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  • Here comes 1933

    Posted by Michael Kennedy on November 23rd, 2013 (All posts by )

    images

    The Depression did not really get going until the Roosevelt Administration got its anti-business agenda enacted after 1932. The 1929 crash was a single event, much like the 2008 panic. It took major errors in economic policy to make matters worse. Some were made by Hoover, who was a “progressive” but they continued under Roosevelt.

    James Taranto has a good take and quotes a couple of lefty commentators. Like Ezra Klein.

    There’s a lot of upside for Republicans in how this went down. It came at a time when Republicans control the House and are likely to do so for the duration of President Obama’s second term, so the weakening of the filibuster will have no effect on the legislation Democrats can pass. The electoral map, the demographics of midterm elections, and the political problems bedeviling Democrats make it very likely that Mitch McConnell will be majority leader come 2015 and then he will be able to take advantage of a weakened filibuster. And, finally, if and when Republicans recapture the White House and decide to do away with the filibuster altogether, Democrats won’t have much of an argument when they try to stop them.

    As Taranto puts it:

    “”The political problems bedeviling Democrats” is a marvelous bit of understatement. The abject failure of ObamaCare has made the prospect of a Republican Senate in 2015 and a Republican president in 2017 much likelier. Thus even from a purely partisan standpoint, rational Democrats would have been more cautious about invoking the nuclear option when they did than at just about any other time in the past five years.”

    The filibuster maneuver by Reid is not a demonstration of strength. It is an admission of weakness. The idiots at HuffPo and the LA Times are beating their chests in joy at the prospect of eternal Democrat majorities that can ignore those pesky Republicans.

    In fact, what Reid is acknowledging is that the Democrat majority in the Senate is going away and now is the time to pack the courts and regulatory agencies with ideologues and get all the anti-business regulations in place while they can. The hard left, which believes in magic and Cargo Cults, is cheering them on.

    Bloomberg sees what happened, too.

    “Under any administration, federal agencies seek to implement the president’s policies by developing regulations,” Jeff Holmstead, a lawyer at Bracewell & Giuliani LLP in Washington who has represented coal-heavy utilities, said. “But in most cases, the judges on the D.C. Circuit are the people who decide whether those regulations comply with federal law.”

    I fully expect to see anti-fracking regulations roll out soon, once the Obama appointments get confirmed by the rump Senate. However, what goes around, comes around.

    It is our understanding that the Supreme Court exception was included to satisfy pro-abortion extremists, the most active and basest part of the activist base. The Wall Street Journal’s Laura Meckler reported yesterday that the two biggest such groups, Planned Parenthood Federation of America and NARAL Pro-Choice America, both declined comment on the nuclear move, “leaving it unclear whether they are concerned about their ability to block future objectionable”–i.e., Republican–”nominees.”

    The abortion lobby sees the future better than giddy leftists who think government creates wealth and jobs.

     

    26 Responses to “Here comes 1933”

    1. Subotai Bahadur Says:

      We will see what the Institutional Republicans do. I suspect that they will accept it meekly and submit. And if there are honest elections in 2014 and they take the Senate, I expect they will immediately reinstate the filibuster for the benefit of the Democrats.

      Megan McArdle [who is an Obama partisan] at Bloomberg casts the end of the filibuster as a sign that the Democrats know that they are going to lose in 2014, and are trying to force through everything in the way of judges and regulations that they can before then. It could also be read that they know that they have no chance of losing [either no elections or rigged elections] and this is part of the conversion to one party rule.

      If the Republicans submit, it reinforces the case against McArdle’s postulate.

      By the way, this is yet another example of why the word of any Democrat is worthless. Reid flat promised in July that he would never do this.

      Subotai Bahadur

    2. Tano Says:

      “The Depression did not really get going until the Roosevelt Administration…”

      Wow. Just Wow.

      Shall we go to the videotape?

      Nominal GDP (millions)

      1929 – 104,600
      1930 – 92,000 (-11.5%)
      1931 – 77,400 (-15.9%)
      1932 – 59,500 (-23.1%)
      1933 – 57,200 (-3.8%) – FDR takes over March 4
      1934 – 66,800 (+16.8%)
      1935 – 74,300 (+11.2%)
      1936 – 84,900 (+14.3%)
      1937 – 93,000 (+9.5%)

      The logic you endorse is about as good as your grasp of the facts..

      “In fact, what Reid is acknowledging is that the Democrat majority in the Senate is going away..”

      This is an explanation for why Reid has permanently weakened the rights of Senate minorities????

    3. MikeK Says:

      Tano, read The ForgottenMan and get back to me. Or, you could read that report if long explanations tax your brain.

      Thanks for the troll-like comments. It explains where you came from.

    4. Lexington Green Says:

      We were deeply into the Depression by the time FDR ran. That is why he won in an blowout. Hoover was repudiated because he had failed to make any headway in ending the Depression. Conrad Black’s biography of FDR is very good on this.

    5. MikeK Says:

      So, 1933 to 1940 was the recovery ? I disagree.

    6. Lexington Green Says:

      “So, 1933 to 1940 was the recovery ? ”

      What?

      You said this:

      “The Depression did not really get going until the Roosevelt Administration got its anti-business agenda enacted after 1932.”

      This is absolutely wrong.

      The country was in a severe Depression at the time of the 1932 election.

      That has nothing to do with when any recovery occurred.

      As it happens, there was a moderate recovery prior to the 1936 election, but a further plunge in 1937.

      The recovery started in 1940 with large military orders from France and Britain.

    7. MikeK Says:

      “The recovery started in 1940 with large military orders from France and Britain.”

      Well, I guess we agree on that. Taking 14 million men into the military helped.

      We disagree on when the “depression” really got going. The Obama great recession was begun by Bush, I guess, in your opinion. We have had severe panics for hundreds of years. Until 1933, they didn’t last as long as the one in the 1930s.

      The Panic of 1893 was described thus: “The Panic of ’93 was the worst economic depression the United States had ever experienced at the time.”

      It lasted four years. “The U.S. economy began to recover in 1897. After the election of Republican McKinley, confidence was restored with the Klondike Gold Rush and the economy began 10 years of rapid growth, until the Panic of 1907.”

      The Panic of 1907 was due to the San Francisco Earthquake and the insurance losses. Contributing were attempts to corner the market in copper and another collapse of a leveraged railroad. It was over in a month. There’s a good book about that crisis. The Panic of 1907. Sorry, Lex, I don’t buy it much as I like Conrad Black’s book.

      I still say 1929 was a panic, not a depression. Harding and Coolidge showed what could be done with a severe recession once correct economic policies were introduced. The depression of 1921 was over in 1922.

    8. Lexington Green Says:

      What happened under Hoover is universally and correctly called a Depression, in fact, the Great Depression. In fact, Hoover himself called it that in his own Memoirs. The volume entitled The Great Depression covers 1929-1941. Of course, he absolves himself from all blame.

      The Online Library of Liberty, which is very good and of unimpeachable classical liberal orientation, in article on the Great Depression says the worldwide depression began in 1928 and the Great Depression began in the USA “in the middle of 1929.”

      Unemployment peaked at the end of Hoover’s term.

      GDP bottomed out during Hoover’s term.

      You are using the universally understood and established term “Great Depression” in an idiosyncratic and incorrect way.

    9. MikeK Says:

      I turn over my king sir.

    10. Tano Says:

      “So, 1933 to 1940 was the recovery ? I disagree.”

      Hmm. 4 years of double-digit growth, after the most devastating downturn in our nation’s history is evidence of…..

      no recovery???
      the problem getting worse???

      LexingtonGreen seems a bit more capable of admitting the obvious, but still….

      “As it happens, there was a moderate recovery prior to the 1936 election, but a further plunge in 1937.”

      There were 4 years of double-digit growth prior to the 1936 election (see handy table in my earlier comment). Under what kind of a standard would that be considered “moderate” growth?

      Yes, there was a downturn in 1937, when FDR made the grave mistake of listening to the deficit hawks of his day, and tried a dose of fiscal austerity.

      Shall I continue my table?

      1938 – 87,400 (-6.02%)
      1939 – 93,400 (+7.0%)
      1940 – 102,900 (+10.2%)
      1941 – 129,400 (+25.7%)
      1942 – 166,000 (+28.3%)

      So, a short downturn as a result of austerity policies, but a quick return to robust growth. It did take till 1940 to get back to the pre-crash size of the economy, but surely you wouldn’t claim that there was no recovery until then? Recovery means to turn in a positive direction and that started pretty much the day FDR took over, and continued in a robust manner, with one short hitch, till the war.

      Mike again….
      “The Obama great recession was begun by Bush, I guess, in your opinion.”

      Do you believe that there are no such things as facts in this world? That everything is merely a matter of opinion, and ones value as a thinking person is merely a reflection of the rightness of one’s opinions – according to some ideological standard?

      How hard is this Mike? Spend 10 seconds on google and find a chart of the performance of our economy over the past decade. That well-defined nadir? – that is inauguration day 2009.

    11. MikeK Says:

      “How hard is this Mike? Spend 10 seconds on google and find a chart of the performance of our economy over the past decade. That well-defined nadir? – that is inauguration day 2009.”

      I bow to the Obama supporters. May their depression be short and sweet. I may be in the wrong place. Sorry.

    12. Lexington Green Says:

      I am not an Obama supporter.

      We just need to get our history straight, Mike. If I blow it on the facts, nail me!

    13. Richard Cranium Says:

      More video tape:

      Federal Spending ($ Billion Nominal)

      1929 – 3.81
      1930 – 3.96
      1931 – 4.11
      1932 – 4.27
      1933 – 5.10 – FDR takes over March 4
      1934 – 5.94
      1935 – 7.55
      1936 – 9.17
      1937 – 8.81
      1938 – 8.45
      1939 – 9.26
      1940 – 10.06

      The numbers there give a different story than what Tano would have you believe. Don’t forget that we left the gold standard somewhere in there.

      Source http://www.usgovernmentspending.com/

    14. MikeK Says:

      “We just need to get our history straight, Mike. If I blow it on the facts, nail me!”

      In an article in the August issue of the Journal of Political Economy, Ohanian and Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law June 16, 1933.

      “President Roosevelt believed that excessive competition was responsible for the Depression by reducing prices and wages, and by extension reducing employment and demand for goods and services,” said Cole, also a UCLA professor of economics. “So he came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies.”,

      Using data collected in 1929 by the Conference Board and the Bureau of Labor Statistics, Cole and Ohanian were able to establish average wages and prices across a range of industries just prior to the Depression. By adjusting for annual increases in productivity, they were able to use the 1929 benchmark to figure out what prices and wages would have been during every year of the Depression had Roosevelt’s policies not gone into effect. They then compared those figures with actual prices and wages as reflected in the Conference Board data.

      From the link I provided. I guess that doesn’t count as “facts.” Sorry. In my ignorance, I thought that was a fair analysis of Roosevelt’s policies. He set the gold price by choosing his lucky number.

      He was a great war president but his economics were awful. Of course, I have only those sources to rely on and they are not acceptable as “facts”, I guess.

    15. Lexington Green Says:

      “The Depression did not really get going until the Roosevelt Administration got its anti-business agenda enacted after 1932.”

      This statement is the problem.

      FDR, awful or not, presided over an improving economy compared to Hoover. Whether in a counter-factual world the recovery could have been faster is unknowable.

    16. MikeK Says:

      I accidentally stumbled into Huff Po, I guess.

      Feel free to delete my post.

      That’s what happens to my comments at HuffPo.

      “presided over an improving economy compared to Hoover”

      And so will Obama if he lasts long enough. More than four years, I mean.

    17. Tano Says:

      “The numbers there give a different story than what Tano would have you believe”

      I have no idea what your point is.
      The only thing that your numbers seem to demonstrate is that I was correct to identify the mini-recession in 37-38 and link it with the decrease in federal spending that was the really false move that FDR made.

    18. Tano Says:

      “The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies.”,”

      Hello Michael. Did you not read the comment in which I gave you the GDP numbers for the FDR administration????

      If you doubt them, you can just use the google and see for yourself.

      So if you do not, or cannot dispute my figures, then how is it that you can post, with approval, this claim that a “beautiful recovery” was thwarted by FDR’s policies, when, in fact, the economy grew by 17, 11, 14, 10 percent in the first four years under his policies???

      What is your conception of a “beautiful recovery”?

      And is the standard that you use to judge the work of others nothing but whether or not they tell you something that you wish to believe??

    19. Tano Says:

      ” Whether in a counter-factual world the recovery could have been faster is unknowable.”

      Some people think that knowledge comes simply, and most reliably, through straightforward deduction from one’s premises.
      Evidence from the real world is nothing but fodder for opinionated (re)interpretation.
      This habit, more than anything, has led to the sorry state of the modern American right.

    20. ErisGuy Says:

      “Evidence from the real world is nothing but fodder for opinionated (re)interpretation.”

      Ah, yes. Deconstructionism: all is interpretation.

      It is true that in an era of Socialism, the Right’s habit of premises, logic, deduction falls before the vituperative framings of the deconstructionist Left. Why people should choose hate, lies, ignorance over reason and wisdom is opaque to me.

    21. Tim Says:

      The problem with your reasoning, Tano, is that you impute recovery with Roosevelt’s policies. There is a natural cycle under which recovery would have likely occurred with the government doing nothing. The question is really did Roosevelt’s policies help or hinder recovery? It is unarguable that the depression continued on despite Roosevelt’s policies.

      You could argue, as you seem to be doing, that he should merely have spent even more and that would have brought us out of depression. I disagree with this opinion. Feel free to hold it though, I won’t try to talk you out of it. I think most economists would disagree with you on this in today’s state of knowledge. In my opinion, it is not just WWII spending that brought us out of the depression but also the state of the world with other advanced economies being largely destroyed and there being no alternative to US made goods.

    22. Dr. Weevil Says:

      Wake up, everyone. The problem with Tano’s numbers is that they give “nominal GDP” – he even says so. You have to adjust for inflation. According to this site (http://www.usinflationcalculator.com/inflation/historical-inflation-rates/) there was massive deflation under Hoover, and quite a bit of inflation under Roosevelt. That means that Tano’s numbers grossly misrepresent real (i.e. inflation-adjusted) GDP. When comparing economic performance over a number of years, nominal numbers are simply worthless if there are any significant changes in the inflation rate. To put it another way, any idiot can make the nominal GDP increase by inflating the currency, as FDR did. Any idiot can also destroy the economy by putting the inflation rate deep into negative numbers, as Hoover did.

    23. ErisGuy Says:

      Cliometrices, the use of numbers and equations in place of judgment when writing history has not been demonstrated to be accurate.

      GDP is not a measure of the misery of the depression.

      IIRC, even FDR admitted his policies had made one-third of the nation homeless and starving: “I see one-third of a nation ill-housed, ill-clad, ill-nourished.” In 1936. After four years of his beneficence.

    24. Owen Says:

      Thank you Dr. Weevil. Mike was wrong about when the Depression began, but his king-dropping took care of that. Tano is wrong about pretty much every thing else. I have read “The Forgotten Man”, “The New Dealers War” and several other books on this subject. One of the best was a fairly short, non-political but fact-filled book titled “Rethinking The Great Depression” by economist Gene Smiley. His conclusion was that the U.S. was in a depression into and through WW II. As he roughly put it borrowing staggering amounts of money while employing 10 million plus people at life-threatening jobs for poverty wages doesn’t quite cut it in the “depression ending” department. I also seem to recall that the “mini-recession” of ’37-38 featured unemployment in the area of 17-18%. Oh, and Subotai, dishonesty with the public on very important subjects is nothing new for the Left – FDR and his closest advisers knew he was dying prior to the 1944 elections but chose not to inform the public that they were actually voting for Harry Truman. None of the preceding, or any other data, is likely to convince a Lefty that their icon FDR wasn’t a great hero who saved the country from the Depression.

    25. MikeK Says:

      I don’t agree I was wrong. I was merely conceding the argument to those who seem to feel very strongly about their opinions. I still believe that 1929 was a Panic and FDR turned it into a depression, just as Obama is doing. I’m just not going to debate people who use such intense and personal arguments. It isn’t worth the pain.

    26. Michael Hiteshew Says:

      “In fact, what Reid is acknowledging is that the Democrat majority in the Senate is going away and now is the time to pack the courts and regulatory agencies…”

      My thoughts exactly as soon as I heard this was afoot. But this is just the second act of the play. Act one, the Obamacare catastrophe, has made them fearful of the upcoming midterms, thus the nuclear option. But the public has a short memory and the left has air superiority. There’s still an entire year yet for the media to spin away. We’ll see. BTW, I still think the right came out of the shutdown looking far more principled than the left, which will help in the elections.