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Henry Morgenthau, Jr., one of the worst Treasury Secretaries ever.
You have probably heard a lot about 1937, when FDR made his gravest economic policy mistake, and made deep cuts to federal spending (the chief deficit hawk of the day—Henry Morgenthau, Jr. was FDR's treasury secretary), thinking the Great Depression was beaten back. At least, most credible economists and historians see it that way. Paul Krugman recently wrote about Europe's futile chase for the "confidence fairy":
Back in 2009, when there was (briefly) a policy consensus in favor of active fiscal policy to fight the slump, there were many warnings to the effect that we must not repeat the infamous mistake of 1937, in which FDR was persuaded to focus on balancing the budget while the economy was still weak, terminating the recovery from 1933 and sending America into the second leg of the Great Depression.
Amity Shlaes (yes, her), sees it differently:
Will 2013 be 1937? This is the question many analysts are posing as the stock market has dropped after the U.S. election. On Nov. 16, they noted that industrial production, a crucial figure, dropped as well.
Hey, even Amity Shlaes has learned the lessons of ... wait, what? Shlaes says 1937 happened because FDR was not credible as a budget cutter? That cuts were not deep enough. Ay yay yay:
The obvious question is why an announcement by Obama or Roosevelt to cut back just after the election doesn’t reassure those who dislike government expansion. [...] The answer is that the markets, which observe a giant march forward and then a step backward, don’t believe the step back is permanent. Giants are giants. Expansionists tend to revert to expanding government, as FDR did, most drastically, in World War II. The mandate matters more than the austerity chatter.
Ahhh. The confidence fairy. Shlaes knows this in "her gut," the way Dick Morris knew in his gut that Romney would win in a landslide. But like Morris, Shlaes is full of shit. Marshall Auerback of the Roosevelt Institute explains by taking apart actual alleged analysis, as opposed to listening to your gut:
[T]he FDR revisionists, who disapprove of fiscal policy measures of any kind, have come back. Now they’re brandishing the old arguments that “excessive” government spending risks “crowding out” private spending, making it impossible for the US government to deal with the recession (because it has run out of money) and hindering the capacity of the private sector to recover because of too much government interference in the “free market”. These complaints are usually accompanied by a wave of rhetoric condemning the “business un-friendly” policies of the current Administration, along with dire warnings of a “national solvency” crisis. After all, fiscal austerians are nothing, if not fully predictable.

Was the 1937 Relapse Caused by Increased Taxes and Unions?

In that context, we have to give some credit to Professors Thomas Cooley and Lee Ohanian, who have taken a more novel approach in their critique of the New Deal. In some respects, they actually validate the case for fiscal policy expansion (although the two authors might not see it that way). Cooley and Ohanian argue that:

“The economy did not tank in 1937 because government spending declined. Increases in tax rates, particularly capital income tax rates, and the expansion of unions, were most likely responsible. Unfortunately, these same factors pose a similar threat today.”

The OMB numbers suggest that spending actually DID decline in 1937 and 1938 (see here) and, contrary to the assertions of Cooley and Ohanian, that decline had a very deleterious impact on economic activity and employment.

Read the whole thing. Ironically, John Maynard Keynes warned of these consequences. In his 1938 private letter to FDR (PDF), Keynes stated:
(1) I should agree that the present recession is partly due to an ‘error of optimism’ which led to an overestimation of future demand, when orders were being placed in the first half of this year. If this were all, there would not be too much to worry about. It would only need time to effect a readjustment;—though, even so, the recovery would only be up to the point required to take care of the revised estimate of current demand, which might fall appreciably short of the prosperity reached last spring.

(2) But I am quite sure that this is not all. The recovery was mainly due to the following factors:—

(i) the solution of the credit and insolvency problems, and the establishment of easy short-term money;

(ii)the creation of an adequate system of relief for the unemployed;

(iii) the public works and other investments aided by Government funds or guarantees;

(iv) investment in the instrumental goods required to supply the increased demand for consumption goods;

(v) the momentum of the recovery thus initiated.

Now of these (i) was a prior condition of recovery, since it is no use creating a demand for credit, if there is no supply. But an increased supply will not of itself generate an adequate demand. The influence of (ii) evaporates as employment increases, so that there is a dead point beyond which this factor cannot carry the economic system. Recourse to (iii) has been greatly curtailed in the past year. (iv) and (v) are functions of the upward movement and cease—indeed (v) is reversed—as soon as the position fails to improve further. The benefit from the momentum of recovery as such is at the same time the most important and the most dangerous factor in the upward movement. It requires for its continuance, not merely the maintenance of recovery, but always further recovery. Thus it always flatters the early stages and steps from under just when support is most needed. It was largely, I think, a failure to allow for this which caused the ‘error of optimism’ last year.

Unless, therefore, the above factors were supplemented by others in due course, the present slump could have been predicted with absolute certainty. It is true that the existing policies will prevent the slump from proceeding to such a disastrous degree as last time. But they will not by themselves—at any rate, not without a large-scale recourse to (iii)—maintain prosperity at a reasonable level. [Emphasis supplied.]

In the current climate, with the threat of the austerity bomb, it is important to remember and reiterate the lessons of 1937. I certainly hope the president remembers. This is no time for the federal government to cut spending.

Originally posted to Daily Kos on Sat Nov 24, 2012 at 07:00 PM PST.

Also republished by History for Kossacks.

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Comment Preferences

  •  You want water? Prime the pump. Always. nt (13+ / 0-)

    Fuck Big Brother...from now on, WE'RE watching.

    by franklyn on Sat Nov 24, 2012 at 07:09:25 PM PST

    •  The sad truth however is that on the way (8+ / 0-)

      to doing anything good for this country you will run smack dab into the GOP, which is determined to oppose every rational move to improve the economy or living conditions for the 99%.  They are angling for a failure so catastrophic that the sheeple will put them back in charge of everything, so they can do what they always do--throw open the doors of the Treasury to the 1% and tell what's left of the rest of the country to go fuck themselves.

      I'm not sixty-two—I'm fifty-twelve!

      by Pragmatus on Sat Nov 24, 2012 at 08:50:31 PM PST

      [ Parent ]

      •  You nailed it, pragmatus. Doesn't anyone (0+ / 0-)

        ever learn what has already been taught us?  Haven't the years since Reagan been the proving ground for Republican policies, having proved that they don't work?

        I love sports. Whenever I can, I always watch the Detroit Tigers on the radio. -- Gerald R. Ford

        by mideedah on Sun Nov 25, 2012 at 05:31:05 PM PST

        [ Parent ]

  •  The wealthy do not want to be devalued and have... (13+ / 0-) compete with Uncle Sam and be shown as the shallow opportunists they are.

    We never run out of money.  The discussion is always one of how much money and what does it represent?

    Congress and that fiscal cap is trying to define this in zero sum terms so the wealthy are seen as the source of wealth needed, when the truth is labor is the source for new wealth.

    When we print money and put people to work on things of real value, that money is good and as good as the money the wealthy have.  The difference is they don't get a cut nor control and must then compete and the size of an investment like that makes them worth less too.

    Now they get it back as investments opportunities always crop up from FDR type actions, but that undermines their oligarchy, which is undesirable.

    Fuck them.  We need to build out a lot of new stuff and labor our way to prosperity and we the people can do that through the government, and should so they don't own and control it, meaning we get more benefit that way, literally worth more for having created which is something the wealthy do not do.

    ***Be Excellent To One Another***

    by potatohead on Sat Nov 24, 2012 at 07:11:36 PM PST

    •  Magic! Printing money doesn't devalue the (1+ / 0-)
      Recommended by:

      current money supply?  Wow!  Who knew?

      •  Keynesians, and other reality-based economists... (4+ / 0-)
        Recommended by:
        Timothy J, ER Doc, Alumbrados, potatohead

        who have been able to observe the performance of the economy without Austrian blinkers, have noticed that printing money during recessions, and during periods when the markets (stocks, housing) have been greatly devalued, does not result in devaluing the money supply.

        When you have a big hole, you can throw a whole lot of dirt into it without creating a mound.

        Art is the handmaid of human good.

        by joe from Lowell on Sun Nov 25, 2012 at 07:02:57 AM PST

        [ Parent ]

      •  That isn't what I said. (1+ / 0-)
        Recommended by:

        If we labor to make something of value and uncle sam pays for it, the money supply grows and the new value created backs the new money, same as value is backing the old money.

        We quite literally are worth more.

        When we print money without doing that, we dilute the money, and that's not a good thing.

        When we print money to pay for labor, and said labor creates wealth, we don't dilute the money.

        The difference is this:

        The wealthy have their share of existing money.  If we print a lot of money without adding value, the money gets diluted, reducing the worth of their share of the money, right along with everybody else.

        If we print money and add value the overall fraction of money grows, and THEIR SHARE of the wealth shrinks, while that of the laborers all increases.

        The wealthy don't want to talk about that second option, because it means they are not "the creators" and it reinforces where capital comes from; namely, labor, meaning the real wealth creators are US, not them.

        ***Be Excellent To One Another***

        by potatohead on Sun Nov 25, 2012 at 11:02:55 AM PST

        [ Parent ]

  •  Can't blame Morganthau, FDR decided the policy (3+ / 0-)
    Recommended by:
    mightymouse, RJDixon74135, eztempo

    not Morganthau.  No matter what Morganthau advocated, the policy decisions of the executive are ultimatly the responsibility of the President.  Presidents typically receive conflicting advice from advisors on difficult topics, but the President makes the decision for the executive.

     Congress has far more responsibility for making spending and tax decisions than the Treasury, as Congress's role is defined in the Constitution, the Treasury Sec is not.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Sat Nov 24, 2012 at 07:16:04 PM PST

  •  Gee, I sure hope you don't get HR'd... (10+ / 0-)

    like a diary did yesterday for daring to criticize the President for his seeming belief in the confidence fairy. This site has quite a few closet austerians, who when it comes right down to it will happily accept cuts in the safety net simply because Democratic pols tell them it's a good "compromise" for getting a few revenue crumbs.

    Just another faggity fag socialist fuckstick homosinner!

    by Ian S on Sat Nov 24, 2012 at 07:17:06 PM PST

  •  Why is Amity Shlaes Important? (4+ / 0-)

    Who did she fornicate with to become so prominent and to appear on IMPORTANT TALK SHOWS opposing Krugman?

    If this sounds sexist, too bad.  She doesn't deserve to be sharing airspace with Krugman or nearly anyone else.

    She's probably a lot smarter than David Gregory though.

  •  Main st. is lacking customers (6+ / 0-)

    and austerity isn't going to change that.

    Pump money into the economy and it flows through the system; generating customers, new orders, new hires and tax revenue. Cut that money off and Main st. cuts back hours or closes its doors for lack of business.

    "The human eye is a wonderful device. With a little effort, it can fail to see even the most glaring injustice." Richard K. Morgan

    by sceptical observer on Sat Nov 24, 2012 at 07:33:31 PM PST

  •  Refreshing (6+ / 0-)

    Thanks Armando.

  •  Thank you for this diary (11+ / 0-)

    We need to hear more common sense in the national conversation about economic policy.

    Please stand by. I'm looking for a new sig line.

    by Betty Pinson on Sat Nov 24, 2012 at 07:36:16 PM PST

  •  Saw a post today on Angry Bear (3+ / 0-)
    Recommended by:
    This old man, Timothy J, mideedah

    which claimed to demonstrate a positive correlation between an increase in marginal tax rates and an increase in GDP. Worth reading, especially for those who can read the math better than me.

    Give me your tired, your poor, Your huddled masses yearning to breathe free
    ¡Boycott Arizona!

    by litho on Sat Nov 24, 2012 at 07:37:13 PM PST

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

      As I understand it, the basis of Keynesian economics is that you borrow when you're in recession and pay back when you're in expansion. Put another way, you spend when you are in recession and save when you are in expansion. Or, from the point of view of taxes, you decrease the middle class tax base and increase the upper class tax base when you are in recession and vice versa when you are in expansion. Of course, this assumes the existence of an equitable tax policy in the first place - which we haven't had for decades. Thus, we have a ballooning national debt. So now we have the circumstance of Republicans hammering us over the head for an enormous national debt (which is indeed a bad thing in the long run) that their inequitable tax policy (and lack of fiscal conservatism) created in the first place!

  •  Fine. But we don't need the war spending. (5+ / 0-)

    There are plenty of hawks out there telling us that what we need is another war - with Syria, Libya, Iran, Mali - because wars increase spending and build empire.

    I think that's the wrong approach.

    I agree with the basic Obama premise which is that we spend less on nation building in Afghanistan and do some nation building right here at home.  Rural broadband, for example...

    Get in on The Action

    by Benintn on Sat Nov 24, 2012 at 07:38:21 PM PST

  •  As a policy... (3+ / 0-)
    Recommended by:
    RJDixon74135, Bon Temps, Timothy J

    it is no time to cut spending.  That is what we need to see in the FY 2014 budget.

    But as a matter of political strategy, a stalemate during the lame duck session that results in the automatic ending of the Bush tax cuts for everybody and and automatic sequester of roughly 8% of discretionary spending (which exempts Social Security, Medicare, medicaid, veterans benefits, and military pay) is preferable to some sort of hasty grand bargain that increases the Social Security retirement age and changes the cost-of-living-adjustment (COLA) for Social Security in the name of protecting the system.

    A Republican Appropriations Committee that has no choice but spend, and a Ways and Means Committee that has no choice but tax would be a great improvement over the obstruction we currently face.  The fallout from the 8% cuts likely will create some pushback on the Republicans in Congress.

    50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

    by TarheelDem on Sat Nov 24, 2012 at 07:40:30 PM PST

    •  Social Security should not be on the table. (3+ / 0-)
      Recommended by:
      stevenaxelrod, This old man, ER Doc


      “Social Security has nothing to do with balancing a budget or erasing or lowering the deficit.” -- Ronald Reagan, 1984 debate with Walter Mondale

      by RJDixon74135 on Sat Nov 24, 2012 at 09:26:27 PM PST

      [ Parent ]

      •  But it will be. TarheelDem is correct.. (1+ / 0-)
        Recommended by:
        Sacto Joe

        the best course for the country :

        But as a matter of political strategy, a stalemate during the lame duck session that results in the automatic ending of the Bush tax cuts for everybody and and automatic sequester of roughly 8% of discretionary spending (which exempts Social Security, Medicare, medicaid, veterans benefits, and military pay) is preferable to some sort of hasty grand bargain that increases the Social Security retirement age and changes the cost-of-living-adjustment (COLA) for Social Security in the name of protecting the system.
        But what is best for the country is not best for a vast number of working Americans who will see their take-home pay plummet.  In addition to modest tax increases, dependent deductions and child care credits go away.  The payroll tax holiday goes away, so each worker will see 2% less pay off the top.

        And those workers are going to say : "WTF?  Why is Social Security sacrosanct?  SS and Medicare are the most  major outlays!  We cannot even ask for them to be tweaked?"

        They will (rightly) ask the government why it is they who must take the hit and why it cannot be spread over all spending.  And, I wouldn't blame them.  Can you?

        So, even if this Congress doesn't reach an agreement, I believe the next one will.  And SS and Medicare have to be on the table.

        •  Why do "SS and Medicare have to be on the table" (0+ / 0-)

          As you say?  

          I call BS.

        •  And the answer to their "why?" is (0+ / 0-)

          Republican obstructionism. The nation needs to learn that obstructionism is a bad thing. far too many believe a "do-nothing Congress" is a good thing.

        •  Take-home pay plummets (0+ / 0-)

          Only if (1) consumer spending drops, (2) business investment drops, (3) government spending drops, or (4) the trade deficit worsens.

          Social Security is sacrosanct because it finances up to a third of the national debt.  Cutting Social Security benefits is stiffing a creditor.

          Workers are not going to attack Social Security and Medicare at all.  They know their value.  Your scenario is not likely.  Workers are already saying "Why is investment income taxed at a lower rate than income from labor?"  Where is the business investment that those incentives are supposed to bring?

          50 states, 210 media market, 435 Congressional Districts, 3080 counties, 192,480 precincts

          by TarheelDem on Tue Nov 27, 2012 at 01:55:33 PM PST

          [ Parent ]

  •  I noticed Amity Shlaes (3+ / 0-)
    Recommended by:
    Mark Sumner, This old man, Alumbrados

    has her book on the Depression embedded in "required summer reading" for the past few years. How does pure propaganda by a non-historian, non-economist get onto the required summer reading list? When I was in high school, learning about the Great Depression and the New Deal was critical to my ultimate decision to align to the political left. I can't begin to imagine what horror is being foisted on impressionable young minds here. We need some real history, such as David Kennedy's 'Freedom from Fear' so that at least the teens who can recognize an objective account of the 1930s will have something to turn to.

    "It is, it seems, politically impossible to organize expenditure on the scale necessary to prove my case -- except in war conditions."--JM Keynes, 1940

    by randomfacts on Sat Nov 24, 2012 at 07:42:04 PM PST

  •  Unlike Ian S upthread, I don't read your (3+ / 0-)
    Recommended by:
    wonmug, Bon Temps, Timothy J

    diary here as "criticism" of the president. On the contrary, it speaks to me of a misplaced optimism that he might be yet persuadable on the issue of cuts versus spending infusion. (YMMV, I guess.)

    I certainly hope the president remembers. This is no time for the federal government to cut spending.
    We can hope all we want, but this cake is already baked, as surely as the planet is baking from global warming.

    I have seen NO evidence the president is even entertaining the idea of modifying his obsession with cutting $4 trillion from the debt over the next 10 years. $4 trillion - not through growing the economy and thus generating more tax revenue, but through "shared sacrifice" - cutting into veterans programs, food stamps, investments in well care, etc.

    Wholesale rejection of Keynesian economics in favor of feeding the austerity monster is no less destructive of our national well being than continuing to promote a "balanced energy" strategy in the face of a world wide scientific consensus that we MUST drastically reduce our CO2 output NOW to ameliorate the ongoing and worsening climate crisis.

    Yeah, a President Romney would have been a lot worse, but the very idea that President Obama may be persuaded at this point to abandon his wrong headed determination to slash the debt in the midst of an anemic recovery is laughable. He has a four year track record by which to judge his intentions.

    The battle for sane, necessary reforms will ultimately be fought at the local and state level (as well as on the streets). Don't imagine for one second Obama is an ally in that fight.

    "And this is definitely no time to negotiate a “grand bargain” on the budget that snatches defeat from the jaws of victory." - Krugman

    by WisePiper on Sat Nov 24, 2012 at 07:44:45 PM PST

    •  That's a vast over-simplification, WisePiper. (0+ / 0-)

      The existence of a ballooning deficit, and the potential evil it represents, shouldn't be in question. Nor should the absolute unavoidability of compromise. It is the existence of a Republican lock on the House for two more years, made possible by the gerrymandering of two years back, itself made possible in part by the unwillingness of the liberal elite to expend an effort in 2010 to fight for Democrats (because, ironically, of whining over the compromises necessary to effect change), that has made today's compromises necessary.

      But lo! A solution is at hand! By the simple expedient of doing nothing, a huge blow will be struck against the basic tax inequity that is behind much of that deficit. Sadly, it will also increase the tax burden on those who can least bear it at the same time. And yet, when that happens, for the first time in decades there will arise a move to redress that wrong, and the Party that stands in favor of a move back towards true tax equity will benefit the most from that movement.

  •  Keynes' letter--very cool! (6+ / 0-)

    It is amazing that he figured out the issue of aggregate demand.  We have the Great Depression as a historical lesson.  And also Reagan's deficit spending, and the Bill Clinton tax raises, to show us the way.  Keynes had no such precedents to work from....

  •  Brief summary would help propel the (8+ / 0-)

    key point.

    Here's what I say whenever Conservatives say that it took a war to get us out of The Great Depression: "No, it took the central government's planning and SPENDING to do it. It didn't have to be a war. In fact, in Great Britain after the war they kept up the momentum by building hospitals and a national health service."

  •  Oh, for christ's sake, spell his name (0+ / 0-)

    right.  That would be Morgenthau.  As in "morning" in German and probably Yiddish.  

    No problem with your history, but this kind of silly mistake sure does undercut your message.  (Note that Wikipedia, to which you link. spell it correctly.)

  •  Morgenthau had too many successes to be (2+ / 0-)
    Recommended by:
    Rich in PA, joe from Lowell

    described as one of the worst Treasury secretaries ever.  He erred on the deficit issue, to be sure, but he contributed enormously to the New Deal in other areas (particularly Social Security), and he oversaw the entire financing of the American war effort.

  •  Pssst, they WANT a depression. (0+ / 0-)

    Depressions are harvest seasons for the super-rich. A (select) few of the super-rich made a lot of money off of the Great Depression, buy buying distressed assets for pennies on the dollar, then waiting for (or helping) the economy recover so they can sell those assets (or profit by owning them) and make HUGE profits.
    If we would have just let the markets crash in 2008 (so the super-rich could come in and scoop up enough cheap shit), there would now be incentive for the super-rich to allow for some real government-sponsored economic recovery (so they could start raking in profits from their cheap acquisitions). As it is now, they're still trying to wipe out a few more middle-income jabronies (which is what should have already happened instead of bailing out a deregulated/crooked financial sector to prop up unwise 401k investments). When the economy is torn down far enough, the super-rich will then allow for some government-sponsored economic recovery (but not before, because they control (i.e. lobby) the government and they want to get the most bang for their depression investments/bucks).

  •  FDR attacked Hoover for running deficits in 1932 (2+ / 0-)
    Recommended by:
    This old man, joe from Lowell

    FDR's great virtue was that he wanted to help people and
    would overrule economists when those goals conflicted.
    I doubt any economist really understands how the whole economy works, though I love Krugman(Sec. of Treasury?). Right now we have a really complicated global economy and we probably need a new Brenton Woods agreement at least in the OECD. I think the government should concentrate on helping ordinary people and reducing income inequality. It seems that the economy is suffering from a rentier mentality among the rich even after Bernanke's super-low interest rates.
    OTH, Obama doesn't have Congress the way FDR did so I expect dangerous compromises. The only leaverage he has is these Bush tax cuts and then it's back to same old shit.

    •  Bretton Woods (1+ / 0-)
      Recommended by:
      joe from Lowell

      And back then I imagine that ideas about fiscal policy that we take for granted today (in the reality-based world) were so new that people had a hard time believing them since they sounded counterintuitive. Hell, it took us over 100 years to fully embrace Hamilton's ideas about monetary policy. I bought into pre-Keynsian ideas about fiscal policy not that long ago, and it's going to take people a while to get up to speed, especially given all the propaganda being spouted.

      "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

      by kovie on Sat Nov 24, 2012 at 09:05:46 PM PST

      [ Parent ]

  •  Amity Shlaes is a crazy woman and a hack (6+ / 0-)

    She has no degrees, training or professional experience in economics. She was told to write a compelling book about how FDR caused the Great Depression and the New Deal failed, given the outline of how to write it with all the convincing-sounding arguments and evidence, and provided with good editors and perhaps even ghostwriters. Her background is in literature, which is probably why she was picked to write her book because she can probably write well. You only need to listen to her speak for a few minutes to realize that she's not dealing from a full deck and doesn't know what the hell she's talking about.

    Obama needs to educate the public on how fiscal policy works, why deficits don't matter as much and in the way we've been told they do, and why right now we need to spend, not cut. He needs to be like FDR here, the educator in chief. It will help him do his job and make it hard for the GOP to derail it.

    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Sat Nov 24, 2012 at 09:02:28 PM PST

    •  Educating the public on how fiscal policy works (2+ / 0-)
      Recommended by:
      wonmug, This old man

      would be lovely, but I suspect there isn't enough time. I'd settle for a Lyndon Johnson. Okay, he wasn't an orator, he wasn't a consensus builder and he screwed up on Vietnam, but under his Great Society and War on Poverty programs, the poverty level dropped from 23% to 12%. He was able to get Medicare, Medicaid, Head Start, and food stamps through Congress as well as establishing the National Endowment for Humanities and the National Endowment for the Arts and the Public Broadcasting Act. Not too shabby.

      “Social Security has nothing to do with balancing a budget or erasing or lowering the deficit.” -- Ronald Reagan, 1984 debate with Walter Mondale

      by RJDixon74135 on Sat Nov 24, 2012 at 09:50:27 PM PST

      [ Parent ]

      •  There's always time (1+ / 0-)
        Recommended by:
        kj in missouri

        That Obama & Dems won in this election despite the economy being against them in many ways showed, I believe, that Americans are beginning to reject RW ideas for the nonsensical lies that they are, and returning to a more progressive view of economic policy, i.e. balance, fairness, regulation, taxation, shared prosperity and growth. The ground is fertile for further winning them over to liberal fiscal policy and we absolutely have to take advantage of it. The public wants spending.

        "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

        by kovie on Sun Nov 25, 2012 at 10:03:41 AM PST

        [ Parent ]

  •  I look forward to the revelation (1+ / 0-)
    Recommended by:
    Timothy J

    of everyone's concrete plans to "hold his feet to the fire" now that he's a lame duck. I suspect it will consist mostly of online petitions, emails, phone calls and a few letters. Lots of luck with that!

    “The probability that we may fail in the struggle ought not to deter us from the support of a cause we believe to be just.” – Abraham Lincoln

    by Sagebrush Bob on Sun Nov 25, 2012 at 02:35:30 AM PST

  •  Yeah. Cuz in 2012, unions are taking over. (2+ / 0-)
    Recommended by:
    joe from Lowell, Timothy J

    Good God, what asshats.

    Unions are on life support everywhere, and these booger eating morons assert that "unions" are why we can't have nice things.

    Why are they even permitted a pencil, let alone access to pundit powers?

  •  Full employment and forced savings (0+ / 0-)

    ultimately brought the Great Depression to an end.

    As others have noted, it doesn't have to take war spending to do that; rebuilding civil infrastructure would have the same (or better) economic effects if everyone who could work had gainful employment first and foremost and there were a way to ensure substantially increased savings rates. Any sorts of worthwhile projects that lead to full employment and enhanced savings rates will have beneficial economic effects for the many.

    Unfortunately, that doesn't seem to be the economic goal of the ruling classes, does it?

    Blogging as Ché Pasa since 2007.

    by felix19 on Sun Nov 25, 2012 at 05:23:13 AM PST

  •  Amity Shaes's interpretation of 1937.... (1+ / 0-)
    Recommended by:
    Timothy J priceless. I think we should apply that analysis to other historical situations.  

    You know, I sometimes think if I could see, I'd be kicking a lot of ass. -Stevie Wonder at the Glastonbury Festival, 2010

    by Rich in PA on Sun Nov 25, 2012 at 06:07:28 AM PST

  •  Let's Make This Much More Practical: (0+ / 0-)

    I get it, you get it-- but many people don't give a crap about history, particularly in regard to MONEY.. how to spend it, and how much to spend.

    Here's what we know NOW, today: the American Society of Civil Engineers (you know, the people who design and build roads, bridges, sewage treatment plants, etc) regularly grade the condition of our nation's infrastruture.

    On a scale of A to F, with F being FAIL, we are at D.


    Further, we know for every $1 BIL spent on infrastructure, around 50,000 jobs are created; good paying- good benefit jobs for architects, engineers, construction workers, truck drivers, etc. there's the related jobs for the vendors making/supplying the materials needed for construction/infrastructure projects.

    and finally, consider this fact with the fact congress has recently spent what? over $2 Trilliion dollars on two wars of choice: wars which resulted in zero ROI for we the taxpayers.

    the fact numerous "democrats" in congress are on board with austerity as some sort of answer is appalling and proof of their utter ignorance.

    I don't need to reach back to FDR to know and understand this.

    "A civilization which does not provide young people with a way to earn a living is pretty poor". Eleanor Roosevelt

    by Superpole on Sun Nov 25, 2012 at 07:24:42 AM PST

  •  Why is it Republicans only believe that (0+ / 0-)

    government spending boosts the economy if it's spending on things that blow up?

    Borrow money at zero interest to build things that actually last, and improve our lives, like, you know, bridges and things: horrors!

    What is valued is practiced. What is not valued is not practiced. -- Plato

    by RobLewis on Sun Nov 25, 2012 at 11:05:05 AM PST

  •  Federal Spending (1+ / 0-)
    Recommended by:

    I have always found it odd that the political right, particularly the fiscal conservatives, always insist that federal spending cannot end an economic down turn, and point to the 1937-38 recession as evidence thereof.  Many of these same conservatives then point out, quite rightly, that is was the spending for the Second World War that finally ended the Great Depression.  And the nature of that spending was?  Massive properly strucutured deficit federal spending of a scale that dwarfed New Deal expenditures.  Keynesian formular writ large.

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