By MGM
Of course it did not work. The short term improvement was due to the Repeal of Prohibition and all the job it created in the alcohol industry. FDR could not get unemployment much below 15% until he started drafted millions to fight and die in World War II.
HT: Jeff Hummel
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{ 10 comments }
Hmmm. The charts showed a return to normal after inflation. So, what went wrong?
The best is the salary line that is tortured to meet the other two at intersection.
Actually, real wages (and their purchasing power) rose during Great depression as the State refused to allow nominal wages to fall which in turn increased unemployment.
The main reason is that in September 1931 nominal wage rates were 92 percent of their level two years earlier. Since a significant price deflation had occurred during these two years, real wages rose by 10 percent during the same period, while gross domestic product (GDP) fell by 27 percent. By contrast, during 1920–1921 — a period that was accompanied by a severe deflation — “some manufacturing wages fell by 30 percent. GDP, meanwhile, only dropped by 4 percent.”
http://mises.org/daily/3689
And ten years later, FDR and MGM were fighting the EVILS of inflation. What possesses politicians to think they know the first thing about economics? (Although I might also ask, what possesses many economists to think THEY know the first thing about economics?)
Inflation day are here again!
Heck, we can’t even get the Keynesians to agree on a definition of inflation, how can we expect them to give a truthful analysis? How can inflation not include food, fuel, and taxes? How can transfer payments to welfare and the 99 weekers not be considered wages for non-producers?
Indeed, but more simply, how can inflation just be considered the increase in prices over time but not the decrease in purchasing power of the monetary unit over that same period?
Keynesian always define inflation as “rising prices”, as if they occur spontaneously out of nothing. They fail to see it as a monetary problem. They also find good reasons to exclude things like gas and food from their own wrong definition.
I am so grateful to the government for repealing the “law of scarcity.” Print the money and we have all the steel, shoes, lunch room hamburgers, and gasoline you could ever want. “What, me worry?”
My head just exploded.
Funniest…video….ever.
What bullshit. This is especially disappointing to me because I’m a big fan of old MGM and Warner flicks. To see how much they were a part of the government machinery is appalling.
The purchasing power and cost-of-living lines didn’t have to be stated separately at all, because they are necessarily inverse to each other. And no effort was made to explain how high prices are a cause of high incomes and greater employment.
It’s no wonder that Keynes took hold of the world with his ‘General theory’ a couple years later.
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