefit of the vast majorit of its citizens.  There were a blizzard of New Deal programs and agencies focused on immediate Relief of the afflicted, Recovery of the economy, and Reform to attempt to ensure that the Great Depression could not happen again.  To try to fully appreciate the broad scope of that effort, here is a partial list and explanation of important New Deal programs.  Remember that many of these are what the RW noise machine wants to claim actually delayed recovery from the depths of the Depression:


The Federal Emergency Relief Act (1933) established the Federal Emergency Relief Administration (FERA) and gave it half a billion dollars to distribute to the states for any relief they felt necessary. Half was for matching grants, with the states contributing three dollars for every dollar of federal funds. The remainder could be given in direct grants.   At one point, as many as 6 million families were on direct relief.

The Emergency Banking Relief Act (1933) established a system to close down insolvent banks and reorganize and reopen those banks strong enough to survive, after a mandatory four-day bank holiday that took place immediately after Roosevelt took office. Within 300 days of the act's passage, 5,000 banks had passed inspection and were reopened. Roughly two-thirds of U.S. banks quickly reopened under this act, and faith in banking institutions was restored, with money flowing out from under mattresses and back into financial institutionas as deposits. The act also allowed the confiscation of the gold of private citizens. The US dollar was then devalued by approximately 40%, ending the deflationary spiral of the Depression.  

The Unemployment Relief Act  (1933) established the Civilian Conservation Corps, a work relief program for young men ages 18-25 from unemployed families. The CCC became one of the most popular New Deal programs among the general public and operated in every U.S. state and several territories in 2600 work camps.  The young men were paid wages, but were expected to share their wages with their families.  They built such things as fire trails, camp sites in parks, and also cleared swamps and planted trees.  Here are some CCC recruits about to leave for Montana:

The Public Works Administration (1933) allowed $3.3 billion to be spent on the construction of public works to provide employment in the construction and building industries, and to stabilize purchasing power,  

The Home Owners Refinancing Act (1933) helpeds those in danger of losing their homes, by providing mortgage assistance to homeowners or would-be homeowners by providing them money or refinancing mortages.  It also created the Home Owners' Loan Corporation (HOLC), which lent low-interest money to families in danger of losing their homes to foreclosure. By the mid 1930s, the HOLC had refinanced nearly 20% of urban homes in the country.

The Civil Works Emergency Relief Act (1934) allotted new funds for Federal Emergency Relief Administration to run new programs of civil works and direct relief. In 1935 it became the Works Progress Administration (1935) and was the largest New Deal agency, employing millions of people and affecting most every locality in the United States, especially rural and western mountain populations. Between 1935 and 1943 the WPA provided almost 8 million jobs and income to the unemployed. The program built many public buildings, projects and roads and operated large arts, drama, media and literacy projects, employing actors, artists, musicians, and writer (nearly 4 million in 1936 alone). It fed children and redistributed food, clothing and housing. Almost every community in America has a park, bridge or school constructed by the agency, and most public buildings of a certain age will feature architecture or a mural created by one of its artisans:


The National Industrial Recovery Act (1933) legalized cartels and funded massive government spending on public works through the PWA. The NIRA operated under codes for each industry, all of which were written by committees of businessmen from the specific industry involved. Including all sorts of subcodes, rules, and regulations, the Act's proscriptions were enormously complex.  The entire purpose was to eliminate unemployment and raise wages. In general - NRA codes limited production, had common control of prices and sales practices, outlawed child labor, and established a 40 hour work week and minimum wage.

The Agricultural Adjustment Act (1933) restricted production by paying farmers to reduce crop area. Its purpose was to reduce crop surplus so as to effectively raise the value of crops, thereby giving farmers relative stability again (in the past, wild swings in prices, particularly precipitous drops due to overproduction, could bankrupt a family farm during a single year). The farmers were paid subsidies by the federal government for leaving some of their fields unused.

The Tennessee Valley Authority (TVA) (1933) provided and still provides navigation, flood control, electricity generation, fertilizer manufacturing, and economic development in the Tennessee Valley, a region particularly impacted by the Great Depression, with a goal of rapidly modernizing the region's economy and society.

The Rural Electrification Act (1936) provided federal funding for installation of electrical distribution systems to serve rural areas of the United States.  In the 1930s, the provision of power to remote areas was not thought to be economically feasible and so was largely unavailable in rural areas of farms and ranches. A 2300 volt distribution system was then used in cities. This relatively low voltage could only be carried about 4 miles before the voltage drop became unacceptable.  REA cooperatives used a 6900 volt distribution network, distributed over their own network of transmission and distribution lines. which could support much longer runs (up to about 40 miles). Despite requiring more expensive transformers at each home, the overall system cost was manageable.


The Glass-Stegall Banking Act (1933) introduced the separation of bank types according to their business (commercial and investment banking), and it founded the Federal Deposit Insurance Company for insuring bank deposits. It also increased the power of the Federal Reserve Board to regulate interest rates.

The National Housing Act (1934) made housing and home mortgages more affordable. It created the Federal Housing Administration (FHA) and the Federal Savings and Loan Insurance Corporation.  It was designed to stop the tide of bank foreclosures on family homes. Both the FHA and the Federal Savings and Loan Insurance Corporation worked to create the backbone of the mortgage and home-building industries.

The Securities Acts (1933 and 1934)  governs the offer or sale of securities using the means and instrumentalities of interstate commerce, and requires that they be registered; and also governs the secondary trading of securities (stocks, bonds, and debentures). Contrasted with the Securities Act of 1933, which regulates these original issues, the Securities Exchange Act of 1934 regulates the secondary trading of those securities between persons often unrelated to the issuer.

The National Labor Relations Act (1935) protects the rights of most workers in the private sector to organize labor unions, to engage in collective bargaining, and to take part in strikes and other forms of concerted activity in support of their demands.

The Social Security Act (1935)  established a system whereby payroll taxes, first collected in 1937, that paid for lump-sum death benefits and also, beginning on January 31, 1940, monthly retirement benefits.

    ALTOGETHER THESE ENACTMENTS guaranteed two important things to the economy and to society:  first, as shown in the graphs above, that the deflationary spiral of wages and prices had stopped, meaning that future income and the ability to pay off new loans could be reasonably assured, and spending could begin again; and secondly and just as importantly, despair was replaced with hope and confidence for the future.
    Even now, facing a not dissimilar meltdown in global finance, the surviving reforms of unemployment insurance, collective bargaining, securities law and Social Security are the strongest bulwarks separating us from a similar abyss.

Here is part of a video history of the CCC as remembered by some of the workers themselves:

Update [2009-1-5 14:8:59 by bonddad]:: CORRECTION: A posted below noted the graph from page 5 of Higgs paper does not show an evening out of investment in 1937. This is correct; that graph does not show that. However, information printed above from the BEA contradicts Higgs assertions and shows that investment did return to 1929 levels in 1937. In addition, Higgs provides a second graph on page 6 which (in his words) "avoids the distortions potentially effecting data shown in exhibit 1". This graph shows investment as a percent of GDP at 16% in 1929 and 14% in 1937. This graph uses current dollar numbers. In other words, Higgs admits his first graph may provide distortions and then provides a graph far closer to the BEA's information.

Originally posted to bonddad on Mon Jan 05, 2009 at 04:32 AM PST.

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Comment Preferences

  •  In Part 4, (132+ / 0-)
    Recommended by:
    claude, JWC, Joe Bob, Ray Radlein, Trendar, gogol, alisonk, Gooserock, Dave the Wave, JTML, wu ming, billlaurelMD, eeff, devtob, TarheelDem, opinionated, conchita, mmacdDE, Cassandra77, SecondComing, SoCalJayhawk, Time Waits for no Woman, Aquarius40, taonow, javelina, larryrant, sngmama, Jesterfox, hopeful, wader, Sychotic1, jmknapp, riverlover, cevad, side pocket, Josiah Bartlett, xxdr zombiexx, Green Mountain Flatlander, rapala, Fabian, Massman, escapee, jrooth, wmc418, BluejayRN, newfie, relentless, Silentspring, terrypinder, Brooke In Seattle, Mz Kleen, Ice Blue, blue jersey mom, sodalis, USexpat Ukraine, playtonjr, berko, ksingh, mbzoltan, Milly Watt, bluebrain, Eupraxsophist, arbiter, NearlyNormal, MBNYC, FMArouet, Temmoku, ChuyHChrist, ms badger, sasher, Bobjack23, DBunn, cjallen, bigchin, marykk, fisheye, xaxado, dotsright, Cronesense, RichardWoodcockII, FWIW, california keefer, Outrider, FishOutofWater, LillithMc, Jimdotz, BehereBenow, Brahman Colorado, keikekaze, trueblueliberal, MKinTN, Dem in the heart of Texas, Amor Y Risa, Mr SeeMore, AshesAllFallDown, LI Mike, Remembering Jello, TH Seed, saildude, mofembot, temptxan, numen, Virginia mom, Piaffe, ggwoman55, Psychotronicman, sustainable, DemocraticOz, be the change you seek, maryabein, notrouble, mississippi boatrat, John Shade, fsbohnet, deutschluz, whatnext, jfromga, NCrissieB, bohemian darling, Norbrook, chrome327, Man from Wasichustan, NY brit expat, sullivanst, sharonsz, nosleep4u, jeanma, indubitably, Kula2316, bluebuckaroo, indigoblueskies, MuskokaGord

    we will expose and refute in detail the claims of the New Deal denialists.

    As always, mojo and/or recommendations are gratefully appreciated.

    "When the going gets tough, the tough get 'too big to fail'."

    by New Deal democrat on Mon Jan 05, 2009 at 04:36:53 AM PST

      •  then again (9+ / 0-)

        40% of Obama's stimulus plan is tax cuts--almost sounds like Reaganomics.

        •  I was very disappointed to hear that. (26+ / 0-)

          I know that Obama wants some of the Republicans to buy into this, but the old tax cut and spend Reaganomics was what got us into this mess in the first place. I would prefer to see help for the poorest Amercans than business tax cuts. If there is no demand, businesses are not going to invest. the porrest among us will take any stimulus and spend it.

          And I don't want to see Reagan's face on any currency!!!

          •  not even a (2+ / 0-)
            Recommended by:
            opinionated, blue jersey mom

            3 dollar bill?

            Looking for intelligent energy policy alternatives? Try here.

            by alizard on Mon Jan 05, 2009 at 05:15:52 AM PST

            [ Parent ]

          •  The idea that recession policy (1+ / 0-)
            Recommended by:
            blue jersey mom

            should remain after a recovery should probably enter the discussion. Tax cuts have an appropriate time and place.

            What stands out in Bondad's graphs is the 1938 trend anomoly.

            Moving on, finally.

            by fisheye on Mon Jan 05, 2009 at 07:14:24 AM PST

            [ Parent ]

          •  Not all tax cuts are equal. (11+ / 0-)

            The GOP playbook is tax cuts for the wealthiest individuals and largest corporations.  The Obama tax cuts seem to be targeted at middle class individuals and small businesses ... most of whom are owned by middle class earners.

            Not all tax cuts are Reaganomics.

            •  At what point do you get diminishing returns (3+ / 0-)
              Recommended by:
              Odysseus, GreyHawk, Ice Blue


              GOP talk show hosts love to claim that "even a Democrat--JFK--believed in tax cuts for the rich" but neglect that JFK cut the top rate from 90% to 70% (or thereabouts).  Now they're 38% and they want another cut...but when do we hit the same issue as the Federal Reserve and Interest rates?  The lower the rate, the less impact there'd be from a cut wouldn't there?

              "The truth will set you free. But not until it is finished with you." - David Foster Wallace

              by John Shade on Mon Jan 05, 2009 at 08:21:59 AM PST

              [ Parent ]

              •  Diminishing returns occur when the GOP wins. (8+ / 0-)

                Seriously, even in snarkiness.  

                The middle-class tax cuts aren't going to be without a restoral of tax levels to the upper 1%. (Tho that, last I recalled, might wait a year or two...if not for all, then for some of the tax levels to be restored.)

                The tax cuts for the wealthy and for corporations -- coupled with increased spending and debt-financed stupidity -- made a huge negative impact on the economy, and attempted to hide it by borrowing enough to give the appearance of growth.

                Growth without substance and not anchored to a strong foundation, however, is fleeting at best.

                So, relieving the tax burden on the middle class and restoring appropriate tax levels to the wealthy and corporations should still result in a net gain economically, and shake loose some middle-class capitol to strengthen the economy and bolster domestic spending.

                That, alone, won't resolve the issues facing us, but should provide some breathing room while building an economy based on sound economic principles -- none of that "tinkle-down" sh!t. (Yes, not a typo.)

                A corrupted government. Patriots branded as renegades. This is how we roll.

                by GreyHawk on Mon Jan 05, 2009 at 08:46:05 AM PST

                [ Parent ]

              •  Better term: "tax incentives?" (4+ / 0-)

                Basically the cuts Obama is proposing - apart from the middle-class tax cut he campaigned on throughout - are tax incentives for small businesses to hire new employees, green their energy profiles (which will also create jobs for those doing the greening), and the like.

                Many simply accelerate targeted small business deductions that that are already in the law, but that would not have been deductible until 2010.  Instead of appearing on the 2010 tax filing (for 2009 taxes), they can be deducted in April 2009 (from 2008 taxes) if the money has been spent by the time of filing.  In short, they give a retroactive 2008 tax deduction to small businesses that make targeted investments (new jobs, greener energy) in January-March 2009.

                For cash-strapped small businesses - and most small businesses are cash-strapped right now - that can be a major incentive to do immediately what they might otherwise be unwilling to risk.

          •  That depends on the use (5+ / 0-)

            If the tax cuts are, for example, for businesses that create jobs, bring them back from overseas, or offer better health insurance, or invest in infrastructure (primarily I'm thinking of railroads, who provide their own infrastructure, but I suspect there are others), then tax cuts are a great idea. Over the past thirty years, we've used tax cuts as a way of reducing the size of government, but tax cuts to induce behavior is a Democratic idea from long ago that needs to be revived.

        •  Tax cuts (3+ / 0-)
          Recommended by:
          New Deal democrat, Temmoku, DBunn

          One of the main benefits of tax cuts is that they can be almost immediate. The money gets into the economy fast. Spending requires time (what gets spent where) and is more subject to political considerations.

          I can live with doubt and uncertainty and not knowing. I think it is much more interesting to live not knowing than to have answers that might be wrong- Feynman

          by taonow on Mon Jan 05, 2009 at 04:57:41 AM PST

          [ Parent ]

            •  Look at the Hank Oettinger quote above (8+ / 0-)

              "...I never saw such a change of attitude. Instead of walking around feeling dreary and looking sorrowful, everybody was joyous. Like a feast day. They were toasting each other. They had money in their pockets for the first time...."

              Think they'd have been that happy with a taxcut?

              If Liberals really hated America we'd vote Republican

              by exlrrp on Mon Jan 05, 2009 at 05:05:23 AM PST

              [ Parent ]

              •  Hell no (9+ / 0-)

                They had no income to tax, hence no tax to cut.

                I would never die for my beliefs because I might be wrong. - Bertrand Russell
                -5.38, -6.41

                by sullivanst on Mon Jan 05, 2009 at 05:46:03 AM PST

                [ Parent ]

              •  Tax cuts only work for those... (14+ / 0-)

                that pay a lot of taxes.  Even with Obama's plan, the impact for wage earners will only be a couple bucks a week.  Is that enough to improve someones life?  Maybe they can go out and have a hamburger for lunch instead of that bolonie sandwich once a week

                The real solution is jobs, jobs and more jobs.  Stimulate demand for workers.  Put the unemployed to work, move the underemployed in to jobs that take advantage of their skills.  Put upward pressure on wages.  We need some wage inflation.

                If you mess with the tax code, give the advantage to labor over capital.  Increase the top rates to make it expensive for companies to pay outrageous executive salaries.  Ultimately it's either tax the rich or eat the rich, let them know it's their choice.

                I am here to represent the democratic wing of the Democratic Party.

                by Josiah Bartlett on Mon Jan 05, 2009 at 06:31:52 AM PST

                [ Parent ]

                •  You're Exactly Right Jobs, Jobs and More Jobs (7+ / 0-)

                  To get there the outflow of jobs overseas has to stop. You might be able to get some back here thru tax cuts, but how about tax penalties instead. Instead of treating work done overseas as a business expense treat it as income instead - then tax it.
                  Another thing we need to do is produce a worker shortage in this country. One, by doing the above, more jobs would be brought back in country. Two, by going after employers who hire illegal residents, which typically pay around 30% - 40% of the wages earned by legal residents for the same work, you reduce the over supply of workers killing 2 birds with one stone so to speak. You get Americans working again and increase wages at the same time.
                  Classic supply and demand.

                  •  sounds like (1+ / 0-)
                    Recommended by:
                    Josiah Bartlett

                    sound policy to me.  If China or all the other SE asian countries want to grow, they can learn how to develop their own economies by targeting what their people want and can afford with all the manufacturing capability that has been sent to them.  If they are waiting for the US to be able to import so much stuff as we have (that I don't want), they'll be waiting for a long, long time.  Turnips only have so much blood.

                    After 8 years of darkness, a great nation chose to reapply power to the beacon of light America stands for.

                    by FreeTradeIsYourEpitaph on Mon Jan 05, 2009 at 10:57:11 AM PST

                    [ Parent ]

            •  I believe Obama is proposing payroll tax credits (2+ / 0-)
              Recommended by:
              taonow, wader

              which would benefit the poor and middle class.

              He's also proposing some business tax cuts that I'm not sure about yet ...

              "I agree with you, I want to do it, now make me do it." - Franklin D. Roosevelt

              by jrooth on Mon Jan 05, 2009 at 06:50:31 AM PST

              [ Parent ]

              •  Not if we aren't working. (10+ / 0-)

                This stimulus package as announced does absolutely nothing for people like me -- long term unemployed.

                I pay no payroll tax, I have no income.

                Once again it looks like there will be a bunch of those of us who are the worst off who get nothing, nothing, nothing.

                "It always seems impossible until it's done." - Nelson Mandela

                by Brooke In Seattle on Mon Jan 05, 2009 at 07:42:21 AM PST

                [ Parent ]

                •  Well, tax cuts are only part of the proposal (0+ / 0-)

                  He also proposes stimulus spending that will create jobs.

                  "I agree with you, I want to do it, now make me do it." - Franklin D. Roosevelt

                  by jrooth on Mon Jan 05, 2009 at 08:25:04 AM PST

                  [ Parent ]

                •  This was something that bugged me during the (4+ / 0-)

                  election process...we would hear plenty during debates and on tv about the middle class, but no one seemed ready to mention the poor or lower class at all.

                  "The truth will set you free. But not until it is finished with you." - David Foster Wallace

                  by John Shade on Mon Jan 05, 2009 at 08:26:46 AM PST

                  [ Parent ]

                •  As one part of a larger plan... (0+ / 0-)

                  Payroll tax cuts will primarily benefit those earning a low to moderate income. It's not that we don't want to help those people.

                  The extra dollars in their monthly budgets will go to the local economy, to allowing some families to continue to make their mortgage payments, and/or to reducing household debt overhang (credit cards etc). It will reduce the rate at which even more people wind up in your situation, Brooke. These are good things.

                  A payroll tax cut will also help small businesses. Fewer layoffs (or more hiring), perhaps more or better health insurance benefits.

                  But I completely agree with your essential point-- tax cuts are of direct help only to those who have an income. We're going to need more than just tax cuts.

          •  I think that we need something long term. (17+ / 0-)

            I would much rather see something like the WPA that actually puts people to work and adds lasting value to this country. If we simply use tax cuts to buy cheap crap from China we are digging ourselves into a deeper and deeper hole.

          •  Immediate how? (10+ / 0-)

            You gotta wait until tax time to claw anything back. And tax cuts only help those who file.

            You've got it entirely backwards.

            Tax cuts have bad multipliers, too: in times of trouble, people deposit any tax cut. They don't spend it in the wider economy, so it doesn't stimulate the wider economy. For a case in point, just look at what happened to Bush's stimulus checks: they simply served to provide a spike in the personal savings rate, and did extremely little to drive the economy.

            Government spending is immediate, and has strong multiplier effects. If you give me a job today, and a pay check next week, I don't have to wait until at least next February to bank that check. If I go from being unemployed to full employment, I switch from worrying about buying food and paying mortgage and utilities, to being able to think about lifestyle spending again. My paycheck doesn't just benefit me: I spend it at the mall, and that helps stem the tide of retail job losses. Someone has to deliver the stuff I buy to the mall, and that boosts the struggling transport industry. Replacing the inventory that I just bought helps boost manufacturing... etc. etc. etc.

            I would never die for my beliefs because I might be wrong. - Bertrand Russell
            -5.38, -6.41

            by sullivanst on Mon Jan 05, 2009 at 05:52:14 AM PST

            [ Parent ]

            •  you are incorrect about tax (2+ / 0-)
              Recommended by:
              taonow, New Deal democrat

              cuts not being immediate.  They figure into with holding and are therefore immediate.

              As far as being part of the mix, I am neutral to dubious about their ability to do something for the economy.

              We need leadership which gets Americans to stop spending dollars on garbage.  Stop immediately.  Send all those plastic gadgets on teevee commercials into bankruptcy immediately.

              I want to see a 'buy no junk' exhortation from the podium.

              this ain't no party.. this ain't no disco.. this ain't no foolin'around..

              by fernan47 on Mon Jan 05, 2009 at 08:12:47 AM PST

              [ Parent ]

              •  Except that (1+ / 0-)
                Recommended by:

                many of those who need the money most don't have regular enough employment that their employers will correctly figure their withholding.

                I'm pretty sure my previous co-employer would have taken several months to correctly adjust my withholding in the event of a tax change. They weren't all that competent.

                Similarly, I'd expect a big chunk of the self-employed would not choose to recalculate their withholding. It's irritating enough with a steady salary and not having to do the employer-side calculations. For the self-employed it's a real pain in the ass, and a lot of them have plenty of stress already thank you very much.

                Even conceding the point, though, I'm a perfect example of why tax cuts aren't what we need. I'm middle class, with a decent job, my wife works too, we have three kids. I'm in the sweet spot for Obama's tax cuts. When they come, I won't spend a penny of them. Not a cent. We're stretched financially: not suffering, but we have insufficient reserves, so any and all tax cuts we get will be saved, not spent. In other words, a tax cut to me would yield an economic multiplier of 0.0 (the banks still aren't lending out when they receive extra capital, so it would seem they wouldn't invest my extra deposits), whereas creating a job for someone recently laid off from, say, Chrysler or GM would yield a multiplier of probably somewhere around 2.5.

                Buying junk actually plays an important economic role in normal times. These aren't normal times, but it would still be deeply harmful to attempt to stop it overnight when fully two thirds of all economic activity in this country is retail. The major problem, though, is that the cheap plastic junk bought in this country is almost universally not made here.

                I would never die for my beliefs because I might be wrong. - Bertrand Russell
                -5.38, -6.41

                by sullivanst on Mon Jan 05, 2009 at 08:31:03 AM PST

                [ Parent ]

                •  all this fine tuning of this (0+ / 0-)

                  sort seems beside the point to me.  No matter what we do, some people will not be caught up in the net directly.

                  All retail is not junk.  Good clothes, household products, even major electronics are not junk unless you buy an inferior brand.  Contaminated plastic toys are pure junk.  

                  And I do not consider putting your tax savings in the bank as negative, even in the short run.

                  Just because the bank does not go out the next day and make a loan doesn't mean it isn't a net gain for the overall economy.

                  People keep screaming that Americans need to save more and then equally scream if they don't spend their windfalls to stimulate the economy.  Be glad if you get some tax savings and not so worried about every dime going in the 'right' direction.  The important thing is to get the overall direction aimed correctly.

                  Fine tuning can come later.  We can't do everything at once.

                  this ain't no party.. this ain't no disco.. this ain't no foolin'around..

                  by fernan47 on Mon Jan 05, 2009 at 10:27:00 AM PST

                  [ Parent ]

                  •  It doesn't matter where you're pointed (1+ / 0-)
                    Recommended by:

                    if your foot isn't on the gas.

                    The simple fact is that it has been conclusively proven that tax cuts and rebates have a smaller effect than direct spending.

                    Obama has asked for lists of 'shovel ready' projects so that direct spending can start immediately, and those lists are already long; we don't need 40% of the two-year plan to be consumed by tax cuts for the purpose of 'immediacy'.

                    Krugman's math already hinted that the package as a whole might be too small, based on an assumed multiplier computed on the basis of a much higher proportion of direct spending than 60%. By increasing the proportion of tax cuts, you reduce the overall multiplier of the total package, which means the package has to be bigger to achieve the same effect. And as Krugman points out, it's very bad if the package is too small, much less bad if the package is bigger than it needed to be.

                    Shifting the emphasis away from spending may cause the package to fail. That is very concerning.

                    We probably can't come back and tweak this very easily with 41 Republicans in the Senate, who would quite happily allow the country to fail completely so they could carry on with raiding its assets while blaming Democrats.

                    I would never die for my beliefs because I might be wrong. - Bertrand Russell
                    -5.38, -6.41

                    by sullivanst on Mon Jan 05, 2009 at 11:05:19 AM PST

                    [ Parent ]

                    •  Only because (0+ / 0-)

                      The simple fact is that it has been conclusively proven that tax cuts and rebates have a smaller effect than direct spending.

                      That is only because people may save or pay down debt with some of the proceeds. This is not bad actually.

                      Plus if the government is borrowing from China at 0% (and uses that money to fund the tax reductions) and a person who receives a tax reduction uses the funds to pay down debt that had been at say 10% that is a great deal.

                      I can live with doubt and uncertainty and not knowing. I think it is much more interesting to live not knowing than to have answers that might be wrong- Feynman

                      by taonow on Mon Jan 05, 2009 at 02:25:18 PM PST

                      [ Parent ]

                      •  In the long term, saving isn't a horrible thing (1+ / 0-)
                        Recommended by:

                        But we don't borrow from China at 0%, so instead of individuals paying American banks at high rates, the country will be paying China at low rates. That's a net outflow of money from the country, which isn't a perfect situation.

                        In the short term, we have some problems which won't be solved by saving.

                        The CPI-U has fallen or remained exactly even each of the last four reported months. The decline appears to be accelerating: we are entering a deflationary spiral. This threatens to reduce not only the amount of a tax break that would be spent, but also the amount of workers' entire paychecks that get spent. As a further problem, in a deflationary spiral, business investment declines.

                        We're also in a classic liquidity trap: for all the Fed's rate cuts, credit is still not easily available. The reason being not that potential borrowers can't afford the rates, but that the banks don't trust anyone's credit-worthiness and certainly don't see the current rock-bottom interest rates as justifying their perceived risk.

                        So, the current state of play is that conditions will tend to make taxpayers (both individuals and corporations) save rather than spend their tax breaks, and banks will be more likely to keep rather than invest or loan out deposits. In other words, any tax break will be tucked under someone's mattress.

                        We need something that will break the deflationary spiral. FDR showed the way: direct government spending on projects that will benefit future generations.

                        The notion that when the economy is contracting, it's OK to be paying down debt is just a personalized version of the classical economic theory that caused the Great Depression and has us teetering on the verge of another. We need Keynsian counter-cyclical pressure, not classical positive feedback. Save when times are good, spend your way out of trouble.

                        I would never die for my beliefs because I might be wrong. - Bertrand Russell
                        -5.38, -6.41

                        by sullivanst on Mon Jan 05, 2009 at 03:37:01 PM PST

                        [ Parent ]

                        •  This is not (0+ / 0-)

                          This is not the same situation as the Great Depression. While I agree with much of what you wrote...

                          We need Keynsian counter-cyclical pressure, not classical positive feedback. Save when times are good, spend your way out of trouble.

                          ...unfortunately we spent tons when times were good. Now there is nothing left to spend.

                          It's interesting though to see Keynes' theories resurrected from the economic graveyard.

                          I can live with doubt and uncertainty and not knowing. I think it is much more interesting to live not knowing than to have answers that might be wrong- Feynman

                          by taonow on Mon Jan 05, 2009 at 05:14:25 PM PST

                          [ Parent ]

                          •  Yes, it is like the Great Depression (0+ / 0-)

                            unfortunately we spent tons when times were good. Now there is nothing left to spend.

                            That is exactly what happened back then, too. Admittedly national debt was a smaller fraction of GDP in 1932 than it is in 2009, but the world was not used to debtor nations at that time; now the debtor nation is the norm, so relative to fiscal culture our current national debt is no more alarming than it was back then.

                            We must never forget that the 1937-8 recession was caused in large part by a premature attempt to balance the budget. This is one part of the trickle-down argument that we must adopt: future growth will pay off today's borrowing. Because if we don't, future recession will erase today's saving.

                            I would never die for my beliefs because I might be wrong. - Bertrand Russell
                            -5.38, -6.41

                            by sullivanst on Tue Jan 06, 2009 at 06:04:37 AM PST

                            [ Parent ]

        •  I'm hoping the tax cuts will have a catch (5+ / 0-)

          and that you will get them for investing in alternative energy, mediation of global warming, creating new jobs, investment in LEED certified infrastructure, conservation of energy, letting employees telecommute, and have nothing to do with Reagans voodoo economics.

          I would support giving banks tax cuts for letting homeowners have morritoriums on their payments, renegotiate principal and reducing credit card interest rates.

          I would support letting tax cuts on alternative energy raise the relative cost on fossil fuels. That framing of rebates on alternative energy would sound good to the markets.

          Live Free or Die --- Investigate, Impeach, Incarcerate

          by rktect on Mon Jan 05, 2009 at 06:21:36 AM PST

          [ Parent ]

          •  They do. :) (1+ / 0-)
            Recommended by:

            Those are precisely the kinds of tax cuts I've read about in Obama's proposals.  It's not just more of the Reaganesque, make-the-rich-richer-and-they'll-let-the-rest-of-us-have-some-crumbs-eventually tax cutting.

        •  He wants to pacify the Rethugs..... (1+ / 0-)
          Recommended by:

          but I think 40% is way too much to give those bastards.

          If the people lead, the leaders will follow.

          by Mz Kleen on Mon Jan 05, 2009 at 07:14:19 AM PST

          [ Parent ]

    •  Thanks, NDd and Bonddad. I have learned (19+ / 0-)

      a lot from this series. I have a question for you both. It seems that one of the big differences between the Great Depression and the current economic mess is that today many consumers are saddled with lots of high interest debt from credit cards, payday loans, and especially medical debt How can we get consumers out from under the debt burdens?

    •  I look forward with delight to each of these (11+ / 0-)


      FDR was regarded as a hero in my home, even by my grandfather, a lifelong Republican and an executive at Goodyear Tire and Rubber Company who never lost his job.

      His view was that had Roosevelt not created a social safety net the nation would have faced revolution.

      Thanks for the reminders of the enormous accomplishments of the New Deal, as well as the predictable carping by conservatives.

      "If a free society cannot help the many who are poor, it cannot save the few who are rich." JFK - January 20, 1961

      by rontun on Mon Jan 05, 2009 at 04:45:19 AM PST

      [ Parent ]

    •  Alas, there is alreadt "bi-partisan" compromise (21+ / 0-)

      in the works for Social Security and Medicare/medicaid according to the NY Times: Obama Considers Major Expansion in Aid to Jobless

      It's the last paragraph that caught my eye:

      Among their ideas are a bipartisan commission to propose limits on future benefits for Social Security, Medicare and Medicaid, the entitlement programs whose projected future costs would squeeze out all other spending; a nonpartisan entity to designate infrastructure projects, like roads and public buildings, based on merit; and federal pay-as-you-go rules that require offsetting savings for spending increases and new tax cuts.

      (emphasis added)

      How does one aid the jobless by compromising what little remains of the social the safety net?

      "History is a tragedy, not a melodrama." - I.F.Stone

      by bigchin on Mon Jan 05, 2009 at 05:13:17 AM PST

      [ Parent ]

    •  One tiny nit to pick.... (1+ / 0-)
      Recommended by:
      Brooke In Seattle

      Let's answer that with this explanation about what makes a country tick.  GDP is composed of four categories: consumer spending, net private investment, exports and government spending.

      A country is not solely an economy, nor is an economy solely its GDP.  Thus, to explain "what makes a country tick" solely in terms of GDP components is, I think, a misstatement.

      That said, great diary. :)

      •  Not really a tiny nit. (1+ / 0-)
        Recommended by:

        The substitution of "what is counted by a dollar trading hands" for "what has value to the people" is the single most serious "crime" that economists of almost every stripe have committed against the rest of us. well, against themselves as well, really.

        I am further of the opinion that the President must be impeached and removed from office!

        by UntimelyRippd on Mon Jan 05, 2009 at 06:53:18 AM PST

        [ Parent ]

        •  Agreed, but.... (2+ / 0-)
          Recommended by:
          New Deal democrat, Piaffe

          In the overall context of what bonddad and NDD are trying to convey here, it's a tiny nit.  I don't think either of them mistakes "GDP growth" for "a healthy nation," though some economists treat those two as synonyms.  I'd happily invite economists who do to move to the Dominican Republic, which has had over 10% GDP growth recently - according to a friend who works their equivalent of our GAO - but where extreme poverty and hardships are still a fact of life for the majority of people.

        •  Some might argue that's a consensual crime (0+ / 0-)

          of the people. Especially on the family of the guy who got trampled to death at Wal-Mart on Long Island.

          And other's might argue that the emphasis this administration puts on perceptions and sentiments over government policy is over emphasised compared to measurable empirical reality.

          Moving on, finally.

          by fisheye on Mon Jan 05, 2009 at 07:09:28 AM PST

          [ Parent ]

    •  I went to the FDR Memorial in DC the other day. (9+ / 0-)

      At first I was disappointed because it was not as glorious as the Washington, Jefferson, and Lincoln Memorials. In fact, it was so understated that as I drove by trying to find it, I completely missed it, and had to do another lap around the area to get back to it.

      But once I got into it, I found it to be a stunning monument, not so much to the man, but to his ideas and to the people of his time.

      It was a beautiful walk through the history of the Depression and WWII in a way that connected it to both the past and the present.

      The quotes carved into the stone are as important to us today on a multitude of issues as they were then: War, Peace, Race, Compassion, Duty.

      Great blocks of granite and sculpted waterworks make up the heart of it, but the life-sized statues of FDR, people on bread lines, and others, made it real.

      If your going to DC for Obama's inauguration, I highly recommend it.

      The secret to a happy marriage: Say NO to drugs and YES to chores.

      by Jimdotz on Mon Jan 05, 2009 at 06:59:43 AM PST

      [ Parent ]

  •  I have no need of convincing when it comes to FDR (12+ / 0-)

    but I'm not sure that Obama will be able to pursue New Deal like spending. Hoover had not escalated the deficit like Bush II has. What happens when the world really stops buying treasuries? Print money? Hyper-inflation?

    I fear that the real S____ has not yet hit the fan.

    You may find yourself in a beautiful house with a beautiful wife and you may ask yourself, "How did I get here?"

    by FrankCornish on Mon Jan 05, 2009 at 04:40:54 AM PST

    •  When the world stops investing in us, they will (4+ / 0-)
      Recommended by:
      Aquarius40, Bobjack23, mofembot, wvmom

      ask for their money back and we'll be fucked.

      Then we'll be bathed in TV propaganda about how swell it would be to merge our economy with Mexico and Canada.

      •  if it comes to that (5+ / 0-)

        throwing canada and mexico in the black hole of the american economy won't really matter much. after all, mexico's oil fields are well on their way to going bust anyways.

        surf putah, your friendly neighborhood central valley samizdat

        by wu ming on Mon Jan 05, 2009 at 05:08:48 AM PST

        [ Parent ]

        •  It should probably be part of my sig (2+ / 0-)
          Recommended by:
          wu ming, DBunn

          but when I write stuff like that, it should be prefaced by "I am ever so happy to be completely wrong".

        •  That is no really the point of merger... (1+ / 0-)
          Recommended by:

          ...the old debt heavy state goes away, no America no debt. It's my opinion the Oligarchy who have stolen us blind for thirty years and put their gains in real property have had this as their solution from the get go. That is why I refer to them as thieves and TRATIORS.

          They get to keep their gains, while destroying the country along with its pesky Construction...literally. Of course all this is done under the rubric of increasing the Global community. They have real property to by a new currency with. We get screwed permanently, as do those holding dollars who have unknowingly financed the greatest robbery in history. Why do you think the Bush Administration has been negotiating a North American Union on the QT for our benefit...please?

          The young man who has not wept is a savage, and the old man who will not laugh is a fool. George Santayana

          by Bobjack23 on Mon Jan 05, 2009 at 06:25:41 AM PST

          [ Parent ]

          •  Correction "NOT really" (0+ / 0-)

            The young man who has not wept is a savage, and the old man who will not laugh is a fool. George Santayana

            by Bobjack23 on Mon Jan 05, 2009 at 06:26:39 AM PST

            [ Parent ]

          •  repudiating foreign creditors (1+ / 0-)
            Recommended by:

            essentially would end any likelihood of anyone ever buying a treasury bond again. to do so would be a very ballsey move, and i suspect the the new state would retaiun the bad feelings of those who had been buirned by its predecessors.

            in short, while i agree that we're getting jobbed, i have not seen much evidence that the north american union is a likely candidate for HOW we eventually get jobbed.

            at any rate, canada would be the ones most screwed in that setup. who wants the US?

            surf putah, your friendly neighborhood central valley samizdat

            by wu ming on Mon Jan 05, 2009 at 08:28:42 AM PST

            [ Parent ]

            •  Nevertheless... (0+ / 0-)

              Bush's governors have been negotiating it.

              Where did you get the idea that our greedy oligarchy...

              ...the new state would retain the bad feelings of those who had been burned by its predecessors.

     a rats arse about America or its any new amalgam it is merger into. States are just convent fictions to those bent on a Global system of multi-mega-national corporate governance and a New World Royalty(I like that...NWR is descriptively better than NWO or Globalism)based on wealth.

              The young man who has not wept is a savage, and the old man who will not laugh is a fool. George Santayana

              by Bobjack23 on Mon Jan 05, 2009 at 08:57:31 AM PST

              [ Parent ]

              •  it's not a matter of caring about america (0+ / 0-)

                it;'s the fact that any successor regime would not be able to borrow bupkis. so why the need for the new mega state fantasy scenario? why won't simple smash loot and discard suffice?

                surf putah, your friendly neighborhood central valley samizdat

                by wu ming on Mon Jan 05, 2009 at 09:03:44 AM PST

                [ Parent ]

                •  Old sport it is coming and there is a reason... (0+ / 0-)

         and learn (and if your not part of the Oligarchy’s home team suffer).

                  It is no fantasy anymore than the European Union was before it happen up on the European States. It is being negotiated out of public view at this time.

                  The young man who has not wept is a savage, and the old man who will not laugh is a fool. George Santayana

                  by Bobjack23 on Mon Jan 05, 2009 at 09:23:37 AM PST

                  [ Parent ]

            •  There are many possible bad resolutions (3+ / 0-)
              Recommended by:
              Sparhawk, bablhous, BlueOak

              ... to the preposterous financial mess that the financial boys have gotten us into. Our job is to find the good solution.

              How will we repay our huge debt? And why should the world continue to fund new US debt?

              A possible answer to the second question is, becasue it is in their interest to do so. For all our many faults, the US is still the largest single piece of the global economy. If we collapse, everything collapses.

              Keep in mind, anyone with money to buy T-bills is doing well within the current financial reality. If that system collapses or changes radically, what reason to they have to believe they will still do as well in whatever the successor state of things turns out to be?

              Here's another way to look at it: why have China etc been funding our debt up to now? Whatever their reason have been in the past, they still have those reasons. What is new is that there is now evidence that the US has not used the money wisely (to say the least-- heh). But if the Obama adminstration (and the rest of us) can convince lenders that new investment will be used wisely, then there is still reason for them to invest new money. It's too bad about the waste of the previous investment, but, outrage aside, that's water under the bridge.

              Now for the first question-- what about our existing debt. I have long argued that this is substantially uncollectable. Presumably, the holders of that debt know this. In business, situations like this are often resolved through restructuring of the debt-- lower interest, longer repayment schedule, and/or partial cancellation. The reason that creditors agree to restructuring is that some repayment is better than no repayment. So while they could demand full payment, they know we can't do it, and therefore there's no point in demanding it. It's true that they have a "gun to our head", but we also have our finger on a dead-man trigger that is wired to a bomb that blows up the entire world economy. No one wants to go there.

              I have no idea how we get out of this in the long term. But then again, in the long term we have to  overhaul the entire world economy in order to deal with the sustainability crisis. We've known that for a long time. The thing that would make me happiest would be if I thought the People In Charge knew that too, because if they don't, then nothing else we do or don't do about the economy will make any difference at all.

    •  I'd love to see NewDeal Dem (2+ / 0-)
      Recommended by:
      PsychoSavannah, Ice Blue

      answer this question.  This is one thing that is VERY different from the 1920s and early 1930s.  Is the interconnectedness of the financial system also different?

      Article 6: " religious test shall *ever* be required as a qualification to any office or public trust under the U.S."

      by billlaurelMD on Mon Jan 05, 2009 at 05:09:23 AM PST

      [ Parent ]

      •  Correct.. (10+ / 0-)

        In 1929 we were the world's biggest creditor.  Now we are the world's biggest debtor.

        Still in WW 2 the National Debt was up to 140% of GDP, and Japan's is about that now.  So long as interest rates on that debt stays low, it is sustainable.  If the interest rates soar, you get Latin American style inflation/debt collapse at the same time.

        I don't think we're there yet, but we are at the point where we've got to be careful imho.

        In inflationary spike by ~2010 wouldn't surprise me (especially if the bailout $$$ does start going thru the system), but although I agree with gjohnsit that Treasury rates at 0% have nowhere to go but up, I suspect that interest rates will not suddenly shoot to the moon.  Rather (and pessimistically) I expect them to begin to rise slowly and to continue to rise for the next 30 years.


        "When the going gets tough, the tough get 'too big to fail'."

        by New Deal democrat on Mon Jan 05, 2009 at 05:17:33 AM PST

        [ Parent ]

  •  Thanks BondDad (11+ / 0-)

    Amazing how Reaganomics is orthodoxy and the facts of the Great Depression are forgotten.

    We need to repeat these narratives everywhere so that people get it.

    Thanks for making them so accessible!

  •  There is so much good information in this diary. (11+ / 0-)

    I particularly liked the part about the Civilian Conservation Corps... I think we need a new CCC for the 21st century.

  •  Spectacular info, Bondad. (12+ / 0-)

    And this would make modern conservative heads explode if enacted today:

    The program built many public buildings, projects and roads and operated large arts, drama, media and literacy projects, employing actors, artists, musicians, and writers (nearly 4 million in 1936 alone).

    The secret to a happy marriage: Say NO to drugs and YES to chores.

    by Jimdotz on Mon Jan 05, 2009 at 05:05:40 AM PST

  •  My Dad was in the CC corps. The best part of the (10+ / 0-)

    depression for him.  It beat the hell out of bread lines, soup kitchens, and beatings from his Dad.

    "I am my own forerunner"

    by Cassandra77 on Mon Jan 05, 2009 at 05:10:24 AM PST

  •  I am still saying the depression didn't end (2+ / 0-)
    Recommended by:
    Vacationland, MGross

    until WWII.  The numbers you show always miss the most important number, which is unemployment.  While it improved from its low (it almost had to), 10% unemployment is simply not a recovery and is definitely still depression territory.  FDR did some great things that benefited the country for the next 70+ years, but in fact the depression didn't end until we started ramping up arms sales in 1939.

    •  Fine, but (12+ / 0-)

      what could FDR have done that would have made it end sooner?  The RW echo chamber thinks that continuing Hoover's policies would have done so (without any empirical proof), and there would have been much more poverty and starvation to pay for the alleged "higher employment."

      We'll discuss much more of that in part 4.

      "When the going gets tough, the tough get 'too big to fail'."

      by New Deal democrat on Mon Jan 05, 2009 at 05:22:31 AM PST

      [ Parent ]

      •  He could have started building (0+ / 0-)

        up our military in 36/37 instead of use being caught almost defenseless at the start of WWII.

        "The most virtuous hearts have a touch of hell's own fire in them" Tennyson

        by Void Indigo on Mon Jan 05, 2009 at 05:53:31 AM PST

        [ Parent ]

        •  This is a common canard. (10+ / 0-)

          U.S. defense preparedness was not inadequate in 1941.  Japan's run of success lasted only six months after Pearl Harbor - as Yamamoto had predicted - and much of that was the capture of British, French, and Dutch territories in the South Pacific.  The only major U.S. territorial loss was the Philippines.  Arguing that the U.S. could have defeated Japan any faster than we did, or indeed have prevented her expansion, is very speculative at best.

          As to Germany, it's true that eleven months passed before the U.S. was ready to put ground troops into North Africa, and 30 months passed before we were ready to land in Northwest Europe.  Both of those had more to do with merchant shipping tonnage than with the size of our military.  As it happened, the time required to upgrade our merchant fleet was the same as the time needed to build up our military, and we did them simultaneously.  That is to say, by the time we had a military big enough to invade Europe, we had sufficient shipping to transport and support them, and by the time we had sufficient shipping to transport and support them, we had a big enough military for the operation.

          Moreover, both our military and merchant fleet were state of the art in 1944 largely because we had the benefit of lessons learned from others' mistakes in 1939-1940.  We didn't have the burden of obsolete shipping, nor of obsolete military organizations or equipment, which we would have had if we'd begun a buildup much before we did.

          •  Not inadequate? (4+ / 0-)

            We didn't have the burden of obsolete shipping, nor of obsolete military organizations or equipment, which we would have had if we'd begun a buildup much before we did

            The AAF had P40's and P39's as main line fighters. Both were obsolete by 1941. The Army was still armed with 03 Springfield's while the Garand was ramping up. We had no real tank, the M3 and M5 were obsolete in 1941. Our navy had good fighters and dive bombers but the torpedo bomber was a tragedy. Torpedoes for our submarines didn't detonate consistently.

            Tactically our Army and Navy needed improvement thru training and experimentation observing the lessons learned in Spain and China prior to WWII and German tactics after the start of WWII.

            We didn't have obsolete military organizations or equipment to a large degree because we didn't have those things to start with.

            "The most virtuous hearts have a touch of hell's own fire in them" Tennyson

            by Void Indigo on Mon Jan 05, 2009 at 06:59:13 AM PST

            [ Parent ]

            •  That was my point! (5+ / 0-)

              We didn't have obsolete military organizations or equipment to a large degree because we didn't have those things to start with.

              That was my point.  Had we invested heavily in our military in 1936-37, much of what we'd built would have been obsolete when we began operations in 1942.  No one - not even the Germans - really knew what the practical requirements of modern war were in 1936-37, and every nation that had invested heavily in what they thought would be the practical requirements of modern war later paid a heavy price in both technical and tactical obsolescence.

              The U.S. was not burdened by that obsolescence.  And by the time we had sufficient shipping tonnage to engage in major operations, we'd built a military large enough and modern enough - in both equipment and doctrine - to fight effectively.

            •  our defense systems were wholly adequate (6+ / 0-)

              for protecting the territorial integrity of the United States of America.

              which is all they should ever be.

              FDR could have spent more on useful public infrastructure programs -- but as was noted in one of the earlier posts, the official unemployment figures being reported don't include people working in government work programs. which is a stupid point of ideology, not of economic reality. the actual unemployment figures would have been lower than the 10% you continue to cite.

              I am further of the opinion that the President must be impeached and removed from office!

              by UntimelyRippd on Mon Jan 05, 2009 at 07:23:38 AM PST

              [ Parent ]

            •  I read a book by one man who was drafted in, (1+ / 0-)
              Recommended by:
              New Deal democrat

              IIRC, 1938.  His first assignment was to the goddamn horse cavalry.

              He wrote of training troops to use mortars with a baseball bat and a cushioned base.

              The problem wasn't lack of training as much as lack of equipment.

              A jackass can kick down a barn but it takes a carpenter to build one.--Sam Rayburn (D-TX)

              by Ice Blue on Mon Jan 05, 2009 at 10:33:12 AM PST

              [ Parent ]

            •  What's wrong with Springfield rifles? (0+ / 0-)

              No other country at the start of the war had a semi-auto rifle as the standard issue.  We were the only ones for the bulk of the war for whom a semi-auto rifle was anywhere near standard-issue.  All others used such bolt-action rifles.  Our equipment was on par with what most of the rest of the world used.  The Germans had some better armored vehicles, but the extent of their motorization is generally vastly exaggerated.  Some had better aircraft, but we did alright.  We lost the war for the first six months, then we came back and kicked their asses almost without exception.

              -5.38, -5.90 Deus mihi iustitiam dabit.

              by cjallen on Mon Jan 05, 2009 at 10:47:13 AM PST

              [ Parent ]

        •  With Congressional approval you mean. (6+ / 0-)

          Until Germany started massive air campaigns against England, Americans largely wanted no part of engaging in the war.

          Moving on, finally.

          by fisheye on Mon Jan 05, 2009 at 07:03:26 AM PST

          [ Parent ]

          •  Even later than that.... (3+ / 0-)
            Recommended by:
            Ice Blue, New Deal democrat, fisheye

            FDR had to promise "no more foreign wars" as late as October 1940, in the midst of the London Blitz.  In terms of war with Germany, the political tipping point was the sinking of the U.S.S. Reuben James (11 October 1941).

            •  Which if I recall (2+ / 0-)
              Recommended by:
              fisheye, NCrissieB

              the sinking of the U.S.S. Reuben James (11 October 1941)

              correctly was escorting a convoy to England and in international waters. That was a violation of neutrality and thus a legal target.  

              "The most virtuous hearts have a touch of hell's own fire in them" Tennyson

              by Void Indigo on Mon Jan 05, 2009 at 07:40:41 AM PST

              [ Parent ]

              •  Yes. FDR played a dangerous game there. (3+ / 0-)
                Recommended by:
                semiot, Ice Blue, fisheye

                FDR clearly violated the Neutrality Act in authorizing U.S. warships to escort convoys across the Atlantic, even if the convoys contained U.S.-registered merchant ships (and they did).  That's why FDR couldn't ask Congress to treat the sinking of the Reuben James as an outright causus belli.  It did, however, lead to the repeal of many provisions of the Neutrality Act, and swung key senators in favor of further engagement on Britain's behalf.

                Even had the Japanese never launched their Winter 1941 offensive - Pearl Harbor and near simultaneous attacks on the Philippines, Malaysia, Hong Kong, and the East Indies - it's likely that our escalation of naval activity in the Atlantic would have triggered a causus belli sometime in 1942.

                Regardless, the brake on U.S. major operations in 1942-1944 was the size of our merchant fleet, and thus we could not have effectively used a larger military any sooner than we had one.  Not beginning our military buildup until late 1940 allowed us to take better advantage of lessons learned in Poland and (especially) France and the Battle of Britain.

                We still had some bad doctrine and "mis-builds" to overcome - tank destroyers are the most obvious, our wholly inadequate personnel replacement system was another - but we had much less of either than any other major combatant.

        •  Whoa. In the late '30s, there was a battle (2+ / 0-)
          Recommended by:
          New Deal democrat, cjallen

          taking place in this country between the isolationists (the people who wanted the US to stay out of the war in Europe) and the interventionists (those who wanted the US to come to the aid of Great Britain).  The pressure was on FDR from foreign leaders, yet lot of Americans were adamantly against a repeat of WWI.

          Further, Charles Lindburg was still one of the most popular men in America.  He was a frontman for the isolationist movement.  He had toured Nazi armaments factories and knew America would take a beating if we went to war against Germany.  

          The War Department, however, was trying to gear up with what little funding they got from Congress.

          This debate wasn't settled 'til Pearl Harbor.

          A jackass can kick down a barn but it takes a carpenter to build one.--Sam Rayburn (D-TX)

          by Ice Blue on Mon Jan 05, 2009 at 10:23:50 AM PST

          [ Parent ]

    •  asdf (9+ / 0-)

      I don't disagree with that assessment.  But I think it's important to remember a few points.

      1.) The economy experienced severe damage at the beginning of the decade when unemployment spiked over 20%.  That's a very high rate to deal with.

      2.) In general the number kept moving lower for most of the decade (save the 38 recession).

      "You think you can intimidate me? Screw you. Choose your Weapon." Eliot Spitzer

      by bonddad on Mon Jan 05, 2009 at 05:22:55 AM PST

      [ Parent ]

      •  According to NBER (0+ / 0-)

        the first leg of the depression ended in March of '33, before FDR even took office, so we really have no way to know whether FDR's policies actually caused the growth rate or whether the economy was turning on its own anyways.  We do know that his policies have helped the economy over the last 70 years, but have essentially no way to say that his policies actually ended the depression (as opposed to say the confidence his election inspired).

        •  FDR's Emergency Banking Act was the turn (0+ / 0-)

          Roosevelt was sworn in on March 4, 1933.  Within the week he had declared a 4 day banking holiday, and then the banks reopened under the Emergency Banking Act.  That marked the turning point of the Depression as noted so nicely by the NBER.


          "When the going gets tough, the tough get 'too big to fail'."

          by New Deal democrat on Mon Jan 05, 2009 at 11:36:50 AM PST

          [ Parent ]

    •  FDR was opposed fiercely by industry (11+ / 0-)

      corporatists, and right wingers of his day. One can only imagine the battle for social security. It is akin to the battle for universal healthcare today. It aint gonna happen without a battle.

      The NeoCOM (Corporate Owned Media) is Neocon.

      by Brahman Colorado on Mon Jan 05, 2009 at 05:34:18 AM PST

      [ Parent ]

      •  You can read about it (1+ / 0-)
        Recommended by:
        Ice Blue

        at  There is a lot of info about creating Social Security there.

        Once I read about how hard a time the republicans gave FDR to keep him from creating Social Security. I couldn't find it the last time I looked, but that doesn't mean it isn't on there. It just means I couldn't find it.

        My father in law was given a job building county roads.  There is a big, wide dirt road near us that is called 'Commonwealth Road' that he helped build.  He didn't have a job until then. Those roads helped open up land that people couldn't get to before, too. They are still used by a lot of people.  We are lucky to have rocky and clay mud which makes strong road beds.

        My dad worked through the depression, but he lost $500 investing in a railroad stock.  At that time you could buy a home for that much money or lots of land.  He never invested in anything again.

    •  How do you compare employment (4+ / 0-)

      statistics of post and pre depression when the working conditions were so drastically altered? If minimum wage were illiminated today, employment would rise. What does that mean? I think the point is the trend not a snapshot. What meaning does repeating this labor statistic have to the health and long term security of the economy?

      What difference does it make what the government expenditure was on? Defense spending or public works? You saying they didn't go far enough into debt and government spending prior to the buildup for the war? That's hardly a case for laissez fair alternative to the New Deal.

      Moving on, finally.

      by fisheye on Mon Jan 05, 2009 at 07:00:44 AM PST

      [ Parent ]

  •  I worked at (6+ / 0-)

    Queens Hospital Ctr in NYC, about 2 miles from St Johns Univ. One of the buildings on our campus was formerly a "Tuberculosis Hospital" built during the depression. Finally, it came time for major renovation and a new strategic plan for the hospital. This was around 1998.

    During the prep phrase of our renovation the engineering and maintenance guys were sent to the basement of the "TB" building to commence clean up and disposal. One of the maintenance guys found a treasure trove of well preserved depression-era murals, all in the style you see depicted by Bonddad and NDD in this diary.

    Made quite a media splash. The maintenance crew who found the murals were feated by the Mayors office and the murals made the rounds in the City.  

  •  Pre Ronald Reagan (4+ / 0-)

    I've read all your diaries in this series and it brings back stories from my grandparents. It is odd to see the numbers and facts and see them put to graphs and facts. When it comes to finances, much of it is emotional when all is lost.

    I was thinking you were making a plea for the same type of new deal, and I would applaud that but in order for it to happen what truly must be looked at is that Contract with Corporations, whoops America .

    Ronald Reagan started the fascism and that is huge-the ownership society was a crock then and now it is shown to be true bullshit.
    I wish I could have about 2 months to talk to you , I could learn a ton of shit. I wish I had more drive to put effort in like you but I am old and I really only got a computer for porn.

  •  Perhaps a bit off topic (9+ / 0-)

    But this seems as good a diary as any to bring up the question.
    With all the strings being attached to bailouts to the auto industry, requiring them to re-organize and come up with a sustainable business model, one model I haven't heard any discussion of yet, even from the UAW, is employee ownership.
    Wouldn't this be a good opportunity for progressive groups, such as unions presumably, to push for a large company that is failing under it's current business model to try this?
    Do you have any opinion on the subject?
    Nice work by the way.

  •  A country without a significant number of (7+ / 0-)

    life sustaining jobs is doomed. I suggest the debate is always the same, i.e., how does a society generate/create sufficient jobs and/or industries that employ significant numbers of workers and that pay sufficient wages to allow its workers to live a middle class life. Presently America is at war with itself in attempting to determine how and/or what industries to create/support that will be America's economic engine for the next 15-25 years. Of these matters there is only one of which I am certain, lack of leadership got us here and it will be leadership that returns us to some degree of normalcy.

    Dreams have a way of betraying you when you use them to escape. Ask yourself why you dream what you dream.

    by brjzn on Mon Jan 05, 2009 at 05:53:23 AM PST

  •  Two Questions (6+ / 0-)

    Great series guys and good commentary.

    I have two questions

    1. How does the population increase from the 1930s affect any solutions used by FDR in the Great Depression to solve today's financial crisis?
    1. Similarly how does the depletion of natural resources, i.e. oil, metals, etc. affect the solutions vis a vis the 1930s?
    •  Good questions (0+ / 0-)

      I don't think the population increase would materially affect solutions, but natural resource depletion is a problem globally and would have an effect, although I can't honestly say I've thought through the ramifications in any sort of precise detail.


      "When the going gets tough, the tough get 'too big to fail'."

      by New Deal democrat on Mon Jan 05, 2009 at 11:54:24 AM PST

      [ Parent ]

  •  My Dad (and his family) were saved by CCC (6+ / 0-)

    They were Ohio farmers and already just barely scraping by when the Depression hit. My father used to talk about how things were before the New Deal; for example, the state of the elderly poor before Social Security. He said that if people didn't have family to take them in, they wore rags and starved.

  •  Off topic but (0+ / 0-)

    I figured the best people to answer might look here.

    We might refinance our mortage today.  Our current rate is 5.875, last week it was 4.75, but today it looks to be at 5.00.  I don't know if I should refinance or wait and see if it'll go back lower.

  •  clarification... (2+ / 0-)
    Recommended by:
    semiot, LI Mike

    about the National Labor Relations Act, or the Wagner Act of 1935.

    It protected the rights of some workers, not most, to unionize (agricultural workers were left out, as a nod to the southern and western elites' interests in maintaining pseudo-slavery in the fields).

    It did NOT, as bonddad writes, protect the right of unions to strike. Workers picketing in order to form a union is one thing (and not covered by the act), an existing union being able to strike is something completely different, and the NLRA strips that right in most circumstances. If a contract is expired, and the union can demonstrate that the employer is not bargaining in "good faith," then they can strike. But since hiring scabs ("permanent replacement workers") is legal here in the U.S. (unlike other countries), the strike loses much of its potential strength.

    Remember, the point of the NLRA was not to empower workers - quite the contrary. The point was to create "industrial peace." We needed to get the economy moving again, and there were strikes, work stoppages, and wildcats all over the country. The NLRA created government-endorsed unionization that could meet the economic needs of U.S. manufacturers, and calm down workers.

    Imagine workers, getting organized and fighting for their rights, as a piping hot, delicious cup of black coffee. Mmmm! Now, imagine pouring an equal amount of cold half-and-half into the cup. The half-and-half is the NLRA.

    As for what the NLRA has evolved into since 1935 - arguably a tool for employers to stop unionization - that's another story.

    Rise like lions after slumber in unvanquishable number. Shake your chains to earth like dew, which in sleep had fallen on you. Ye are many - they are few.

    by cruz on Mon Jan 05, 2009 at 06:33:57 AM PST

    •  This is why so many (0+ / 0-)

      careers want a minimum amount of training, certification, etc., so that scab replacement takes more time.  This is why cutting down the training time for flight attendants was such a big deal.

      There are bagels in the fridge

      by Sychotic1 on Mon Jan 05, 2009 at 07:13:14 AM PST

      [ Parent ]

  •  What Effect Did Supreme Court Have (4+ / 0-)

    striking down some programs c. 1936 or so?

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Mon Jan 05, 2009 at 06:59:02 AM PST

    •  Excellent question! (4+ / 0-)

      I'd love to hear what bonddad and NDD offer for an answer.  My answer would be "enough to goad FDR into the court-packing fiasco," but I really don't know how much those decisions factored into the economic downturn in 1937-38.

      And therein lies one of the huge problems with any such project.  We're dealing with issues of complex causation, where there are multiple, overlapping causal actors with divergent and convergent effects, not to mention the sheer stochastic randomness - the things government policy can't control but that still affect the outcomes of government policies - that we should always factor into such discussions.

      •  I would agree with your Answer (1+ / 0-)
        Recommended by:

        Google the book "Since Yesterday", it is available in its entirety online.  The Supreme Court provoked a constitutional crisis by striking down many of the original New Deal enactments (chiefly the NIRA).

        Roosevelt resolved to fight them, and took a pasting over the court-packing plan, but fortunately the Justices were old and a few of them died or retired.  Replacing them with Justices Black, Douglas, and Frankfurter did the trick.


        "When the going gets tough, the tough get 'too big to fail'."

        by New Deal democrat on Mon Jan 05, 2009 at 11:40:37 AM PST

        [ Parent ]

  •  The Housing acts have led to Suburban sprawl (0+ / 0-)

    and a living style that squanders our resources.

    •  More than the housing acts (0+ / 0-)

      Our investment in roads rather than mass transit, the developers' and builders' lobbies and the belief by government officials from the local to the national that development brings in local taxes and income contributed greatly to sprawl.  Government officials fixed tax policies and laws to favor suburban new housing over maintaining existing housing stock in the cities believing all growth was good.  Support for urban centers eroded and the inevitable decline of our great cities exploded.  If people can't send their kids to the local public schools, they leave if they can.  Those who can't afford to are stuck.  

      This is how we got ourselves into spiraling out of control property taxes to support local infrastructure in the burbs for schools, roads, police, fire, etc.  Houses run a tax deficit.  But it's all good for developers and builders.  They take the money and run, don't pay for the real cost of development and stick it to the existing and future residents to pay for the needed infrastructure.

      •  A Product of Circumstances. (0+ / 0-)

            Right after WW2 there was a fairly serious housing shortage, the product of pent-up demand with millions of new families and millions of boomer babies, including yours truly.  There was predictably intense political pressure to do something and the immediate means to do it--GI and FHA housing loans.  So guess how much resistance there was to uncontrolled suburban sprawl?  Zippo.
            Add to that the fact that the US was still an oil exporting country in the post WW2 period with gasoline costing two bits a gallon. You can guess how much resistance there was to the intense industry lobbying for the Interstate Highway System. Not a heckuva lot.
            The British are said to have created their empire in a fit of absent-mindedness.  You could argue that post-1945 Americans created what's becoming an increasingly dysfunctional way of of life in much the same way.  

        •  unitended consequences (0+ / 0-)

          I believe the oil and auto companies acted with purpose but I think local and state officials probably didn't have that much forsight.  Remember, that this country has a long tradition of almost unencumbered property rights that plays beautifully into uncontrolled development.  It was like a perfect storm, a huge need for housing, more income, and a lobby to build roads and not mass transit.

    •  Unintended consequences of well meaning (0+ / 0-)

      legislation.  It happens.

      -5.38, -5.90 Deus mihi iustitiam dabit.

      by cjallen on Mon Jan 05, 2009 at 10:49:38 AM PST

      [ Parent ]

      •  yep (0+ / 0-)

        I was on my township's planning commission in the 80's in 90's in the suburban northeast.  We had a terrible time handling the housing boom then.  It was hard to keep up with all the court decisions like Mt. Laurel and hard to keep our ordinances up to date.  School taxes skyrocketed because the district was getting 1000 new students/year.  Of course there was no help from the state or federal government.  The developers need to pay for the real cost of development - schools, water, sewer plants, roads and intersection improvements, fire, police, etc.

  •  Great Depression not that useful guide in 2008 (0+ / 0-)

    For a number of reasons, the main one is the changes made after the Great Depression to provide counter cyclical help.

    The result is that government spending on direct payments to individuals is a huge part of Federal Budget now and it was not in 1930's.

    1. Social Security - it was implemented because people lacked a financial safety net in retirement and disability.
    1. Unemployment - it was implemented so that when people did lose their jobs that six months of income.
    1. Medicaid/Medicare - pumps a lot of money into the health care industry.
    1. Various social welfare programs which are big part of state and Federal budgets.

    The real question today is what types of Keynesian counter cyclical stimulus programs are needed.

    Long term, next eight years, Obama's overall plan to rebuild US economy as a green economy, alternative energy industry which studies from Brookings, RAND and others show has huge job potential, is sound.  

    Short term, next two years, immediate stimulus can be provided via infrastructure spending, schools, bridges, water/sewer plants that are on the books and ready to go and which provide the backbone for economic expansion going forward.

    •  Medicare (0+ / 0-)

      was started because the insurance companies charged the elderly more and they couldn't afford the payments.  

      Insurance companies should not be in the Medicare or Medicaid programs.  They have to have their profit and we don't need them.  Also, Bush screwed it up royaly when he and his minions put in the no bid clauses, etc.

      They have deliberately made it too expensive to survive.  For instance, you could buy an oxygen tank for $750 a few years ago, now they pay close to that for rent on them for a year instead of buying them.

      They say Medicare and it's supplements and copays are going to go sky high next year.  We need to nip that in the bud.

  •  my dad was in the ccc (11+ / 0-)

    He spoke fondly of the ccc program and I think it helped his family tremendously.  He lost his father in 1932 when my dad was only 14 yrs. old.  His mother still had 2 kids at home and they had lost their farm two years before due to the gas company leaking something that poisoned their goats.  This was in WV and immigrant Italians didn't stand a chance in court.  Their lawyer sold them out.  They had sold goat milk to the TB sanitarium and raised vegetables and a hogs just to feed themselves.  So my grandmother, who didn't speak English, depended on her older son and my dad to work.  My dad did odd jobs if he could find them and did graduate high school at 16.  He went to the cc camp.  Apparently, the program sent most of the earnings home.  My dad was able to save enough to attend a local college and get a degree.  He went to Detroit and was draft deferred through the war to work for Ford's manufacturing airplanes.  He continued his education earning a Ph.D., raised six kids and put us all through college.  I believe the investment made by us in the New Deal paid off big time.  

    It's clear we need to reinvest in our citizens and infrastructure.  It will pay off just like the New Deal and athe GI Bill did.

    •  great micro history domestic goddess! (2+ / 0-)
      Recommended by:
      Dave in RI, AmericanRiverCanyon

      thanks for the small picture of the world back then, it helps to contextualize this fine diary with your family's experience

      ...there's a rose in the fisted glove and the eagle flies with the dove - Stephen Stills

      by NuttyProf on Mon Jan 05, 2009 at 11:13:30 AM PST

      [ Parent ]

      •  thanks (0+ / 0-)

        Can you tell I majored in history?  I relished all the stories in my family.  My mother's side is interesting too.  They were Italians on the Iron Range in Minnesota, dontcha know.  Believe it or not, there were Italians in northern Minnesota.  My grandmother was divorced with three kids living with her parents and running their boarding house.  My great grandfather raised vegetables in open plots of land and sold the excess.  My mother, once she reached adulthood, would not pick any berry or can any fruit or vegetable.  Apparently, she spent her childhood summers doing just that.  They pretty much fed themselves this way.  My grandmother did remarry and her husband was a professional gambler and bootlegged wine during prohibition.  When manufacturing returned, they moved to Detroit just before the war and that's how my parents met.  My grandfather stilled gambled to supplement their income.  He was really professional in that he never bet anything but his seed money.  He played poker and pinochle and memorized cards.  He was something to watch.

  •  Nice one. (0+ / 0-)

    Couple of points:

    ---How much did repeal of Smoot-Hawley in '36 (?) and attempts to expand foreign trade factor in?

    ---Was part of the '37-'38 recession a function of public debt crowding out private debt, as in the late 1980s and early 1990s? Is that the reason for the attempt to balance the budget?  

  •  We need to find the Roosevelt papers on (0+ / 0-)

    Leland Olds which may be located in Hyde Park in the Roosevelt Library..Leland Olds electrified rural America and he was a bit of a genius .. he was also one of the most brilliant people in the Roosevelt administration who truly worked for the benefit of the people..

  •  Note On Employment for the WPA (3+ / 0-)

    as just the main employer of the New Deal system, providing 8 million jobs sounds stupendous today, but it's even more shocking if you adjust the numbers for population.

    Around 1920 was the time that the U.S. hit the 100 million mark. If you multiped those 8 million jobs by 2.5-3 (which is conservative since we're at over 300 million citizens today) you'd have 20-24 million jobs just from the WPA.

    The WPA employed actors, creating the first opportunity for many people to see full-production plays in their entire lives. That work ran at a loss, but it was managed effectively to ensure the most bang for the buck.

    Schools were built, cabins and campsites were created, dikes and levees constructed. Really, any any everything was the gist of it.

    When such human rights luminaries and the best Republican minds call Hugo Chavez a "thug" and a brutal dictator, how could you possibly disagree?

    by Nulwee on Mon Jan 05, 2009 at 10:07:14 AM PST

  •  Bonddad - Invisible Hand Believer? (1+ / 0-)
    Recommended by:

    While FDR enacted many noble reforms, he didn't end the Depression because he ignored J.M.Keynes' call in 1936 for government stimulus to end the gluts of agriculture and manufacturing products on the market.

    Only WWII ended the Depression when demand exceeded supply.

    Bonddad hasn't called for any direct stimulus to consumption to end the glut of cars and houses on the market.  So is he actually a classical "Invisible Hand" guy?

  •  just finished a bio of roosevelt (0+ / 0-)

    which touched on the Supremes' concerted defense against some of those bills.

    What we call god is merely a living creature with superior technology & understanding. If their fragile egos demand prayer, they lose that superiority.

    by agnostic on Mon Jan 05, 2009 at 10:41:09 AM PST

  •  I'd trade a great depression for just a good one. (0+ / 0-)

    just saying.

    Nice collection of stuff here, thanks.

    What we call god is merely a living creature with superior technology & understanding. If their fragile egos demand prayer, they lose that superiority.

    by agnostic on Mon Jan 05, 2009 at 10:44:10 AM PST

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