Patterico's Pontifications

5/29/2014

GDP Shrinks 1% in First Quarter 2014

Filed under: General — Patterico @ 7:18 am

Details at Hot Air. It’s the first contraction in three years.

This administration is shaping up to be very similar to that of FDR, one of the worst presidents in American history. Obama came into office facing an economy that already was doing poorly, thanks to bubbles inflated by Fed policy, and swung a Louisville slugger at the knees of that economy repeatedly. New regulations on employers, and new goodies for unions? Take that, economy! Misallocation of resources through monstrously huge government spending programs? Take that, economy! ObamaCare? How do you like that, economy?! Wham! Wham! WHAM!!!

And what do you know? The economy is starting to buckle under the repeated blows.

We’ve been through it all before, in the 1930s. This is a milder version, but the principles are exactly the same.

P.S. Admin Guy is working on issues with the site. Please be patient!

173 Responses to “GDP Shrinks 1% in First Quarter 2014”

  1. Ding.

    Patterico (9c670f)

  2. Damn you, Patterico.

    Recovery 2014

    JD (78609b)

  3. As a businessman I was shocked, shocked at the economic contraction! I thought everything was going just swimmingly. I’ll turn my sarcasm off now.

    Hoagie (4dfb34)

  4. What we need to focus on is Amnesty, because that will really ignite an economic recovery!

    daleyrocks (bf33e9)

  5. Plus fighting climate change! Most economists will tell you that fighting climate change creates jobs. Just look at Europe or ask Nancy Pelosi.

    daleyrocks (bf33e9)

  6. This administration is shaping up to be very similar to that of FDR, one of the worst presidents in American history.

    I’m still amazed that supposed experts in economics for decades were long puzzled by the sluggishness of the US economy under Roosevelt. Well, duh, hey, all you geniuses! Tax rates were as high as the 70- to 80-percentile range back when FDR was having a field day.

    I hope such baffled economists are not the same experts who are giving advice for our economy today. However, there appear to be plenty of “experts” in the field of climate (“CO2 and global warming are a horror, a disaster!”) and in the field of nutrition and health (“fat, not sugar, is the main cause of obesity, diabetes and poor physical condition!!”).

    Mark (99b8fd)

  7. Obviously, the food stamp program needs to be expanded.
    Your liberal intellectual superiors will explain how that immediately stimulates the economy.

    Orcadrvr (38828c)

  8. if consumer spending rose 3.1% and the economy still contracted, how is this the weather’s fault?

    i think the associated press propaganda sluts, the reuters propaganda sluts, the cnn propaganda sluts

    I think they have an agenda

    happyfeet (8ce051)

  9. The first quarter was the weather’s fault; next quarter, it’s back to blaming George Bush!

    The economist Dana (3e4784)

  10. Of course, it’s always possible that George Bush caused the bad weather in the first quarter, just to get the blame off of him for a few months, but we aren’t fooled by that, not one little bit!

    The meteorologist Dana (3e4784)

  11. He’s gonna wash those jobs right out of his hair… rinse… repeat…

    Colonel Haiku (2601c0)

  12. It’s the economay’s fault.

    Colonel Haiku (2601c0)

  13. BIG excuse-making, finger-pointing speech in 3… 2… 1…

    Colonel Haiku (2601c0)

  14. Mark wrote:

    I’m still amazed that supposed experts in economics for decades were long puzzled by the sluggishness of the US economy under Roosevelt. Well, duh, hey, all you geniuses! Tax rates were as high as the 70- to 80-percentile range back when FDR was having a field day.

    And no one wants to give the credit to the politicians who did get us out of the Depression: Adolf Hitler and Hideki Tojo!

    It was a stimulus program of sorts: greatly increased demand for manufactured goods, goods which would be used up rapidly and have to be replaced, all at the same time that everyone else’s manufacturing plants were being blown up! It was a great, great plan!

    The historian Dana (3e4784)

  15. The economy is racist!

    Hadoop (f7d5ba)

  16. “It was a stimulus program of sorts: greatly increased demand for manufactured goods, goods which would be used up rapidly and have to be replaced, all at the same time that everyone else’s manufacturing plants were being blown up! It was a great, great plan!”

    The historian Dana – Is that similar to what those Austrian Loons call the “Broken Window” Theory?

    daleyrocks (bf33e9)

  17. Pay no attention to the fact that BLS labor force data confirm jobs are not yet back to pre-crash levels in spite of all Administration claims of job creation and drops in the unemployment rate.

    The BLS is raaaaacist!

    daleyrocks (bf33e9)

  18. So, I guess Goldman Sachs has upgraded Q2 to 4% over no snow and pent up demand, after it downgraded Q1 like five times and counting.

    Raise your hands if you’ve seen signs of economic growth, the quarter’s got just a month to go after all.

    Economics, right up there with phrenology in the social sciences.

    gary gulrud (46ca75)

  19. Dang, the economy has gotten so bad that they can no longer manipulate the numbers to fake growth.

    max (4fdf98)

  20. “Raise your hands if you’ve seen signs of economic growth, the quarter’s got just a month to go after all.”

    gary – Hey, they have enough time to change some definitions in the way numbers are calculated to eke out some growth, just the way the Climate Alarmists arbitrarily lowered years ago temperatures to show more recent temperature increases, so all is not yet lost.

    daleyrocks (bf33e9)

  21. 10. The meteorologist Dana (3e4784) — 5/29/2014 @ 8:42 am

    Of course, it’s always possible that George Bush caused the bad weather in the first quarter, just to get the blame off of him for a few months, but we aren’t fooled by that, not one little bit!

    Actually, it was air pollution in China that caused the bad weather.

    http://ecowatch.com/2014/03/12/cities-exceed-beijings-air-pollution-levels/

    http://en.wikipedia.org/wiki/Global_cooling

    Human activity — mostly as a by-product of fossil fuel combustion, partly by land use changes — increases the number of tiny particles (aerosols) in the atmosphere. These have a direct effect: they effectively increase the planetary albedo, thus cooling the planet by reducing the solar radiation reaching the surface; and an indirect effect: they affect the properties of clouds by acting as cloud condensation nuclei

    Sammy Finkelman (b66da2)

  22. Oh dear Allah, Sammah.

    JD (78609b)

  23. It’s true.

    And the reduction in worldwide air pollution caused by the Great Depression caused the Oklahoma Dust Bowl, and record high temperatures throughout the world about 1934 or 1935..

    Sammy Finkelman (b66da2)

  24. Mr rocks asked:

    Is that similar to what those Austrian Loons call the “Broken Window” Theory?

    Actually, it’s kind of the opposite. The “broken window” theory is that if you leave an urban building with visible broken windows, vandals will be attracted and break more windows, and thus the one measure to take against vandalism is to keep places in good repair. Under that theory, if you repair one broken window promptly, the other windows are less likely to be broken deliberately, meaning fewer window repairs, and thus fewer jobs for window makers and installers.

    To follow the stimulus notion, President Obama ought to encourage thugs to break out more windows, thus stimulating demand for glass, wood, vinyl, glue, screws, for window manufacturers, and for carpenters and handymenpersons to install them.

    More, since modern windows have better insulating qualities, such would lower heating and cooling requirements, thus reducing greenhouse gas emissions. We have a winning idea here!

    The Dana with the absolutely brilliantest ideas! (3e4784)

  25. “Actually, it’s kind of the opposite.”

    The Dana with the absolutely brilliantest ideas! – I completely disagree with the FDR, Hitler and Tojo part of the analogy. Hitler and Tojo were breaking a lot of windows in a lot of places which needed to be repaired according to Loony Austrian economics. War is good!!!!!

    daleyrocks (bf33e9)

  26. Cow farts!

    daleyrocks (bf33e9)

  27. ==And the reduction in worldwide air pollution caused by the Great Depression caused the Oklahoma Dust Bowl, ==

    http://www.amazon.com/The-Worst-Hard-Time-Survived/dp/0618773479

    Sammy you are wrong. Read this book, please, before you comment on the subject of the dust bowl ever again.

    elissa (550033)

  28. Mr rocks, as far as the economy is concerned, war is good . . . as long as you aren’t the one getting your factories bombed and your cities burned down.

    The economist Dana (3e4784)

  29. And not just a synopsis or somebody’s review of the book. Read the whole damn thing, Sammy

    elissa (550033)

  30. elissa wrote:

    And not just a synopsis or somebody’s review of the book. Read the whole damn thing, Sammy

    Oh, snap! The word is in, Mr Finkelman, and you will obey!

    The amused Dana (3e4784)

  31. I’m sick of having to read around and work around his BS, Mr. Dana. It’s makin’ me bossy</e!tc

    elissa (550033)

  32. The Dana with the absolutely brilliantest ideas! (3e4784) — 5/29/2014 @ 11:03 am

    The “broken window” theory is that if you leave an urban building with visible broken windows, vandals will be attracted and break more windows, and thus the one measure to take against vandalism is to keep places in good repair.

    Not that broken windows theory.

    The other broken windows theory. The French one, over one hundred years earlier, by Frédéric Bastiat. Which was what he described as what other people held.

    http://en.wikipedia.org/wiki/Parable_of_the_broken_window

    It’s also known as the broken window fallacy or glazier’s fallacy.

    Under that theory, if you repair one broken window promptly, the other windows are less likely to be broken deliberately, meaning fewer window repairs, and thus fewer jobs for window makers and installers.

    To follow the stimulus notion, President Obama ought to encourage thugs to break out more windows, thus stimulating demand for glass, wood, vinyl, glue, screws, for window manufacturers, and for carpenters and handymenpersons to install them.

    More, since modern windows have better insulating qualities, such would lower heating and cooling requirements, thus reducing greenhouse gas emissions. We have a winning idea

    Sammy Finkelman (b66da2)

  33. Sorry – I forget to not quote the rest of it. What you were talking about was the broken windows theory of James Q. Wilson, dating from 1982:

    http://en.wikipedia.org/wiki/Broken_windows_theory

    He held it was true.

    Frédéric Bastiat’s was a different theory about broken windows, acyually, in its original version, one broken window, dating from 1850, which he held was NOT true.

    Sammy Finkelman (b66da2)

  34. The real reason wars are associated with prosperity is because governments throw off all fiscal and monetary restraint then.

    (In my opinion, it’s not throwing off fiscal restrant that does it, but throwing off monetary restraint that does it)

    That is what Paul Krugman is thinking about when he says the stimulus wasn’t big enough. All those who say that World War II spending, or spending in preparation for it, ended the Great Depression are, in essence, agreeing with him. If you say something else ended it, then you can logically disagree.

    Right now Paul Krugman is campaigning for or arguing for Europe to raise its inflation rate.

    Sammy Finkelman (b66da2)

  35. Coming up will be a reprise of the ‘Casa Grande’ experiments to show us a ‘better’ way to live.

    Could we get a Comments box that actually shows everything we are typing? The box ‘sort of’ ends as it encroaches upon the gray RH column, but you have to monitor the comment preview to see what you’re typing out there in right-field as the cursor disappears into the ether until it reappears in a new line.

    askeptic (8ecc78)

  36. …and, what’s happened to the ‘strike’ function?

    askeptic (8ecc78)

  37. This is a milder version, but the principles are exactly the same.

    Well, so far it has been a “milder” version. But it ain’t over yet.

    J.P. (bd0246)

  38. 30.elissa wrote: And not just a synopsis or somebody’s review of the book. Read the whole damn thing, Sammy

    I would only need to read that book for one thing: The cause , and maybe the timing, of the Oklahoma dust bowl. That’s what the issue is here.

    But nobody at the time attributed it to the Great Depression, so that won’t be in the book.

    Instead, the book will have what was the common theory they had at the time.

    And which dates the drought to about 1930 (too early for the Great Depression to have had much, if any, of an effect, as the winter of 1929-1930 probably did not witness much lower burning of coal than previous years)

    If I read the whole book, I could probably find things in it to show that in fact it fif not start in 1930, but really a few years later, after coal burning had dropped by a lot, all over the world. I do have a feeling that if I read the book, I could bring proofs from it that the most commonly held theories are wrong, and don’t quite fit the facts.

    But it would be more important to read other books, that said other things. That’as where I will get other theories.

    I believe the Dust Bowl is also blamed on poor farming, which indeed maybe could have caused the topsoil to be loose – although wait! – that’s really caused by chopping down trees – but that would not have explained its timing.

    Again, chopping down trees was not a theory they had at the time. It makes a great deal of difference what people said contemporaneously.

    Sammy Finkelman (b66da2)

  39. The Bastiat theory is one based on opportunity costs, but I think it fails in hat regard, because when the velocity of economic activity is increased, it benefits the economy as a whole. As far as individual opportunities being lost — the notion in the linked article is that having to fix the window might cost the opportunity to buy a new pair of shoes — that objection is true, but there’s a randomness of opportunity which can’t always be forecast, and the argument fails to take into account that the increased velocity of activity in itself creates more opportunity; because people are working harder and faster, they wear out their shoes more often, and have to buy new ones more frequently.

    The notion that war is an economic opportunity exists because the goods manufactured are so quickly expended, and need replacement so frequently; that’s pretty much a straight velocity argument. It was most simply illustrated in the US, because our industry was immune from enemy action. When it came to the countries actually in the war theaters, things changed. At the end of World War II, the US had 45% of the world’s industrial capacity, due almost entirely to our location.

    But that had it’s own downside: the war was our economic opportunity, but with Japan and Germany devastated, the economic result ten years later was that every factory in those two countries was, in effect ten years or less old, while we had many plants which were forty and fifty years old; the war forced modernization of their industries in a way that didn’t occur as neatly here.

    The economic factors started becoming so varied and numerous that no one could really consider everything; there were too many unanswered “what ifs.” I’d argue that part of the economic result was that the US got so far ahead of the world, that, when the world started to catch up, it was much more of a shock to the American worker than anticipated.

    And if this answer seems a bit disjointed, it’s because I’m writing it while at work, and doing other stuff!

    The non-Keynesian economist Dana (3e4784)

  40. 35. askeptic on 5/29/2014 @ 12:36 pm

    Could we get a Comments box that actually shows everything we are typing? The box ‘sort of’ ends as it encroaches upon the gray RH column, but you have to monitor the comment preview to see what you’re typing out there in right-field as the cursor disappears into the ether until it reappears in a new line.

    When the comment thread here gets long enough to fall below:

    Meta:
    RSS 2.0
    Comments RSS 2.0

    we get the right hand margin back. In fact, I believe you’llsee it in the next comment.

    We’re are now approaching that location.

    Sammy Finkelman (b66da2)

  41. i’ve had a 4 wall box all thread long… but no strike through button as of yet.

    protip: if you’re going to make technical comments on glitches, include your browser/op system for the admin guy. (every time, so he doesn’t have to search for it)

    Vista SP2/FF29.0.1

    redc1c4 (abd49e)

  42. so we had a negative GDP… “unexpectedly”!

    things must be really bad if the MFM isn’t trying to float that boat anymore

    redc1c4 (abd49e)

  43. ==I would only need to read that book for one thing: The cause , and maybe the timing, of the Oklahoma dust bowl. That’s what the issue is here.==

    Righto. That was my point. Read the book, Sammy. Yeah, knowing about “the cause and the timing” would probably have been quite useful before you opined on both. If you could just face that, like every one of us here, there are many many things you are not an expert on, and therefore should probably stay in the background on about those topics, it really would help make this blog nicer for all.

    elissa (550033)

  44. Sam the Sham isn’t going to read anything that doesn’t support his established world view…

    and, if for some reason, a stray fact does find its way into his little world, it will be tortured until it does fit in. (or else %-)

    redc1c4 (abd49e)

  45. turns out the 1st Qtr. numbers are worse than this headline shows, once you take out the ObamaCare extortion spending

    http://www.zerohedge.com/news/2014-05-29/excluding-obamacare-us-economy-contracted-2-first-quarter

    redc1c4 (abd49e)

  46. But it would be more important to read other books, that said other things. That’as where I will get other theories

    I think there’s a song in there, somewhere.

    Any book you can read, I can read better.

    I can read any book, better than you!

    BTW, Elissa, I am granting Sammy an exemption from your book reading assignment since he has yet to complete (to my uncertain knowledge) the research on Tattoo books that I ordered. Take a number, people.

    felipe (098e97)

  47. Well, felipe it’s not above me to try to jump in line. I am willing to offer him a gold star for verified reading–plus he’ll gain the added benefit of improved knowledge and respect. What are you offering as an incentive?

    elissa (550033)

  48. We are just getting poised for RECOVERY SUMMER!!!1!!

    Unless of course, Patterico succeeds in his evil attempt to talk the economy down. Wrecker!!!

    Kevin M (56aae1)

  49. Uh…(looks at feet)

    felipe (098e97)

  50. The “1%” is no longer a club for just Mitt Romney and the Koch Brothers.
    Now the entire country is part of the “1%”
    …the negative “1%.”
    Or something.

    Elephant Stone (6a6f37)

  51. “Mr rocks, as far as the economy is concerned, war is good . . . as long as you aren’t the one getting your factories bombed and your cities burned down.”

    The economist Dana – Mere glitches or broken windows to be repaired. I don’t understand why libertarian fans of Austrian Economics are so anti-interventionist when war is so clearly economically beneficial.

    daleyrocks (bf33e9)

  52. Mr Finkelman wrote:

    That is what Paul Krugman is thinking about when he says the stimulus wasn’t big enough. All those who say that World War II spending, or spending in preparation for it, ended the Great Depression are, in essence, agreeing with him. If you say something else ended it, then you can logically disagree.

    The esteemed Dr Krugman has an unfortunate political problem with his economics: he favors much greater spending politically, and is tying to justify it economically, but has ignored a very basic, and very serious problem. Keynesian economics holds that governments ought to use deficit spending to stimulate the economy during downturns, but the other half of that is that governments should balance their budgets and pay down some of the debt accumulated when their economies improve. Even during the four balanced budget years of FY1998, 1999, 2000 and 2001, we continued to accumulate debt.

    Now, if we had been borrowing almost exclusively from within, what we would have been doing is reorganizing how our own money was spent, but when those treasury bills were repaid, that spending would still be within our own economy. That was what was done during World War II, and we finished FY1946 with 99% of the national debt owed to Americans; very little of the debt service left our economy, so even the debt service payments helped us.

    But that’s not what we have been doing today. Foreign counties and agencies currently own about 34% of our national debt, so roughly 34% of our debt service payments leave our economy. That is a depressing effect on the economy as a whole: it takes part of the value of our production, and sends it overseas for no gain for ourselves. Part of whatever stimulus actually occurs is frittered away without helping us at all.

    But there’s a more insidious problem, that I’ve never heard any other economist mention, so I’ll call it the Dana Theorem:

    1- Because the measure of GDP includes government spending, and government spending includes funds borrowed from foreign sources, we are overstating our GDP by the amount borrowed from abroad; we are not really producing as much as we think we are, because the numbers include production from foreign countries in our numbers; and

    2- Because we have been engaged in deficit spending almost continuously since 1969, in effect stimulating the economy almost every year for the last 45, stimulus is the (not so) new normal; it is part of our baseline economy these days. (You can see some outside recognition of this when you read about governments an overall deficit, but having achieved an operational balance, meaning that government spending exclusive of debt service is completely supported by ordinary revenues.) We have effectively inoculated our economy to stimulus, and that is why the 2009 stimulus plan didn’t work.

    A real, professional economist could put actual numbers into those points, and prove or disprove them; that much is beyond my expertise. But I’d note that we’ve had various stimulus programs every time there has been a recession, and it seems that those stimulus programs were less and less effective each time they were employed. That I take as at least anecdotal evidence concerning my point about our having achieved immunity from stimulus. Perhaps that’s why the esteemed Dr Krugman thought that the 2009 stimulus should have been much larger: he recognized that we needed a much larger stimulus to overcome the growing immunity to it. Unfortunately, following his idea would have meant a much greater increase in the national debt, and a significantly higher debt service, even more of which would be sent overseas.

    The Dana now home from work so maybe he can write a bit more coherently (af9ec3)

  53. “Perhaps that’s why the esteemed Dr Krugman thought that the 2009 stimulus should have been much larger: he recognized that we needed a much larger stimulus to overcome the growing immunity to it”.

    This sounds like classic drug addiction. I like the Dana theorem.

    felipe (098e97)

  54. A further problem with our endless dependence on stimulus is that balancing the budget has a depressing effect. If we are borrowing, say, $300 billion every year from foreign countries, and all government spending counts as part of GDP, roughly $16.8 trillion in 2013, not importing that money would decrease our GDP by that amount, down to $16.5 trillion. That’s a recessionary pressure.

    I see only two potential escapes from that trap:

    1 – Either actual production in our economy must increase so significantly that it can cover that recessionary pressure, which would mean that people would be working harder, producing more, but not seeing the full rewards for that; or

    2- Increase inflation so that our foreign debts, which are denominated in dollars, lose some of their value in real terms, allowing the US to keep more of what it produces. Since we control our own currency, and do not have any foreign debts in foreign currencies, this can work, at least once. The Fed has already been doing a bit of this with the various Quantitative Easing programs, which are just fancy terms for printing money declaring that they have more money in their deposits than they did before.

    I was going to write more, but my darling bride (of 35 years and 10 days) just called me to supper.

    The Dana starting to run on and on and on (af9ec3)

  55. Time for a GDP summit where President s.f.b’s. can continue to act stupidly.

    mg (31009b)

  56. OK, well, they’re watching a tape of So You Think You Can Dance while eating supper, and I can certainly miss that!

    In theory, we don’t have to borrow money or pay taxes at all, and the feral government can spend whatever it likes. When you write a check, if you don’t have enough money in he bank, the bank bounces it. However, when the federal government writes a check, it is writing a check on the Treasury, and the Treasury won’t bounce the check, even if there’s not enough money on deposit to cover it. If the check is never bounced, if everybody accepts the dollar bills electrons in the bank accounts as real money, then money has been created.

    It isn’t even a much different step from the way that commercial banks create money by the ability to lend money without pulling money out of accounts thanks to the magic of reserve requirements. (I like to think of it as the covalent theory of money. A covalent bond is a chemical bond which enables two or more atoms to share electrons in their outer electron “shell,” so that both may be stable. The covalent theory of money means, in effect, that the same dollar is in more than one account at the same time, and it works as long as the account holders don’t both attempt to withdraw that dollar at the same time.

    The Dana continuing to run on and on and on (af9ec3)

  57. Dana, I don’t see the “strike” feature. How are you able to access it ?

    Elephant Stone (6a6f37)

  58. Take a wild guess.

    nk (dbc370)

  59. C’mon, Stone. Join the strikeout club!

    felipe (098e97)

  60. 25. The Dana with the absolutely brilliantest ideas! – I completely disagree with the FDR, Hitler and Tojo part of the analogy. Hitler and Tojo were breaking a lot of windows in a lot of places which needed to be repaired according to Loony Austrian economics. War is good!!!!!
    daleyrocks (bf33e9) — 5/29/2014 @ 11:19 am

    That’s the exact opposite of what the Austrian school says.

    http://mises.org/daily/5069/World-War-II-Did-Not-End-the-Great-Depression

    …What about World War II? Did it end the Great Depression? More generally, is war good for the economy? I answer both in the negative and borrow here from Ludwig von Mises: “War prosperity is like the prosperity that an earthquake or a plague brings.”

    As Higgs points out, because of the array of interventions in the wartime economy, war materiel was valued incorrectly and therefore the GDP data overstate economic conditions. Moreover, conscription and arms production gave a misleading employment picture. Instead, Higgs argues, the war was a period of capital consumption rather than capital accumulation. Tanks, bombs, and helicopters have limited uses outside of military applications. The labor that was used to produce them was not available to produce consumer goods and services; in fact, people went without consumer goods. The warships at the bottom of the world’s oceans represented lost opportunities for real consumption and prosperity. Conflict is sometimes necessary, but we should recognize what wartime expenditures represent: destruction of life and resources. If a depression constitutes a widespread contraction in living standards, then the Great Depression cannot have ended during the war.

    The Austrians have never espoused the “broken windows” theory for the above reasons. It isn’t wealth creation to keep replacing windows as opposed to building new homes. It’s the exact opposite of wealth creation; it’s wealth destruction.

    If you got the impression it’s the “Austrian loons” who came up with this you couldn’t have possibly have gotten that impression from reading what they have to say on the subject.

    Krugman is the loon who thinks “war is good.” As a matter of fact, people like Krugman think that you didn’t even need the war. You could have just pushed airplanes and tanks off of ships, then sink the ships, and keep building more, and end up with prosperity. The Austrians think people like Krugman are the loons.

    Steve57 (61329d)

  61. a lot of times when windows break you can just move the porch fridge in front of where the window was and nobody will notice

    happyfeet (8ce051)

  62. 51. …The economist Dana – Mere glitches or broken windows to be repaired. I don’t understand why libertarian fans of Austrian Economics are so anti-interventionist when war is so clearly economically beneficial.

    daleyrocks (bf33e9) — 5/29/2014 @ 4:30 pm

    Libertarians and conservatives are fans of Austrian economics precisely because they don’t say war is economically beneficial. They say the opposite.

    I got that article from the Ludwig von Mises institute. I suggest you go there and poke around and find out what the Austrians say. Because I have no idea where you got the idea that they espouse something that they in fact categorically reject.

    Steve57 (61329d)

  63. Steve57 – Lighten up Francis.

    daleyrocks (bf33e9)

  64. If anyone wants to know how they say stuff in Austrian, they should ask Barack Obama.

    Elephant Stone (6a6f37)

  65. Sgt. Hulka lives!

    felipe (098e97)

  66. Dear America,

    GDP contracted 1% during the first quarter of this year.
    I need you guys to work harder.
    Go out and build that.
    Or something.

    Signed,

    Barack

    Elephant Stone (6a6f37)

  67. ==a lot of times when windows break you can just move the porch fridge in front of where the window was and nobody will notice==

    Mr. feets, much better to use the the porch fridge for that than the old upright piano as some do. Moisture absolutely ruins the soundboard and makes it off key. People notice that!

    elissa (550033)

  68. you can’t have a proper hootenanny with an off-key pianer that’s for sure

    happyfeet (8ce051)

  69. Mr Stone asked:

    Dana, I don’t see the “strike” feature. How are you able to access it ?

    I just typed in the html code directly. Use the blockquote key, and then replace the word blockquote with strike, and you’ll see how it’s supposed to look.

    The blogger Dana (af9ec3)

  70. elissa wrote:

    Mr. feets, much better to use the the porch fridge for that than the old upright piano as some do. Moisture absolutely ruins the soundboard and makes it off key. People notice that!

    But it’s important to make sure that the front porch fridge stays plugged in, ’cause you’ve got to keep your Mountain Dew cold!

    And this is the absolute truth: Elaine used to combitch that I kept the refrigerator too cold, to keep my Dew at the proper temperature for drinking, and the lettuce would freeze up. Anyhoo, when we bought this house, it came with a refrigerator, and we already owned one. The one we owned is down in the basement, and I can keep my soda as cold as I want it, and my darling bride is happy.

    The Dana from Kentucky (af9ec3)

  71. daley @63, who’s being “heavy?” I honestly am amused that you think it’s the Austrians who think war is good when it’s actually the Keynesians.

    I don’t know if Horwitz and McPhillips would describe themselves of the Austrian or Chicago schools, but they did a paper in 2013 that destroys the idea WWII could have pulled us out of the Great Depression.

    http://www.independent.org/pdf/tir/tir_17_03_01_horwitz.pdf

    …Higgs argues that the traditional macroeconomic measures of
    economic performance are inappropriate for wartime and that they overstate people’s
    real economic well-being during the war. We review his contribution in more detail as
    we proceed. Our contribution complements Higgs’s by examining a number of
    archival sources to explore how the wartime economy affected individuals and households.
    Rather than looking at traditional economic statistics, we explore newspapers,
    diaries, and other primary sources to discover the variety of ways in which the wartime
    economy actually amounted to a retrogression for many families because they had to
    supply additional labor, accept inferior goods, and do without many goods altogether
    as resources were diverted to the war effort and wartime controls constrained the
    market process. The evidence we present confirms Higgs’s argument that wartime
    prosperity was largely an illusion and, thus, that wartime spending is not the path to
    genuine recovery from recession or depression.

    …Although the question of how the Great Depression ended has not been studied as
    widely as the 1929 crash or the critical period between 1929 and 1932, it has been the
    focus of some scholarly writing. The narrative in basic surveys of American history
    typically argues that World War II ended the Great Depression. This canonical story
    credits President Franklin D. Roosevelt’s New Deal policies with pulling the economy
    out of the depths of the Depression and thereby reducing both its length and magnitude.
    However, as important as the New Deal was in mitigating the economic crisis,
    according to this story, it was not sufficient to get the economy all the way out of the
    Depression, and recovery was completed only as a result of military production
    during the war.

    …As noted, many in the discipline of economics still favor this account. Keynesian
    economists in particular favor it because they identify the war as having provided the
    needed boost to aggregate demand. Government spending, they claim, creates a
    multiplier effect on consumer demand, which eventually produces full employment.
    Keynesians of this stripe argue that any net increase in demand will benefit a struggling
    economy regardless of where it comes from or how it is spent. War may seem to
    be an attractive solution because it (supposedly) guarantees significantly larger than
    normal outlays in the name of victory.

    Seriously, how did you get that idea that it was the Austrians who promote this Keynesian drivel?

    Steve57 (61329d)

  72. That is so great. Sometimes it takes many years and much trial and error and many compromises to work out the Mountain Dew issues in a marriage, Mr. Dana. Sounds like you’re one of the lucky ones.

    elissa (550033)

  73. Mr feet wrote:

    you can’t have a proper hootenanny with an off-key pianer that’s for sure

    Real Bluegrass for your hootenanny!

    The Bluegrass Dana (af9ec3)

  74. thanks!

    amazon gave me a free bluegrass cd the other day and you can have one too you just have to do the clicks

    http://www.amazon.com/Bluegrass-Mastery-Vol-Various-artists/dp/B00C6MPTT2

    happyfeet (8ce051)

  75. Dear mister happy,

    there is no such thing as a free bluegrass cd

    Signed,

    Milton Friedman

    Elephant Stone (6a6f37)

  76. there’s also no such thing as a bluegrass cd where you make it and trade it to me for monies

    does that make me a bad person?

    happyfeet (8ce051)

  77. Well played, ES, well played.

    Steve57 (61329d)

  78. Hmmmm … since one can never imprison bluegrass, how could one ever have a free bluegrass cd ?

    Alastor (e7cb73)

  79. TANSTAAFL.

    redc1c4 (abd49e)

  80. I just typed in the html code directly. Use the blockquote key, and then replace the word blockquote with strike, and you’ll see how it’s supposed to look.
    The blogger Dana (af9ec3) — 5/29/2014 @ 6:08 pm

    I am going to try a version of this:
    I think I will say something brilliant now.

    MD in Philly (f9371b)

  81. It didn’t work.
    I used the blockquote key, replaced the word blockquote with brilliant,
    and nothing happened.

    MD in Philly (f9371b)

  82. I think the NLRB has ruled that only people who are members of government approved unions have the right to strike.

    max (4fdf98)

  83. MD, use the italic key. In the front and in the end there are brackets with em in them. Replace the em with strike.

    Or just do it manually. It takes longer to tell it than to type it. Left bracket strike right bracket at the front. Left bracket front slash strike right bracket at the end.

    http://www.word or phrase Maybe if you put your cursor on the fake link it will show on the bottom of your screen.

    nk (dbc370)

  84. oh btw on the free cd thing so far it’s just the Balsam Range song what’s ended up on my playlist

    http://www.amazon.com/Bluegrass-Mastery-Vol-Various-artists/dp/B00C6MPTT2

    happyfeet (8ce051)

  85. Sigh.

    nk (dbc370)

  86. oh. Also I’m sorry for you americans and your pitiful, humiliating, very very public inability to grow your economy.

    Tell me how i can help and I will.

    happyfeet (8ce051)

  87. is there a website where i can sponsor a food stamp baby?

    I’ve heard the multiplier effects are IMpressive

    happyfeet (8ce051)

  88. “daley @63, who’s being “heavy?” I honestly am amused that you think it’s the Austrians who think war is good when it’s actually the Keynesians.”

    Francis – Sometimes you are as clueless as Sammy.

    daleyrocks (bf33e9)

  89. Did you know that during WWII there was rationing and scrap drives (we call it recycling) and unless you worked in a vital industry you were drafted in the Army or if you were 4-F you played for the Chicago Cubs and there were no food stamps, or Medicare, or Medicaid, or free AIDS treatment, or free tranny transformation, or Obamacare subsidies, or Starbuck’s, or WalMart, or iPhones, or all the factories in China and you could not even buy a car until 1948 and even then they only came in green so you want to maybe not use the Great Depression or WWII as anything for anything going on with the economy today except as a negative example which means you should not use it as any example and in a rational society economists would be exiled for parasitism or made to find jobs in carnival sideshows?

    nk (dbc370)

  90. the America that fought WW2 is dead and gone, and it really really would be best indeed for all concerned if her extant aficionados would work their way through the five stages of grief with dignity and alacrity

    the America you have today is just a silly orgy of fascist ivy league trash graduate students with entitlement issues

    and the whole world knows it

    happyfeet (8ce051)

  91. I tried to read your sentence aloud and I almost passed out from lack of oxygen, nk. You’re right. Times were way different then which makes it silly for people to try to do comparisons with modern times. I think the infirm 4-F types are still playing for the Cubs tho.

    elissa (550033)

  92. Just in case you were in doubt, you can see the whites of their eyes now. Fire at will.

    gary gulrud (46ca75)

  93. For cryin’ out loud. Here is how to strike out.

    http://www.angelfire.com/nm/thehtmlsource/jazzup/text/strikeout.html

    felipe (098e97)

  94. Pity the poor bastard who follows orders:

    Directive No. 3025.18, “Defense Support of Civil Authorities,” was issued Dec. 29, 2010, and states that U.S. commanders “are provided emergency authority under this directive.”

    “Federal military forces shall not be used to quell civil disturbances unless specifically authorized by the president in accordance with applicable law or permitted under emergency authority,” the directive states.

    “In these circumstances, those federal military commanders have the authority, in extraordinary emergency circumstances where prior authorization by the president is impossible and duly constituted local authorities are unable to control the situation, to engage temporarily in activities that are necessary to quell large-scale, unexpected civil disturbances” under two conditions.

    The conditions include military support needed “to prevent significant loss of life or wanton destruction of property and are necessary to restore governmental function and public order.” A second use is when federal, state and local authorities “are unable or decline to provide adequate protection for federal property or federal governmental functions.”

    gary gulrud (46ca75)

  95. The Cubs won the pennant with 4-Fs in 1945 (the last time) and they took it as a winning lineup and have followed that strategy since. — Credit Mike Royko

    nk (dbc370)

  96. daley, sometimes bad internet humor/sarcasm is just bad.

    Steve57 (61329d)

  97. Just in case you’re into prayer, forget it, God has had it with your godless duplicity and idolatry.

    http://www.zerohedge.com/news/2014-05-29/dust-bowl-conditions-have-returned-kansas-oklahoma-and-north-texas

    gary gulrud (46ca75)

  98. …there were no food stamps,

    I think there was, or some other kind of food program. Food stamps hit New York about 1969 or 1970. but some sort of thing existed in some other parts of the country going back into the 1930s.

    http://www.fns.usda.gov/snap/short-history-snap

    The First Food Stamp Program (FSP) – May 16, 1939-Spring 1943

    The idea for the first FSP is credited to various people, most notably Secretary of Agriculture Henry Wallace and the program’s first Administrator Milo Perkins. The program operated by permitting people on relief to buy orange stamps equal to their normal food expenditures; for every $1 worth of orange stamps purchased, 50 cents worth of blue stamps were received. Orange stamps could be used to buy any food; blue stamps could only be used to buy food determined by the Department to be surplus.

    That reminds me. Originally food stamps were not given out for free. A person paid a discount, depending on income, for a fixed amount of stamps. That was eventually changed on the grounds that some people would have difficulty putting up the money, but that changed it into something much more close to an income supplement.

    Over the course of nearly 4 years, the first FSP reached approximately 20 million people at one time or another in nearly half of the counties in the U.S.–peak participation was 4 million–at a total cost of $262 million.

    It was a much more small scale program.

    The next time it started was May 29, 1961. But there was also thinbgs like giving out surplus cheese in places like West Virginia. I don’t know.

    Sammy Finkelman (b66da2)

  99. Funny how the big news is the LA Clippers are worth $2 Billion to anyone.

    http://www.zerohedge.com/news/2014-05-29/over-thousand-soldiers-killed-ukraine-fighting-escalates-russian-media-reports

    Beezarre.

    gary gulrud (46ca75)

  100. the thugtrash NBA is a *thing* Mr. gulrud

    what can i tell you

    people aren’t very discriminating any more

    this we are assured is progress

    but honest to pete I think if the NBA gives the trashy Steve Ballmers and the trashy Mark Cubans of the world somewhere to go where they don’t annoy decent everyday normal Americans, it’s pulling its weight

    happyfeet (8ce051)

  101. or Medicare, or Medicaid, or free AIDS treatment,

    There wasn’t any AIDS, either. There were other venereal diseases, and there was no pencillin.

    And there was polio. Which actually infected very many people at a subclinical level. Only one in some 200 cases seem to produce paralysis. It was worse when someone got it an older age.

    Doctors used to visit sick peole, and sick people did not visit doctors. That continued until well into the 1960s and even longer.

    or free tranny transformation,

    That was something that Dr. Joseph Mengele was interested in, in Auschwitz.

    http://www.mengele.dk/

    Victims were put into pressure chambers, tested with drugs, castrated, frozen to death. Children were exposed to experimental surgeries performed without anesthesia, transfusions of blood from one to another, isolation endurance, reaction to various stimuli. The doctors made injections with lethal germs, sex change operations, removal of organs and limbs.

    Also mentioned here: http://www.longwood.k12.ny.us/lhs/science/mos/twins/mengele.html

    Twins undergoing his experiments didn’t know what the objectives were. It is known that he had a special pathology lab where he performed autopsies on twins who had died from experiments. It was located next to the crematorium. Mengele’s experiments both physical and psychological; experimental surgeries performed without anesthesia, transfusions of blood from one twin to another, isolation endurance, reaction to various stimuli, injections with lethal germs, sex change operations, the removal of organs and limbs, incestuous impregnations.

    Also here: http://www.angelfire.com/wi2/Lena/mengele.html

    Sammy Finkelman (b66da2)

  102. didn’t president food stamp spend a considerable interval of his formative college years steeping his bad-ass choomchoom self in all things pawkeestawn?

    I think i read it on the internet

    happyfeet (8ce051)

  103. 102. That’s the kind of thing that goes on right at Brandeis’s own campus, gary.

    nk (dbc370)

  104. “daley, sometimes bad internet humor/sarcasm is just bad.”

    Steve57 – I haven’t dissed your humor/sarcasm in a while.

    Clues for what I said were all there for anybody paying attention.

    daleyrocks (bf33e9)

  105. High Dudgeon R Us

    elissa (550033)

  106. 97. The New York Times says that too, only it says it is happening in California. And I recall the winter was cold further east, but not on the West Coast.

    It says also that 1977 was actually the worst drought, or at least water crisis..

    http://www.nytimes.com/2014/02/10/opinion/the-dust-bowl-returns.html?_r=0

    But hasn’t that been blamed on the Endangered Species Act rotecting the fish, and causing the release of water from reservoirs in California.

    Here it says there was a drought in 2012, comparable to the 1950s, but not sas bad as the dust bowl years, and the dust bowl years were exacerated by poor farming practices,

    http://query.nytimes.com/gst/fullpage.html?res=9805E3D71030F93AA35752C0A9659D8B63

    Sammy Finkelman (b66da2)

  107. The UKIP in Britain swept EU ministerial elections portentous of its exit from EU participation.

    Yet Britain is the least of their problems. The much greater shock is the “Séisme” in France, as Le Figaro calls it, where Marine Le Pen’s Front National swept 73 electoral departments, while President Francois Hollande’s socialists were reduced to two.

    Holder wants to fine BNP, essentially the French government, $10 Billion for evading sanctions.

    Hollande’s 75% Millionaires’ tax garnered 40% of expected revenue.

    Le suck.

    gary gulrud (46ca75)

  108. 104. Obama made a trip to Pakistan in 1981.

    This was before the military dictator of Pakistan, Zia, started promoting political Islam.

    Sammy Finkelman (b66da2)

  109. Blondie was still charting in 1981, pretty sure

    happyfeet (8ce051)

  110. In 1971 Pakistan killed 2 Million Bangladeshis in the latter’s battle for independence.

    Sh!t rolls downhill.

    gary gulrud (46ca75)

  111. And Reagan was president in 1981. Apparently a lot of stuff happened in 1981.

    elissa (550033)

  112. 113. Boy George was big about then, ET was playing a couple year runs in theatres, Jimmah was beating off enraged bunnies with canoe paddles, those were the days.

    gary gulrud (46ca75)

  113. 106. …Clues for what I said were all there for anybody paying attention.
    daleyrocks (bf33e9) — 5/29/2014 @ 9:03 pm

    If many people were paying attention, President Tiger Beat wouldn’t have gotten a second term.

    Steve57 (61329d)

  114. 115. Lillian Carter said she’d been better off ‘staying a virgin’.

    I think Mooch would have done better as well.

    gary gulrud (46ca75)

  115. “High Dudgeon R Us”

    elissa – Some of us R bigger victims than others.

    Plus:

    If many people were paying attention, President Tiger Beat wouldn’t have gotten a second term.

    Non Sequiturs R Us

    daleyrocks (bf33e9)

  116. “Jimmah was beating off enraged bunnies with canoe paddles, those were the days.”

    gary – Bert Lance was taking bribes from the AyRabs. Good times!

    daleyrocks (bf33e9)

  117. 112. gary gulrud (46ca75) — 5/29/2014 @ 9:15 pm

    In 1971 Pakistan killed 2 Million Bangladeshis in the latter’s battle for independence.

    I’m not sure about that number. It’s more like 1 million. 10 million took refuge in India. It was actually pure genocide. India intervened.

    Nixon and Kissinger took the wrong side in that war, but I don’t think, Nixon, at least, understood the truth. He had met General Yahya Khan, who ruled Pakistan at the time, and had ousted General Ayub Khan in 1969, whi had ruled since 1958 – must get those names straight. Nixon had thought he was a good guy.

    Sammy Finkelman (b66da2)

  118. Little noted in the BEA economic statistics is the recent upgrade by $500 Billion to Amerikkkan industry by the inclusion of prostitutes and drug dealers, heretofore untallied.

    Good work people.

    gary gulrud (46ca75)

  119. The year 1981 was three years away from 1984.
    But the Orwellian times didn’t really kick in full throttle until 2008.

    Elephant Stone (4149b3)

  120. I think Mooch would have done better as well.

    If you also are referring to if Obama’s hippy-dippy mother had remained a virgin, then, yes, you have a good point there.

    Mark (99b8fd)

  121. When I heard this (on bbc) I thought I was hearing a reporter that didn’t understand numbers. Surely, it was “grew 1% less than expected” or “grew at a rate 1% slower” or something. No, the freaking economy contracted. Wow. I’m sure that the weather had a lot to do with this, but not all of those losses are going to come back in Q2.

    carlitos (e7c734)

  122. so who remembers this gem offered up last month by reuters propaganda slut Lucia Mutikani?

    I do

    Obamacare Just Saved The U.S. Economy From Contraction

    *oopsies*

    happyfeet (8ce051)

  123. ==I would only need to read that book for one thing: The cause , and maybe the timing, of the Oklahoma dust bowl. That’s what the issue is here.==

    43. elissa.

    Righto. That was my point. Read the book, Sammy. Yeah, knowing about “the cause and the timing” would probably have been quite useful before you opined on both. </i.

    I know that what I am saying is not the conventional wisdom.

    I should perhaps be a bit more careful. I think the Great Depression caused some global warming.

    I think that same weather pattern is associated with droughts – I think I read that somewhere – but that's the omitted element in my supposition.

    If you could just face that, like every one of us here, there are many many things you are not an expert on, and therefore should probably stay in the background on about those topics, it really would help make this blog nicer for all.

    My problem is that I think there are only many things, but not many, many, things I am not an expert on?

    I don’t claim to even be an expert, just to know some more facts, on average.

    Sammy Finkelman (b66da2)

  124. carlitos,

    Winter doesn’t cause the economy to shrink. Otherwise, a lot of Scandinavian countries would suffer a shrinking economy every year.
    Every year we have winter in America. Except for when a Republican is President. Or something. Because the Koch Brothers fix it that way. And Karl Rove, too.

    Elephant Stone (6a6f37)

  125. Mr feet wrote:

    so who remembers this gem offered up last month by reuters propaganda slut Lucia Mutikani?

    I do

    Obamacare Just Saved The U.S. Economy From Contraction

    Only a slight change: Obamacare Just Saved The U.S. Economy From Contracting Further.

    Before I finally had to ban him, Perry/Granps2/Observer’s continual response to the actual performance of the 2009 porkulus plan was that yeah, it didn’t hold unemployment down to 8%, as was advertised, but unemployment would have gone way, way, way higher than the 10% it hit were it not for the stimulus.

    That’s the logic of the left: everything they say or do or plan works, and if it doesn’t work quite as well as projected, why that’s because things were worse than anyone realized before their plans were put into action, and they really saved, saved! us from total disaster.

    And make no mistake here: the left really believe that! It’s the perfect response to why what they said would happen didn’t, because it can never be disproved. Without some communication into the alternate quantum universe in which the stimulus plan wasn’t passed, no one can say, with certainty what would have happened, and that’s proof enough for the left; their ideas work!

    The Dana who has heard all of the excuses (3e4784)

  126. carlitos wrote:

    I’m sure that the weather had a lot to do with this, but not all of those losses are going to come back in Q2.

    From The Wall Street Journal:

    Many economists blame an unusually cold weather for the first quarter’s decline, as storms and chilly temperatures kept shoppers indoors, transportation hubs closed and construction sites shuttered. But economic activity since March seems to have picked up. Macroeconomic Advisers before Thursday was forecasting a 3.8% growth rate for the second quarter this year. That would put GDP growth for the first half of 2014 well into positive territory, diminishing any concerns of a recession right now.

    Of course, the economists the Journal had surveyed had predicted that the revised first quarter numbers would show a decline of 0.6%, when it came in at 1.0%. Doesn’t sound like much? That’s an error of 66.6%!

    And that’s one of the reasons I’ve saidshameless blog plug alert! — that relying on the projections of economists for what proposed policies will do is a pretty chancy thing, when you have professional economists who are that much off not on projections for the future but measurements concerning what has already happened.

    But, not to worry: if the economy doesn’t come roaring back in the second quarter, it’ll still be George Bush’s fault!

    The amateur economist Dana (3e4784)

  127. interestingly though Dana, Lucia the propaganda ho also asserts that going forward the obamacares aren’t likely to contribute much to economic growth

    Healthcare spending could rise again in the second quarter, but probably not at the first-quarter’s rapid pace.

    [...]

    “That kind of implies that there may be at least a little bit more in terms of growth in health consumption from essentially those new benefits that have been provided,” said Phillips. “With that said it also implies that we have probably seen a decent amount of it already.”

    this was a one-off cause of all the emergency room foodstampers that were curious what the inside of a real doctor’s office looks like

    now that they know it’s not all that exciting they’ll probably just go back to loitering around emergency rooms for the free air conditioning

    lil pink houses for you and me

    happyfeet (8ce051)

  128. Mr feet, one of the underlying assumptions of Obaminablecare was that the poor, now grateful that they had (subsidized) health insurance, would start to behave like the middle class when it comes to health care, going to the doctor regularly, and have problems caught earlier and less expensively. The upper-middle-class/upper-class elites who have been pushing this seem wholly unable to recognize that the poor are not middle-class Americans who just don’t have much money, but really do behave differently. If you’re poor, you don’t just take a day off work to go to the doctor, even if you do have taxpayer-subsidized health insurance, because you can’t afford to miss the day of work!

    The amateur psychologist Dana (3e4784)

  129. Actually, the economy grew quite rapidly from the spring of 1933 to the end of 1936. There was a contraction from the beginning of 1937 to the middle of 1938 followed by another period of rapid growth. Roosevelt made a number of policy mistakes and some of his actions had quite unfortunate downstream consequences, but the administration made some correct choices at the beginning which were quite tonic.

    During the period running from the summer of 1929 to the summer of 1932, the country had experienced a catastrophic economic implosion. The decline in real income per capita was on the order of 30%. From the summer of 1932 to the spring of 1933 was an anxious period which included both small quanta of growth and contraction and a new wave of bank failures. We had rapid growth after that. The abiding problem during the 1930s was the condition of the private-sector labor market, which did not recover properly until the war. The Administration did make some policy errors which made this worse than it otherwise would have been, but labor markets can be slow to recover even in liberalizing policy environments (see Britain, 1983-97).

    Art Deco (ee8de5)

  130. Just to point out, the current period is similar to the 1930s in that it commenced with a banking crisis. The dimensions of the ensuing economic contraction and the injury to the labor market have been far smaller. The decline in the rate at which goods and services were being produced in the economy from the summer of 2008 to the spring of 2009 was on the order of 5%, not the 27% registered during the period running from mid 1929 to mid 1932.

    Art Deco (ee8de5)

  131. Sometimes I observe a fair amount of shrinkage in the cold, but that’s just me. YMMV.

    daleyrocks (bf33e9)

  132. Dear America,

    I’m just not all that into you.

    Love,
    Signed,

    Barack

    Elephant Stone (6a6f37)

  133. Dear Obama voters,

    With the release of the revised GDP numbers for the first quarter, I guess now we’re all part of “the 1%,” huh ?

    Signed,

    Mitt Romney

    Elephant Stone (6a6f37)

  134. 131. This is absolutely correct.

    The 1937 contraction would have been previously been called a “depression” – remember it was the “Great” depression, not just the “Depression” – but they didn’t wnat to use that word, and so they invented the word “recession”

    To add to this, by 1938, things were back to where they had been in 1929 and 1936. (these are whole calendar year statistics)

    After that recovery continued, and for the year 1940 consumption expenditures and disposable incomes were both well above their 1929 levels.

    This was before any World War II spending had a chance to kick in, but close enough so somebody could make the argument that World War II ended the depression.

    Daleyrocks confused who was making that argument.

    Sammy Finkelman (d22d64)

  135. The one part of the New Deal that might have made the most difference was bank deposit insurance.

    Sammy Finkelman (d22d64)

  136. 52. Most Keynesians actually only pay attention to the deficit financing for recessions part.

    Sammy Finkelman (d22d64)

  137. Steve57 to daleyrocks (61329d) — 5/29/2014 @ 6:13 pm

    Seriously, how did you get that idea that it was the Austrians who promote this Keynesian drivel?

    The Austrians are the “GOOD GUYS”, or the ones who are right on things, and to Daleyrocks the idea that World War II ended the Great Depression seemed right because the alternative seemed to be that it was the New Deal! (but arming for World War II was not an economic policy choice by FDR.)

    Sammy Finkelman (d22d64)

  138. Mr Finkelman wrote:

    52. Most Keynesians actually only pay attention to the deficit financing for recessions part.

    Yup, that’s right, because that’s the easy part. In theory, Keynesian economics could work, but only if you take the whole package. Trouble is, we’ve been doing only half of it, in good times and bad, to the point I believe it couldn’t work again, not in the United States.

    The Dana who pays attention to the whole thing! (3e4784)

  139. 60. Steve57 (61329d) — 5/29/2014 @ 5:35 pm

    Krugman is the loon who thinks “war is good.” As a matter of fact, people like Krugman think that you didn’t even need the war. You could have just pushed airplanes and tanks off of ships, then sink the ships, and keep building more, and end up with prosperity. The Austrians think people like Krugman are the loons. </i.

    Thats it, but that makes The Forgotten Man: A New History of the Great Depression
    by Amity Shlaes into a book that incoporates a loony thesis.

    And she’s been all over conservative talk radio!

    This breezy narrative comes from the pen of a veteran journalist and economics reporter. Rather than telling a new story, she tells an old one (scarcely lacking for historians) in a fresh way. Shlaes brings to the tale an emphasis on economic realities and consequences, especially when seen from the perspective of monetarist theory, and a focus on particular individuals and events, both celebrated and forgotten (at least relatively so). Thus the spotlight plays not only on Andrew Mellon, Wendell Wilkie and Rexford Tugwell but also on Father Divine and the Schechter brothers—kosher butcher wholesalers prosecuted by the federal National Recovery Administration for selling “sick chickens.” As befits a former writer for the Wall Street Journal, Shlaes is sensitive to the dangers of government intervention in the economy—but also to the danger of the government’s not intervening. In her telling, policymakers of the 1920s weren’t so incompetent as they’re often made out to be—everyone in the 1930s was floundering and all made errors— and WWII, not the New Deal, ended the Depression. This is plausible history, if not authoritative, novel or deeply analytical. It’s also a thoughtful, even-tempered corrective to too often unbalanced celebrations of FDR and his administration’s pathbreaking policies. 16 pages of b&w photos.

    Sammy Finkelman (d22d64)

  140. There is a good ppoint maybe about velocity, except I would say there’s also the question of closed circulation. If too many times money goes to one place. Taxation is like that, and amybe anything almost everybody buys.

    Sammy Finkelman (d22d64)

  141. “Daleyrocks confused who was making that argument.”

    Sammy – Don’t you dare speak for me.

    daleyrocks (bf33e9)

  142. 130. The amateur psychologist Dana (3e4784) — 5/30/2014 @ 9:27 am

    Mr feet, one of the underlying assumptions of Obaminablecare was that the poor, now grateful that they had (subsidized) health insurance, would start to behave like the middle class when it comes to health care, going to the doctor regularly, and have problems caught earlier and less expensively.

    Except, anyway, that’s not a big deal. A few things may be. Not smoking, maybe, vaccinations possibly, preventing soem cancers – but not overdoing it, becasue you’ll detect a lot of cancers that aren’t going to do anything.

    What is needed is an ability to see doctors in an emergency

    Sammy Finkelman (d22d64)

  143. “Daleyrocks confused who was making that argument.”

    Sammy – No I did not. I said what I said deliberately. You have proven yourself to be a functional illiterate on economic matters. I feel mostly the same way about the purveyors of the Austrian “School” of Economics. Ivory tower theory is great, that’s what we get with Obama. The real world is a better operating environment and that’s where the Austrian Loons fall down and blanket statements like war does not make economic sense and Bastiat’s broken window parable are stupid.

    People need to look at opportunity costs, excess capacity and other factors to determine whether war was a benefit or a negative for an economy. GDP in the US did not reach its 1929 levels in the until 1941 for a wide variety of reasons, a large number due to heavy handed government intervention similar to what we are seeing today from Obama. There are, however, few absolute rules in economic theory which can stand debate and the Austrian Loons do not possess them.

    daleyrocks (bf33e9)

  144. The one part of the New Deal that might have made the most difference was bank deposit insurance.

    Devaluation of the currency in 1933, the replacement of the classical gold standard, and open market operations (which began tentatively in the spring of 1932). The deposit insurance may have inhibited future panics. Also, you had the work-outs sponsored by HOLC over the period running from 1933 to 1939.

    Most troublesome policies: sponsorship of cartels across all commercial and industrial sectors (invalidated by the Supreme Court in 1935), sponsorship of cartels in Agriculture (left in place), addition of rigidities to the labor market through high minimum wages and promotion of unions.

    Art Deco (ee8de5)

  145. GDP in the US did not reach its 1929 levels in the until 1941 for a wide variety of reasons,

    No, real per capita product exceeded 1929 levels by 1939 (and had come quite close by the beginning of 1937). It reached the value you might have expected from long-term trends by 1941.

    Art Deco (ee8de5)

  146. Didn’t open market operations start actually in the 1920s, when it was discovered accidently?

    Of course the quesrtion is whether the fed actually did anything, or did the right ting \or the wrong thing.

    They had actually raised interest rates in 1928, if I remember right..

    Sammy Finkelman (d22d64)

  147. Dear Barack,

    Shinsecki and Carney resigned today.
    Does that give you any ideas ?
    Welllll ?

    Love,
    Signed,

    America

    Elephant Stone (6a6f37)

  148. daleyrocks – I didn’t study what you wrote @25, (and also @51 I see) and disentangle it, but relied on what Steve57 said @60. I did see 88 and 106 but didn’t pick up on it – the commenbst just seemed to make no sense to me.

    Sammy Finkelman (d22d64)

  149. Elephant Stone (6a6f37) — 5/30/2014 @ 12:14 pm

    Shinsecki and Carney resigned today

    This is kind of like Haldeman and Ehrlichman resigning in 1973.

    Sammy Finkelman (d22d64)

  150. War can’t be a benefit to an economy. Changes in fiscal or monetary policy can be.

    I don’t see how military spending adds to velocity.

    It might cause governments to ignore some bad policy rules.

    Sammy Finkelman (d22d64)

  151. “daleyrocks – I didn’t study what you wrote @25, (and also @51 I see) and disentangle it, but relied on what Steve57 said @60. I did see 88 and 106 but didn’t pick up on it – the commenbst just seemed to make no sense to me.”

    Sammy – Being oblivious to what people say or mean is one of your faults Sammy, but you are also functionally illiterate on the subject of economics. Please regale us again with your inventory control theory of the Great Depression, the Lump of Labor Theory, and how an open borders immigration policy will cause wages to rise.

    daleyrocks (bf33e9)

  152. 153. daleyrocks (bf33e9) — 5/30/2014 @ 12:22 pm

    Being oblivious to what people say or mean is one of your faults Sammy,

    I’m not alone in that I think – that is, when there’s something I don’t understand, to treat it as if it hadn’t been said. I see that happens with translations.

    but you are also functionally illiterate on the subject of economics. Please regale us again with your inventory control theory of the Great Depression, the Lump of Labor Theory, and how an open borders immigration policy will cause wages to rise

    The inventory control theory is a theory of what it takes for prices to drop in recessions, and I think I said the Great Depression was the last time prices droopped in a recession and took several years and the Depression for that to happen, and it hasn’t happened since, because inventory control has been faily good since at least 1920.

    The Lump Labor theory is like the paravble of the broken window – a theory that other peoplke would
    have that isn’t true.

    How an open borders immigration policy causes wages to rise because people have greater choices of jobs, and don’t have to spend as much time looking for a good job in a bigger econony. There are many jobs people can do.

    Sammy Finkelman (d22d64)

  153. Didn’t open market operations start actually in the 1920s, when it was discovered accidently?

    There may have been spot operations. As a systemic response to the Depression, I believe they started in the Spring of 1932 on an experimental basis; I believe they had not been attempted earlier because under the prevailing theories at the time, the Fed believed that the only effect would be to stimulate cross-border gold flows. I’m likely misinformed, though. The economy did finally stabilize (after a fashion) in the summer of 1932. The work of the Reconstruction Finance Corporation may have helped as well. I believe they began operation in July 1932.

    Art Deco (ee8de5)

  154. and took several years and the Depression for that to happen, and it hasn’t happened since, because inventory control has been faily good since at least 1920.

    No, they began falling right away (or within a few months) at a rate of 9% per annum. The deflation was more rapid during the previous contraction (1920-21), but you still had rapid deflation. That would be consumer prices; I think the response of nominal wages may have been delayed.

    Art Deco (ee8de5)

  155. I think we should all just admit that the Koch Brothers caused the Great Depression. And that Mitt Romney caused the Dust Bowl.

    Elephant Stone (6a6f37)

  156. Never trust a ‘Dry’.

    askeptic (8ecc78)

  157. “War can’t be a benefit to an economy. Changes in fiscal or monetary policy can be.”

    Chicken or egg?

    No Mensa picnic for you.

    daleyrocks (bf33e9)

  158. the commenbst just seemed to make no sense to me.

    now you know how the rest of us feel when we see you’ve deposited something in a thread.

    redc1c4 (abd49e)

  159. “War can’t be a benefit to an economy. Changes in fiscal or monetary policy can be.”

    daleyrocks (bf33e9) — 5/30/2014 @ 2:07 pm

    Chicken or egg?

    You ca have changes in fiscal or monetary policy without war (as per Paul Krugman’s stimulus) and you can have war, or a small one, without big changes in fiscal or monetary policy – and I think fiscal policy really makes no difference. If it does, tax cuts are probably better than spending increases.

    Sammy Finkelman (b66da2)

  160. “and [it] took several years and the Depression for that [prices to fall in an economic decline] to happen, and it hasn’t happened since, because inventory control has been faily good since at least 1920.

    Art Deco (ee8de5) — 5/30/2014 @ 1:02 pm

    No, they began falling right away (or within a few months) at a rate of 9% per annum.

    Probably a little.

    What I have here is the Wholesale Price Index (one figure per calendar year) 1947-1949 = 100/

    1928: 62.9
    1929: 61.9
    1930: 56.1
    1931: 47.4
    1932: 42.1
    1933: 42.8
    1934: 48.7
    1935: 52.0
    1936: 52.5
    1937: 56.1
    1938: 51.1
    1939: 50.1
    1940: 51.1

    Prices double by about 1948, and it was considered a serious problem, and it was the main thing the “Do nothing Congress” was doing nothing about, and then suddenly, in October 1948, the inflation…vanished! Dewey never knew what hit him.

    Inventory control had broken down, but because of an expansion not a contraction. The curve of increased production overtook the curve of incresed demand. That’s waht I say. Mosy economists never figured it out and just ignored it. Milton Friedman said very low interets rates was tight money.

    But in the Great Depression, yes, there ws an early drop, but the drop was not regular, the biggest drop happening around 1930 to 1931 (there were massive efforts to keep prices up after that) and the total drop being to about alevel 68% of what it had been.

    There was a much bigger, sharper drop in the year 1920, which wiped out most of the world war I era inflation (pries had more than doubled) but prices didn’t gte back to pre-1916 levels until 1932.

    The deflation was more rapid during the previous contraction (1920-21), but you still had rapid deflation. That would be consumer prices; I think the response of nominal wages may have been delayed.

    Wholesale prices collapsed in May 1920, and cosumer prices around December. Among the places of business that went broke was Harry S Truman’s haberdashery.

    Sammy Finkelman (b66da2)

  161. My statistics would also show a price drop as a result of the 1937 recession but by 1957 this no longer happened in economic downturns.

    I think the reason is, that prices only drop when there is a breakdown in inventory control.

    Sammy Finkelman (b66da2)

  162. carlitos,

    Winter doesn’t cause the economy to shrink. Otherwise, a lot of Scandinavian countries would suffer a shrinking economy every year.
    Every year we have winter in America. Except for when a Republican is President. Or something. Because the Koch Brothers fix it that way. And Karl Rove, too.

    Elephant Stone (6a6f37) — 5/30/2014 @ 8:34 am

    I didn’t say “winter,” I said “the weather.” From December to March was insane, ridiculous. Stuff got stuck, airports were closed, trucks were frozen 1000 miles from where goods were needed. Maybe you work in a job where you didn’t observe the effects, but they were intense. Not to mention the sheer lack of disposal income spend on dining, entertainment, travel, etc. I had 2 flights in January cancelled and each of those cost the economy $10,000+. You’re just wrong about this.

    carlitos (e7c734)

  163. daley,

    I went to a Mensa thing once. Booooooring.

    carlitos (e7c734)

  164. winter didn’t happen in Los Angeles at all this year

    we just kinda had to take everyone’s word for it

    happyfeet (8ce051)

  165. 163- The “Depression within a Depression” (1937-1938) is generally credited(?) to FDR’s War on Wealth, particularly on undistributed profits, and other manifestations of the Capital Strike that occurred when everyone who still had money sat on it until they could get some idea of just what the administration was going to do. Not dissimilar to what occurred in 2009-2011, and continues today with companies leaving vast amounts of profits overseas because they would rather reinvest them there than repatriate them into the highest corporate tax rate in the world. For a more complete explanation read Amity Shlaes’ “The Forgotten Man”.

    askeptic (8ecc78)

  166. US consumer spending fell slightly in April after March’s strong surge, the Commerce Department reported Friday, while incomes kept rising.

    ohnoes

    my goodness this economy is just not in good shape

    happyfeet (8ce051)

  167. So, what about the BMX? Well, sorry guys, but it’s a kids’ bike. It was designed to appeal to the 10 to 13 age bracket. It is proportioned to the smaller body. The G Braves right hander worked 3.2 innings, giving up ten hits and nine earned runs, with four strikeouts and no walks. Adam Russell came in from the bullpen and did not allow any more runs in the fourth. Russell worked 1.1 scoreless innings and allowed one hit. As Asian economies mature, its growing middle classes will begin to enjoy a

    nike free run (b7b23e)

  168. Mr Finkelman wrote:

    Mr feet, one of the underlying assumptions of Obaminablecare was that the poor, now grateful that they had (subsidized) health insurance, would start to behave like the middle class when it comes to health care, going to the doctor regularly, and have problems caught earlier and less expensively.

    Except, anyway, that’s not a big deal. A few things may be. Not smoking, maybe, vaccinations possibly, preventing soem cancers – but not overdoing it, becasue you’ll detect a lot of cancers that aren’t going to do anything.

    What is needed is an ability to see doctors in an emergency

    As in: when they go to the emergency room, emergency rooms which cannot turn them away? Why did we need this huge, economy changing, job killing bill to provide access to what they they already had?

    The realistic Dana (af9ec3)

  169. well, at least retail sales are up, right?

    yeah, sure they are.

    redc1c4 (abd49e)

  170. Mr Finkelman stunned me:

    War can’t be a benefit to an economy. Changes in fiscal or monetary policy can be.

    I don’t see how military spending adds to velocity.

    You’re joking, right?

    War requires increased production of military hardware, materials which will be rapidly expended, and have to be replaced. Unless your economy was already producing at maximum capacity, and had no room for expansion, production will be increased to meet the increased demand.

    The World War II argument that we had domestic shortages of things, an argument which notes that some civilian production was, in effect, crowded out, simply points out that we had reached maximum production. We had men sent off to war, and the total military and civilian workforce expanded by bringing women into manufacturing production; we were employing millions more people, building things which wouldn’t have been built otherwise.

    Note the increased climb in GDP, beginning in 1940, on this chart.

    The baffled Dana (3e4784)


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