Did FDR Prolong The Depression?

I guess we all know economist don't agree on what exactly caused the Great Depression or causes depressions in general. As far as The Great Depression and America, economist Gene Smiley gives his take on FDR's New Deal policies and the effects he says they had on the economy during the Great Depression.



" Smiley persuasively shows with a thorough and detailed analysis of the facts that, contrary to many popular impressions, Roosevelt’s New Deal did not end the Great Depression. Instead, it prolonged the imbalances and distortions and indeed in many cases made them worse. Modeled along the lines of Mussolini’s fascist economic system in Italy, the National Recovery Administration (NRA) imposed industrial cartels over virtually every sector of the American economy.

At the same time, the Agricultural Adjustment Act (AAA) controlled the prices and production of American farming. The monetary system was thrown into confusion and instability with the abandonment of the gold standard. Taxes were raised even more, budget deficits added to the pressure on the banking industry, and giant public works projects were directly undertaken by the federal government. Rather than stability and recovery, these programs generated only uncertainty and economic stagnation.

Economic improvement began only after the U.S. Supreme Court declared most of the New Deal systems of planning and controls to be unconstitutional in 1935 and 1936. To the extent that the private sector was freed from the heavy hand of direct government supervision, industries slowly began to adjust and expand output and add to their labor forces. But Smiley explains that Roosevelt undermined this recovery in 1936 and 1937. Angry that the Supreme Court had thrown out most of the central features of his New Deal, he went on an anti-business crusade that weakened business confidence in the political and economic future."

http://www.fff.org/freedom/fd0212g.asp

 

IMHO, what really put an end to the great depression was an end to the devastating drought that put millions of farmers out of business(the infamous dust bowl) the end of the drought once again allowed the agriculture of America to thrive. FDR didn't have much to do with that. Basically, through the entire history of the nation up to the dust bowl our economy has been a mostly agriculture based economy. There was a lot of industry in the 19th century around new england and the great lakes, but by and large the country was driven by agriculture. After the dust bowl the farmers returned to their fields and agriculture once again became a huge part of the american market, but in the meantime many industrial enterprises had been started, which led to the huge boon in technology and industry immediately following the depression and which has continued to this day.

 

I dunno, it could well be argued that the laissez faire approach to regulating the banking industry kind of kicked off the whole thing.
Also, Hoover's lack of action because of his rabid hatred of government in business argueably made the whole situation a hell of a lot worse.
FDR tried to jump start the economy in the midst of a worldwide depression, and was able to get things back to normal before wwII, despite what some conservative detractors might say...

 

It's not like the world suddenly found itself in WWII...countries had been gearing up for war years before it actually began. The countries that started preparing for war the soonest got out of the Depression the soonest.

The end of the Depression was brought on by the end of the dust bowl (as someone already mentioned) and by the preparation for WWII. Not by Roosevelt's economic policies.

 

As far as WW2 ending the Depression.

The author of the above book questions how much it contributed to the ending of the Depression mainly because the increase in production and manufacturing that happen during WW2 didn't improve the economy too much because it mostly involved the production of war related materials and not consumer-desired goods and services.

 

Well, the production of war related goods and services does indeed improve the economy because those goods and services are still paid for and the production of said goods and services requires workers and thus creates more employment opportunities and puts that money back into society.

 

Izzat a fact? So how come Bush's fascism isn't doing anything positive for the job situation?

The fact of the matter is that the protections FDR put in place were sabotaged by Reagan, setting the stage for abuses like Enron. Repuglycans have never done anything good for the economy, except where the rich bitches are concerned.

 

Becuase the boom of the 1920's had nothing to do with the republican administrations did it? ignorant fucker stop making up words and read a history book.

 

Economic depressions and booms are simply created by the banking institutions at will, by controlling the amount of money and credit in circulation. The depression of the 1930's was deliberate, as will the next one, which I believe isn't that far down the road. And it will likely make the 1930's depression look like a walk through the park.

 

Oh for God's sake, no single person, corporation, or industry can deliberately control the daily or annual fluctuations of the market. They can only set policies that pursue economic goals (which often do not work the way people intend them to). The economy is simply too complicated of a beast to fit into your simplistic "the illuminati did it" theories.

 

Because the United States isn't producing THAT many more weapons now than it did prior to Bush taking office. And because the economy is much more diverse today than it was during WWII, so the military manufacturing industry can't singlehandedly (or even in a significant way) pull the economy up.

Translation: "I'm too lazy to actually think about economics, so instead I'll just make some partisan insults and hope other mindless partisans come to my defense."

 

No, but a handful of the most powerful international bankers can.

Like I said, a depression is little more than a matter of how much money is put into circulation by the banks.

The economy is indeed complicated, but until you truly understand the banking system, how it really works and who controls it, you're never going to see the big picture.

Paper money has no value whatsoever. It is fiat money. It hasn't been backed by gold since the early 1970's. All money is today is numbers fed into a database. When the experts say we are living in an economic paradigm, they're not joking.

The reality is, at absolute very top, everything is controlled by a very few number of unbelievably wealthy and powerful people. Whether you choose to believe that or not is up to you.

 

Yeah, money is just numbers with no real meaning, it sort of doesn't exist.. Those at the very top are beyond money.. The rest of us are stuck with it... Money does not equal wealth..

 

Please get yourself a copy of Galapagos by Kurt Vonnegut Jr. Based on what you just wrote, you'll probably really enjoy it. It's great satire, based largely on your thesis statement above.



And about FDR. That piece of garbage took a huge shit on the Constitution, and gave his okay to putting thousands of innocent AMERICAN CITIZENS, who happened to be of Japanese heritage, in CAMPS -- FUCKIN' CAMPS -- right here in the U.S.A. What happened to their Constitutional rights, their right to due process, to be charged and tried if they were supposed to have done something illegal. What happened to all of that, Mr. President? You just didn't give a fuck, did you. You just didn't give a fuck that people lost their homes, businesses, lives... You are quite lucky that you didn't have an uprising of the people, and an overthrow of the government, because that kind of shit isn't supposed to fly in America. It's what we have a Constitution for. Lucky for you, your ploy of using them as a scapegoat worked. If they had been a slightly more sympathetic group, you may have had a bloodbath.

I hope you're rotting in hell in your fuckin' wheelchair, you fascist shitwad. Too bad you were allowed to die a natural death. Someone shoulda fuckin' shot you, maybe someone you had thrown into an internment camp for two or three years against every one of their Constitutional rights.

-Jeffrey

 

This is exactly what most people are too stupid to understand, Kandahar. They WANT a SCAPEGOAT for things that they're unhappy with. "I lost my job, and it must be because Bush has fucked the economy." They want a reason that's simple enough for them to understand, and which can focus their anger. That's all. Of course no one person or group controls the entire economy. It's like saying that one single tugboat is what steers a giant aircraft carrier. No, it may nudge it in a certain direction, but 8 other boats are also pushing in different directions, too, and the carrier ends up going in a final vector based on all of those tugs.

-Jeffrey

 

Without FDR the Great Depression would have ended sooner and if someone had bought Hitler’s painting there would have been no WWII.
It’s strange at one time I remember people on the right defending FDR against left-wingers who thought that FDR’s policies had saved the US wealthy elite from a much deserved popular revolution. Just showing my age I guess.

Gene Smiley’s book like most revisionist work of history tells us a lot about now and what theories are in favour as it does enlighten the past. As far as I can tell GS is a protege of the free-market-oriented Austrian and Chicago schools of economics. Presumably he therefore the US would have been better served by those types of economic practice.


Well here is a view of what happened when those types of theories were put into practice -
Many people have often wondered what it would be like to create a nation based solely on their political and economic beliefs. Imagine: no opposition, no political rivals, no compromise of morals. Only a "benevolent dictator," if you will, setting up society according to your ideals.

The Chicago School of Economics got that chance for 16 years in Chile, under near-laboratory conditions. Between 1973 and 1989, a government team of economists trained at the University of Chicago dismantled or decentralized the Chilean state as far as was humanly possible. Their program included privatizing welfare and social programs, deregulating the market, liberalizing trade, rolling back trade unions, and rewriting its constitution and laws. And they did all this in the absence of the far-right's most hated institution: democracy.

The results were exactly what liberals predicted. Chile's economy became more unstable than any other in Latin America, alternately experiencing deep plunges and soaring growth. Once all this erratic behavior was averaged out, however, Chile's growth during this 16-year period was one of the slowest of any Latin American country. Worse, income inequality grew severe. The majority of workers actually earned less in 1989 than in 1973 (after adjusting for inflation), while the incomes of the rich skyrocketed. In the absence of market regulations, Chile also became one of the most polluted countries in Latin America. And Chile's lack of democracy was only possible by suppressing political opposition and labor unions under a reign of terror and widespread human rights abuses.

Conservatives have developed an apologist literature defending Chile as a huge success story. In 1982, Milton Friedman enthusiastically praised General Pinochet (the Chilean dictator) because he "has supported a fully free-market economy as a matter of principle. Chile is an economic miracle." (1) However, the statistics below show this to be untrue. Chile is a tragic failure of right-wing economics, and its people are still paying the price for it today.


For more - http://www.huppi.com/kangaroo/L-chichile.htm

 

As far as Chile and the effects of free markets. Here's the most recent info I could find on this:


" New buildings, new cars and new shopping centers provide ample evidence that, for the wealthy at least, Chile's new economic system is a resounding success. There's also evidence of a new middle class. Central planning and government-owned industries are out. Instead, it's privatization that's brought prosperity, and, as a result, virtually every developing country in the world, except North Korea and Cuba, has adopted at least some variation of Chile's free market economic model.

Has Chile found the answer?

Last month, the leaders of all 34 Western Hemisphere nations, except Cuba, met in Santiago to pay tribute to the Chilean model and to reaffirm their commitment to free trade and free markets throughout the hemisphere."

http://www.pbs.org/newshour/bb/latin_america/jan-june98/chile_5-26.html

As for Chile's pollution,according to this link it has much to do with Chile being located in an mountian area. The mountains trap in much of the pollution.

http://www.eia.doe.gov/emeu/cabs/chilenv.html

 

As far as Chile and the effects of free markets. Here's the most recent info I could find on this:

"Chile Prospers via a Balanced Market Economy; Snubs "Free Market" Pedagogy
While many Latin American countries have whittled government's role in business affairs, Chile has gone largely in the other direction. Not only has it wielded influence in getting to market its key exports, from table grapes to goat cheese to sofas, but it also has used more legislation, regulation and taxes to tame a feral free-market system that failed to deliver in the 1970s and '80s.
Argentina and Brazil loosened restrictions on foreign cash flowing in and out of their countries, but Chile slapped restrictions on it. While countries such as Bolivia and Uruguay put the brakes on public spending in the 1990s, the Chileans have more than doubled public expenditures on health and education since 1990.
Other countries cut taxes; Chile nearly doubled the taxes on corporations over the past decade. While Argentina in the 1990s was watering down its labor laws to lower costs and make it easier for employers to hire and fire workers, Chile was strengthening its labor legislation, doubling its minimum wage and requiring that employers extend jobless benefits to unemployed workers.
Brazil and Argentina fixed the value of their currencies -- guaranteeing that the central bank would exchange local tender for dollars at a fixed rate -- to combat inflation. By contrast, Chile devalued its currency and kept it on a tight leash to protect local industries from foreign goods that gained a price advantage against an overvalued local currency.
Nearly half of all Brazilian workers do not have a job contract; for Chile the figure is 1 in 5. The number of Argentines living in poverty has quadrupled since 1989; over that same period, Chile has reduced the ranks of its poor by half."
http://reclaimdemocracy.org/articles_2004/chile_prospers.html

 

It goes way beyond Bush, who is just a puppet. It isn't about a scapegoat, it's about knowing the facts. Don't criticise what you cannot understand, or haven't taken the time to even think about or research on your own. Some people in these forums think they have the answer to everything, when they're nothing but talk. Then they are quick to criticise anyone who presents anything contrary to what they've been taught via the media or in school.

The compare an aircraft carrier to the banking system is kinda... well, stupid.

If anyone likes to use scapegoats, it's the US government. This is probably why they haven't yet caught (or announced that he's dead) the evil bin Laden, who "orchestrated the events of 9/11 from a cave."

 

Translation: "I'm too stupid to see cause and effect, and since I believe all that Milton Friedman bullshit, I'll pretend that I'm an economist."