Comments on: The New Deal and the Great Duration

By: david

david — Thu, 26 Feb 2009 06:06:10 +0000

pretty typical of the libertarian deniars.

By: Andy

Andy — Sun, 28 Dec 2008 10:39:31 +0000

My view on the current recession is that it will not be as bad as the Great depression and that we are more than half way through it. Just a few months ago people were talking about high oil prices, inflation and over valued stock markets. Suddenly, relatively speaking, all these issues have been turned on their head with oil prices crashing, deflation rather than inflation a concern now and stock markets that have fallen off a cliff. The interconnectedness of the global economy magnified the severity and speed of the economic downturn, but the same forces will also work in reverse to bring back economic growth just as fast. See more details : http://www.savingtoinvest.com/2008/12/how-long-will-current-recession-last.html

By: Donnie

Donnie — Sat, 06 Dec 2008 10:45:28 +0000

Mr. Higgs,

Your post demonstrates that the Fed actions must be viewed as part of the New Deal. But the only conclusion we can draw is that the New Deal was a bad thing. Unfortunately, it doesn’t prove that Keynesianism is also a bad thing. In fact, it vindicates Krugmanites that say Roosevelt wasn’t really keynasian (or not enough).

I wish I could be more convinced that New Deal policies were that bad, and that they slowed the recovery.

By: ew

ew — Sat, 06 Dec 2008 10:25:26 +0000

I can’t see why the liberal illuminati can’t look at history and figure that spending like this is a bad idea in the midst of a recession

By: Josh

Josh — Sat, 06 Dec 2008 07:42:25 +0000

Eh. Austrians hate the New Deal because Roosevelt did something. Most Americans loved the New Deal because Roosevelt did something. Most Keynesians believe he didn’t do enough, and all Austrians think he did too much.

Considering that the depression was global and certain nations emerged sooner than others, what nation followed Austrian principles closely and how did the depression turn out for them? If nobody followed them successfully then at least I feel safe assuming that nobody will follow them this time and I can stop reading mises for a few years.

By: C (The Forgotten Man)

C (The Forgotten Man) — Sat, 06 Dec 2008 02:50:04 +0000

Here comes the NuNuDeal!

By: fundamentalist

fundamentalist — Sat, 06 Dec 2008 02:30:30 +0000

This just amplifies the principle of Austrian econ that says you can’t derive theory from data. It seems that every author has a different view of what happened during the depression, what caused it and what the results of policy were, all because everyone emphasizes different facts and interprets them differently. The only way to interpret history is to approach it with sound theory first, that is, Austrian theory.

By: newson

newson — Fri, 05 Dec 2008 18:16:53 +0000

for those who are interested in the fed’s 1936/7 sterilization of the massive gold inflows, salerno has a good article:

http://www.fee.org/publications/the-freeman/article.asp?aid=4942

actually, it’s a good overall primer for those who don’t have the time for the longer “america’s great depression”.

By: Stanley Pinchak

Stanley Pinchak — Fri, 05 Dec 2008 16:12:13 +0000

I think that Higgs is still onto something here in our current recession. Everyone wants to know what is going on with the bailout money. This uncertainty theorem seems to justify the current reluctance to lend and borrow, despite the great incentives that the Fed and Treasury have been using. Apparently too much stick has been indiscriminately applied recently for the typical countercyclical policies to work their “magic” once again and blow us up a new business cycle.

By: spencer

spencer — Fri, 05 Dec 2008 13:17:54 +0000

You are completely right that the Feds action in 1937 were a consequence of the New Deal. If you read the Fed minutes it is obvious that the Fed was so convinced that the strong growth in 1935-36 would cause inflation that they had no choice but to tighten.

See, if there had been no New Deal the Fed would not have had to tighten because they would not have been worried that strong growth was generating inflation.

By: Caveman

Caveman — Fri, 05 Dec 2008 12:44:35 +0000

If I recall, Gov’t spending is part of the GDP equation. And during the Great Depression, Gov’t spent the hell out of everybody.

I would guess mainstreamers would argue that’s exactly why we need increased government spending/intervention now. For Keynesians, the solution is always more state intervention.

By: David Bratton

David Bratton — Fri, 05 Dec 2008 11:30:19 +0000

The government was also engaging in a lot of price fixing at the time so I don’t know how useful those GDP numbers would be even if they hadn’t counted government spending.

By: ajax

ajax — Fri, 05 Dec 2008 10:36:00 +0000

If I recall, Gov’t spending is part of the GDP equation. And during the Great Depression, Gov’t spent the hell out of everybody.

By: Horst

Horst — Fri, 05 Dec 2008 10:10:57 +0000

From the article: “Mainstreamer: Nonsense. The recovery after the beginning of the New Deal in 1933 was rapid. Look at the data, you old fool. Real GDP rose by about 43 percent between 1933 and 1937.”

Is that claim by New Deal defenders accurate? Even if they can find numbers to substantiate that claim, I’m sure they counted things like spending on government programs as part of GDP or other funny business.

To claim that we had China-like economic growth during the Depression seems dubious to say the very least.