Why can't capitalism stop its excesses, greed, and other damaging characteristics?

If GDP was lower in 1938 then in 1928 is because we were in the great depression.

 

Cool the way a liberal needs to rewrite history when the fact is the great depression was the Great Depression.

 

The great depression didn’t and one Roosevelt took office since his socialist measures prolonged it for another 12 years. In fact the great depression and when he thankful died

 

Because the facts contradict you. I already posted the statistics proving it.

 

REAL GDP was HIGHER in 1938 than 1928, as I already proved to you. NOMINAL GDP was only lower because the deflation of 1929-1932 had reduced nominal prices so much, and they were still depressed. I already explained that to you. You just refuse to know all facts that prove you wrong.

 

Everyone reading this knows I am the one citing ACTUAL HISTORICAL STATISTICS that prove me right and you wrong, while you spew absurd, ahistorical nonsense like "Hoover and FDR followed the same policies.".

 

<yawn> During the 12 years Roosevelt was president, real GDP nearly TRIPLED, as I already proved to you, which was the greatest economic boom the USA has ever known. You claim that boom was the prolongation of a depression. And then you claim I am the one rewriting history!

Don't you ever get tired of being comprehensively humiliated?

 

first column is GDP so you can see why they called FDR's reign the Great Depression.

Gross
domestic
product Personal
consumption
expenditures Gross private
domestic
investment Exports Imports Government
consumption
expenditures
and gross
investment
1929 103.6 77.4 16.5 5.9 5.6 9.4
1930 91.2 70.1 10.8 4.4 4.1 10.0
1931 76.5 60.7 5.9 2.9 2.9 9.9
1932 58.7 48.7 1.3 2.0 1.9 8.7
1933 56.4 45.9 1.7 2.0 1.9 8.7
1934 66.0 51.5 3.7 2.6 2.2 10.5
1935 73.3 55.9 6.7 2.8 3.0 10.9
1936 83.8 62.2 8.6 3.0 3.2 13.1
1937 91.9 66.8 12.2 4.0 4.0 12.8
1938 86.1 64.3 7.1 3.8 2.8 13.8
1939 92.2 67.2 9.3 4.0 3.1 14.8
1940 101.4 71.3 13.6 4.9 3.4 15.0
1941 126.7 81.1 18.1 5.5 4.4 26.5
1942 161.9 89.0 10.4 4.4 4.6 62.7
1943 198.6 99.9 6.1 4.0 6.3 94.8
1944 219.8 108.7 7.8 4.9 6.9 105.3
1945 223.1 120.0 10.8 6.8 7.5 93.0
1946 222.3 144.3 31.1 14.2 7.0 39.6
1947 244.2 162.0 35.0 18.7 7.9 36.4
1948 269.2 175.0 48.1 15.5 10.1 40.6
1949 267.3 178.5 36.9 14.5 9.2 46.7
1950 293.8 192.2 54.1 12.4 11.6 46.8
1951 339.3 208.5 60.2 17.1 14.6 68.1
1952 358.3 219.5 54.0 16.5 15.3 83.6
1953 379.4 233.1 56.4 15.3 16.0 90.6
1954 380.4 240.0 53.8 15.8 15.4 86.2
1955 414.8 258.8 69.0 17.7 17.2 86.5
1956 437.5 271.7 72.0 21.3 18.9 91.4
1957 461.1 286.9 70.5 24.0 19.9 99.7
1958 467.2 296.2 64.5 20.6 20.0 106.0
1959 506.6 317.6 78.5 22.7 22.3 110.0
1960 526.4 331.7 78.9 27.0 22.8 111.6
1961 544.7 342.1 78.2 27.6 22.7 119.5
1962 585.6 363.3 88.1 29.1 25.0 130.1
1963 617.7 382.7 93.8 31.1 26.1 136.4
1964 663.6 411.4 102.1 35.0 28.1 143.2
1965 719.1 443.8 118.2 37.1 31.5 151.5
1966 787.8 480.9 131.3 40.9 37.1 171.8
1967 832.6 507.8 128.6 43.5 39.9 192.7
1968 910.0 558.0 141.2 47.9 46.6 209.4
1969 984.6 605.2 156.4 51.9 50.5 221.5
1970 1038.5 648.5 152.4 59.7 55.8 233.8
1971 1127.1 701.9 178.2 63.0 62.3 246.5
1972 1238.3 770.6 207.6 70.8 74.2 263.5
1973 1382.7 852.4 244.5 95.3 91.2 281.7
1974 1500.0 933.4 249.4 126.7 127.5 317.9
1975 1638.3 1034.4 230.2 138.7 122.7 357.7
1976 1825.3 1151.9 292.0 149.5 151.1 383.0
1977 2030.9 1278.6 361.3 159.4 182.4 414.1
1978 2294.7 1428.5 438.0 186.9 212.3 453.6
1979 2563.3 1592.2 492.9 230.1 252.7 500.8
1980 2789.5 1757.1 479.3 280.8 293.8 566.2
1981 3128.4 1941.1 572.4 305.2 317.8 627.5
1982 3255.0 2077.3 517.2 283.2 303.2 680.5
1983 3536.7 2290.6 564.3 277.0 328.6 733.5
1984 3933.2 2503.3 735.6 302.4 405.1 797.0
1985 4220.3 2720.3 736.2 302.0 417.2 879.0
1986 4462.8 2899.7 746.5 320.5 453.3 949.3
1987 4739.5 3100.2 785.0 363.9 509.1 999.5
1988 5103.8 3353.6 821.6 444.1 554.5 1039.0
1989 5484.4 3598.5 874.9 503.3 591.5 1099.1
1990 5803.1 3839.9 861.0 552.4 630.3 1180.2
1991 5995.9 3986.1 802.9 596.8 624.3 1234.4
1992 6337.7 4235.3 864.8 635.3 668.6 1271.0
1993 6657.4 4477.9 953.4 655.8 720.9 1291.2
1994 7072.2 4743.3 1097.1 720.9 814.5 1325.5
1995 7397.7 4975.8 1144.0 812.2 903.6 1369.2
1996 7816.9 5256.8 1240.3 868.6 964.8 1416.0
1997 8304.3 5547.4 1389.8 955.3 1056.9 1468.7
1998 8747.0 5879.5 1509.1 955.9 1115.9 1518.3
1999 9268.4 6282.5 1625.7 991.2 1251.7 1620.8
2000 9817.0 6739.4 1735.5 1096.3 1475.8 1721.6
2001 10128.0 7055.0 1614.3 1032.8 1399.8 1825.6
2002 10469.6 7350.7 1582.1 1005.9 1430.3 1961.1
2003 10971.2 7709.9 1670.4 1045.6 1546.5 2091.9
2004 11734.3 8214.3 1928.1 1173.8 1797.8 2215.9

 

http://www.econlib.org/library/Enc/HooversEconomicPolicies.html

Hoover extended the size and scope of the federal government in six major areas: (1) federal spending, (2) agriculture, (3) wage policy, (4) immigration, (5) international trade, and (6) tax policy.

Consider federal government spending. (See Fiscal Policy.) Federal spending in the 1929 budget that Hoover inherited was $3.1 billion. He increased spending to $3.3 billion in 1930, $3.6 billion in 1931, and $4.7 billion and $4.6 billion in 1932 and 1933, respectively, a 48% increase over his four years. Because this was a period of deflation, the real increase in government spending was even larger: The real size of government spending in 1933 was almost double that of 1929.5 The budget deficits of 1931 and 1932 were 52.5% and 43.3% of total federal expenditures. No year between 1933 and 1941 under Roosevelt had a deficit that large.6 In short, Hoover was no defender of “austerity” and “budget cutting.”

Shortly after the stock market crash in October 1929, Hoover extended federal control over agriculture by expanding the reach of the Federal Farm Board (FFB), which had been created a few months earlier.7 The idea behind the FFB was to make government-funded loans to farm cooperatives and create “stabilization corporations” to keep farm prices up and deal with surpluses. In other words, it was a cartel plan. That fall, Hoover pushed the FFB into full action, lending to farmers all over the country and otherwise subsidizing farming in an attempt to keep prices up. The plan failed miserably, as subsidies encouraged farmers to grow more, exacerbating surpluses and eventually driving prices way down. As more farms faced dire circumstances, Hoover proposed the further anti-market step of paying farmers not to grow.

On wages, Hoover revived the business-government conferences of his time at the Department of Commerce by summoning major business leaders to the White House several times that fall. He asked them to pledge not to reduce wages in the face of rising unemployment. Hoover believed, as did a number of intellectuals at the time, that high wages caused prosperity, even though the true causation is from capital accumulation to increased labor productivity to higher wages. He argued that if major firms cut wages, workers would not have the purchasing power they needed to buy the goods being produced. As most depressions involve falling prices, cutting wages to match falling prices would have kept purchasing power constant. What Hoover wanted amounted to an increase in real wages, as constant nominal wages would be able to purchase more goods at falling prices. Presumably out of fear of the White House or, perhaps, because it would keep the unions quiet, industrial leaders agreed to this proposal. The result was rapidly escalating unemployment, as firms quickly realized that they could not continue to employ as many workers when their output prices were falling and labor costs were constant.8

Of all of the government failures of the Hoover presidency—excluding the actions of the Federal Reserve between 1929 and 1932, over which he had little to no influence—his attempt to maintain wages was the most damaging. Had he truly believed in laissez-faire, Hoover would not have intervened in the private sector that way. Hoover’s high-wage policy was a clear example of his lack of confidence in the corrective forces of the market and his willingness to use governmental power to fight the depression.

Later in his presidency, Hoover did more than just jawbone to keep wages up. He signed two pieces of labor legislation that dramatically increased the role of government in propping up wages and giving monopoly protection to unions. In 1931, he signed the Davis-Bacon Act, which mandated that all federally funded or assisted construction projects pay the “prevailing wage” (i.e., the above market-clearing union wage). The result of this move was to close out non-union labor, especially immigrants and non-whites, and drive up costs to taxpayers. A year later, he signed the Norris-LaGuardia Act, whose five major provisions each enshrined special provisions for unions in the law, such as prohibiting judges from using injunctions to stop strikes and making union-free contracts unenforceable in federal courts.9Hoover’s interventions into the labor market are further evidence of his rejection of laissez-faire.

Two other areas that Hoover intervened in aggressively wereimmigration and international trade. One of the lesser-known policy changes during his presidency was his near halt to immigration through an Executive Order in September 1930. His argument was that blocking immigration would preserve the jobs and wages of American citizens against competition from low-wage immigrants. Immigration fell to a mere 10 to 15% of the allowable quota of visas for the five-month period ending February 28, 1931. Once again, Hoover was unafraid to intervene in the economic decisions of the private sector by preventing the competitive forces of the global labor market from setting wages.10

Even those with only a casual knowledge of the Great Depression will be familiar with one of Hoover's major policy mistakes—his promotion and signing of the Smoot-Hawley tariff in 1930. This law increased tariffs significantly on a wide variety of imported goods, creating the highest tariff rates in U.S. history. While economist Douglas Irwin has found that Smoot-Hawley’s effects were not as large as often thought, they still helped cause a decline in international trade, a decline that contributed to the worsening worldwide depression.

Most of these policies continued and many expanded throughout 1931, with the economy worsening each month. By the end of the year, Hoover decided that more drastic action was necessary, and on December 8, he addressed Congress and offered proposals that historian David Kennedy refers to as “Hoover’s second program, ” and that has also been called “The Hoover New Deal.”11 His proposals included:

•

The Reconstruction Finance Corporation to lend tax dollars to banks, firms and others institutions in need.

•

A Home Loan Bank to provide government help to the construction sector.

•

Congressional legalization of Hoover’s executive order that had blocked immigration.

•

Direct loans to state governments for spending on relief for the unemployed.

•

More aid to Federal Land Banks.

•

Creating a Public Works Administration that would both better coordinate Federal public works and expand them.

•

More vigorous enforcement of antitrust laws to end “destructive competition” in a variety of industries, as well as supporting work-sharing programs that would supposedly reduce unemployment.

On top of these spending proposals, most of which were approved in one form or another, Hoover proposed, and Congress approved, the largest peacetime tax increase in U.S. history. The Revenue Act of 1932 increased personal income taxes dramatically, but also brought back a variety of excise taxes that had been used during World War I. The higher income taxes involved an increase of the standard rate from a range of 1.5 to 5% to a range of 4 to 8%. On top of that increase, the Act placed a large surtax on higher-income earners, leading to a total tax rate of anywhere from 25 to 63%. The Act also raised the corporate income tax along with several taxes on other forms of income and wealth.

Whether or not Hoover's prescriptions were the right medicine—and the evidence suggests that they were not—his programs were a fairly aggressive use of government to address the problems of the depression.12 These programs were hardly what one would expect from a man devoted to “laissez-faire” and accused of doing nothing while the depression worsened.




... the Hoover interventions include: expanded public works( ever heard of Hoover dam), greater government control over agriculture, the Smoot-Hawley tariff, a virtual end to immigration, government loans for construction and other businesses ... Most important was Hoover’s pressuring businesses to not cut wages even as the prices of their output fell. The result was higher real wages, which were responsible for the unemployment rate topping out at 25 percent, causing the greatest human toll of the Great Depression. [1]
Hoover, much like FDR, was skeptical about free markets. [2]

 

In 1938 real GDP reached 1929 levels. Capitalism would have got it there in a year.




US Real GDP by Year

Dec 31, 1938 1.08 trillion


Dec 31, 1930
0.97 trillion
Dec 31, 19291.06 trillion

http://www.multpl.com/us-gdp-inflation-adjusted/table

 

Human nature is the problem. Everything you mention is part of the human condition. It's also why socialism, racism, monarchism and other systems fail; human nature.

IMO, the best system we have so far is a Constitutional Republic with a regulated capitalist economy.

 

Technically it's only market fundamentalists that ignore human nature. They essentially corrupt Adam Smith's invisible hand and assume that hyper rationality is the norm. We'd know them as 'rational idiots'

Heterodox economics has known for yonks that a more detailed understanding of human nature is needed. We see that, for example, with the use of economic psychology in post-Keynesianism and how it confirms the self-regulation failures of capitalism. We also see it in socialism, where it appreciates that efficiency and equity go hand in hand. It recognises the links between human nature and productivity, such as the importance of our social nature (and therefore information flows) and our creativity (and therefore the dangers of alienation)

 

OUR HIERARCHY OF NEEDS

So let's get rid of human nature.

Silly, right? Can't be done.

What Americans fail to understand is that, as individuals, they are an integral part of a larger and complex Socio-economic Entity called a "Market-economy" within which they are dependent upon one another for sustaining their "needs".

What needs? Those were best described by Maslow's Hierarchy of Needs - the bottom two levels of which are life-sustaining. And thus, the government of the people has the primary responsibility for assuring that the fundamental needs of human existence are available to all the nation's inhabitants.

That notion is nowhere stipulated in the Constitution. But, it is nonetheless a basic, existential truth of any society.

If satisfying needs is the the Principle Rule, then from it derives this "Rule 2": Income is the prime necessity in order to obtain a decent standard of living - that is, addressing the first two layers of personal and family needs that sustain their existence.

Governments therefore also have the fundamental responsibility to assure that incomes are of a sufficient level to meet such needs. The US fails as that national objective - largely because of unacceptable levels of taxation that permit the unfair distribution of incomes as described here.

Until we rectify income-taxation to avoid the Income Disparity that ravages the US, the country will remain in socio-political turmoil.

And quite possibly risk deadly internal strife that may undo the bedrock of national stability ...

PS: In similar-but-different historical circumstances this has occurred many times in the history of mankind. (The last time it provoked WW2.)

 

Exactly opposite actually. if everyone gets rich how is that excessive inequality? Look at China. They switched to capitalism and 700 million moved into the middle class <Rule 3> How on earth is that inequality <Rule 2/3>

 

Why so afraid to give us the best example of the this failure? <Rule 2/3>

 

<Reply to Deleted> You fail to distinguish crumbs from disparity. Your statement that there is no excessive inequality in the U.S. is as bogus as it is laughable. And excessive inequality is rapidly increasing in China.

 

Only a right wing yank would celebrate a dictatorship as success in capitalism. I must admit that I'm terribly disappointed with the quality of right wing rant on the economics forum. A few year's ago there were at least a handful of fake libertarians who could refer to economics with validity. Now? None. Idiocracy arrived early?

 

WHOA!!! Better go look up when the G.D. started and ended! Your numbers show that once FDR's reforms were in place, the GDP started rising rapidly!

 

But how much that is natural business cycle? FDR's conservatism isn't anything to applaud.

 

FDR TOOK US OUT OF THE GREAT DEPRESSION!!!!!!!!! LOL!!!!!

 

U.S. income inequality, on rise for decades, is now highest since 1928
http://www.pewresearch.org/fact-tan...n-rise-for-decades-is-now-highest-since-1928/

Of Course U.S. Inequality Is Rising, It Was Meant To
https://www.forbes.com/sites/timwor...meant-to-we-planned-it-this-way/#6e9041f6b5a6

35 soul-crushing facts about American income inequality
The money given out in Wall Street bonuses last year was twice the amount all minimum-wage workers earned combined
https://www.salon.com/2015/07/15/35_soul_crushing_facts_about_american_income_inequality_partner/

Economic Inequality: It’s Far Worse Than You Think
The great divide between our beliefs, our ideals, and reality
https://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think/

The Rich and the Rest
Inequality leaves many Americans poor and voiceless, Harvard analysts say.
https://www.usnews.com/news/the-rep...the-costs-of-inequality-the-rich-and-the-rest

The United States of Inequality
https://takingnote.blogs.nytimes.com/2016/06/21/the-united-states-of-inequality/

 

WW2 ultimately achieved that.

 

The poor GDP of the Depression ended. His reforms benefited capitalism and that benefited workers at the time.
"Business cycle"? When he benefitted businesses, he benefitted the business cycle. You can't separate them.

Conservatism? Liberalism.
https://quizlet.com/15990754/fdrs-new-deal-15-reforms-flash-cards/

https://quizlet.com/78255708/ushist15-the-new-deal-notes-flash-cards/

 

That is debated. But the improvements began before WWII.

 

I think its important that we acknowledge that FDR wasn't a fan of Keynes. His policies were innately conservative. Did his policies provide help? I would hope so. But they weren't sufficient. WW2 enforced economic rationality on the US. I of course wish that wasn't needed!

American conservatism shouldn't be given an easy ride just because the current conservatives are even more cretinous!