FDR and his policies prolonged the Great Depression by 7 years

It is now very clear that Obama and his policies have not and will not end high national unemployent as he promised they woud do when he was elected as our president in 2008.

Are Obama and the Democrats in the Senate now making the very same mistakes the Democrats made when they enacted laws that prolonged the Great Depression by 7 years? This article about FDR and his policies was very good!

 

That's fascinating considering that the Great Depression started in 1929 and ended in 1933.

Anyone want to guess when FDR was inaugurated?

 

You are blowing smoke.

What makes you think the depression ended in 1933?

I have news for you.

It didn't!

Check this out.

 

Year - % chg real GDP
1930 -8.6%
1931 -6.5%
1932 -13.1%
1933 -1.3% <-FDR takes office, implements "New Deal"
1934 +10.9%
1935 +8.9%
1936 +13.1%
1937 +5.1%
1938 -3.4%
1939 +8.1%
1940 +8.8%

I don't see any prolonged recession after FDR takes office in 1933.

 

& Zero wants a Thousand Years Reich ...

 

The Great Depression began after the Stock Market crash in 1929, it steadily deepened thru the early and mid 30's. Very high levels of unemployment existed up until 1938 / 39, and the end of the Depression era did not occur until later 1939.

Although FDR's policies stopped the panic and lawlessness which was gripping the nation in the 1932/33 period, his policies also created uncertainty in the capital markets and lengthened the Depression. Uncertainty always creates higher unemployment. Obama's policies are causing the same problem now.

 

Check this out. From your own source.

 

Unemployment doesn't just disappear overnight. I'm not sure why you think it would. It takes time and the steady creation of jobs resulting from demand.

Uncertainty doesn't create higher unemployment. That is a bunch of bull(*)(*)(*)(*). You know what creates high unemployment?

1) Lack of demand
2) High wealth disparity
3) Low monetary fluidity (individuals or companies hoarding cash)
4) Stagnant wages for low and middle class
5) Severe dips in government spending.

FDR stopped the freefall of the GNP. He started putting the top tax rate back to where it should be and the recovery began.

One mistake that FDR did make was when he cut federal spending in 1937 which plunged the US back into a recession. Fortunately (in PURELY economic terms) World War II hits and US deficit spending reaches new highs and the top tax rate is 91%. You read that right, 91%. Our economy continued racing to the top.

 

it would appear to me that your graph proves the point made by the OP and by myself about the length of the Great Depression. anyone who doesn't understand the relationship between lack of investment and higher unemployment didn't pay attention in Econ 101, and anyone who doesn't understand the relationship between underinvestment and uncertainty is not an investor nor do they hope to be.

as a side note, WWII compelled the release of pent up capital, investors were delighted to invest and create jobs again when the hardware and infrastructure of war were being created. no uncertainty there, the nation needed goods and services to win the war. unions were brought under control, the War and Navy depts compelled Roosevelt's alphabet soup to get the hades out of the way - so the nation boomed.

 

Year - % chg real GDP
1930 -8.6%
1931 -6.5%
1932 -13.1%
1933 -1.3% <-FDR takes office, implements "New Deal"
1934 +10.9%
1935 +8.9%
1936 +13.1%
1937 +5.1%
1938 -3.4%
1939 +8.1%
1940 +8.8%

Source: BEA.gov

While it took years to fully recover from the GD, the economy turned around and started growing robustly when FDR took office and began implementing New Deal programs.

Coincidence? Could be.

 

THIS is simple economics:
True unemployment (not talking about the rate of increase or decrease in the number of unemployment compensation applications) doesn't fall when there is a lack of growth.

Now study the chart for that "aha!" moment of clarity and ruminate on how a dramatically falling unemployment rate is coupled with a huge increase in year-to-year GDP growth.

The next point to consider is that it takes years for the antecedent conditions to an economic recession/depression to build up and recovery does not happen overnight.

 

I wonder if FDR ran a summer of recovery campaign back in 1933? Anyway, it took a decade to return to full employment.

 

When your GDP falls 30% real and unemployment shoots up to 25% as your economy destroys itself in a recessionary death spiral, that is the probable result.

That is why I am thankful that Paulson and Bush and Geithner and Bernanke and the Dems took aggressive and decisive action to stop it.

 

You are very correct, jhffmn.

FDR could have returned to full employment a lot sooner if he were not so wrong-headed!

Instead of keeping wages high like FDR did, the Germans lowered wages, put more people back to work and ended their recession in two short years.

By ending the recession early, Germany was able to invest and build up its military machine in the years before WW2. Has the recession in Germany lasted longer, WW2 may have been avoided.

 

that is an excellent analysis of the German economy 1932-1935.

 

No nation in Europe got out of the GD on their own. All had help by getting ready for WWII. We didn't because of the isolanists dominating Congress. If we had, the GD would have been over with sooner.

 

German unemployment:

September 1928 650,000 unemployed

September 1929 1,320,000 unemployed

September 1930 3,000,000 unemployed

September 1931 4,350,000 unemployed

September 1932 5,102,000 unemployed

January 1933 6,100,000 unemployed

http://www.historylearningsite.co.uk/weimar_depression_1929.htm
That's a lot more than 2 years.

 

better yet, look at the Dow Jones averages 1930 -1940, and you can have an" aha" moment as you see how reluctant investment capitalists were to put their $$$ back into circulation.

uncertainty leads to underinvestment which leads to unemployment.

FDR proved it for all time.

 

FDR didn't take office until 1933.

After losing 2/3 of its value 1929-32, The stock market more than doubled from 1932 to 1940.

So much for that theory.

 

In all due respect, you are wrong.

Check this out.

Roosevelt's economic policies caused the depression to last seven years longer than it should have.

By the way, how do you explain the fact that the economic depression in Germany was much shorter than ours and only lasted from 1932-1935?

Our economic depression in the U.S. was not over until the early 1940s.

 

Additional perspective on the German "economic miracle":

Hitler’s first action was to set up a Reicharbeitsdienst or RAD. This was a National Labour Service organisation that gave men jobs in public work programs. This included building schools, hospitals and a network of motorways, the Autobahns. Members of the RAD had to live in special camps and wear military uniform. They were given a bed and free meals but got only pocket money as wages. However for many like in the RAD was better than life with no work at all.

Many Jews and women were forced out of their jobs and this made way for unemployed German men to take their place. However the women and Jews who had lost their jobs were not counted on the unemployment register. ... In March 1935 he started compulsory military service for young men and set up an air force. The army went from 100,000 in 1933, to 1.4 million in 1939.

http://www.thegreatdepression.co.uk/did-hitler-end-german-unemployment/

 

WW2 pulled us out of the recession all FDR did was waste money, its common knowledge and the great depression ended in 1940 not 1933.

 

So the problem with FDR is that he didn't give the Govt enough tax increases and stimulus, like WWII did.

Conservatives should take note.

 

what?

what ended the depression was the gov drafting everyone and giving them all jobs., and the military industrial complex.

 

No not really. You see, Roosevelt started to reduce the amount of help public aid. He thought the economy was fine. It wasn't.

In 1937, Roosevelt decided to balance the budget and drastically cut deficit spending. Nearly simultaneously, the Federal Reserve raised reserve ratio requirements for member banks, leading to a contraction of the monetary base. The results were tragic as the economy slumped back into recession. The economy was not strong enough to support itself, and tight fiscal and monetary policy allowed a fickle market to waver in the face of what was otherwise a stable period of recovery
http://www.economicthought.net/2010/01/roosevelts-recession-of-1937/

No nation recovered from the GD on their own. All required the military buildup of WWII. Ours didn't happen because of the isolanisits. It took a lot of work from Roosevelt to get the military buildup needed to get out of the GD.
First off, Germany was the worest nation hit by the GD. No arguing. 4 million marks for 1 US dollar. In fact, their currency was used as confetti during a New Years eve party. Germany recovered from the military buildup it wasn't supposed to be doing.