will there be a QE 3 ?

That's because as a market evangelist you use statistics in a deceptive manner and hope nobody will notice. Maybe in Tea Party land, but there are posters here too smart for that.

You used AVERAGES to make this analysis, which generally means a conservative is trying to pull a fast one. Instead of looking at average unemployment over the Depression, let's look at a graph of how unemployment rates changed over time.

http://jdbtrading.blogspot.com/2010/01/great-depression-unemployment-rate.html


http://4.bp.blogspot.com/_pbptS_Wjb...akhl84/s1600-h/DepressionUnemploymentRate.jpg

As you can see, the UR peaked at 25% in 1933, and steadily dropped thereafter, going down to 12% in 1937, with a bump in the road in 38, and then a sharp decline. FDR became president in 32, and didn't get his policies going really until 34. FDR actually ran on a balance budget plank, ironically enough, but realized when in office that the budget wasn't the problem. Employment rates are always a lagging indicator in any case, so it took awhile for FDRs Keynesian policies to effect employment rates.

I'd call that a success which proves FDR's policies worked.

 

Let's look at the numbers:



http://www.shmoop.com/great-depression/statistics.html


From 1933 until 1939, the unemployment numbers were as follows:

'33 - 24.9
'34 - 21.7
'35 - 20.1
'36 - 16.9
'37 - 14.3
'38 - 19.0
'39 - 17.2
'40 - 15 roughly
'41 - 9.7 roughly

Do the math - that averages to about 17.7%.

And the last two years includes the effects of the Lend Lease Act and the massive pre-war military spending that had begun in America.

So, from 1933 until 1939, unemployment under the New Deal averaged 19.15% (that's about 12% in today's figures).

PLUS the DOW went down between mid 1933 and mid 1942.

Plus a MASSIVE public debt to boot.

And Keynesians call that a success?

Okaaaaaay.


And btw - in 1920/21 - under Austrian School style governing, the unemployment rate and the DOW were back to pre-recession levels in less then 3 years with NO government deficit.
If you notice the chart, unemployment under the New Deal never came remotely close to pre-Depression levels before the WW2 economy took over.


Have a nice day.

 

Policies that reduced unemployment from 25% for 5 straight years -- and ultimately brought them down to almost zero. Yep I'd call that a success.

 

Almost zero?

According to your link, that was not until 1944 when the full WW2 war economy had been going for years.

Are you crediting the WW2 American war economy to the New Deal?

I suppose Hitler starting WW2 and Japan bombing Pearl Harbor was part of the New Deal plan as well?


And you missed this part:

'And btw - in 1920/21 - under Austrian School style governing, the unemployment rate and the DOW were back to pre-recession levels in less then 3 years with NO government deficit.
If you notice the chart, unemployment under the New Deal never came remotely close to pre-Depression levels before the WW2 economy took over.'

 

Actually, let's put it another way:

it took the New Deal - with all it's massive spending - 5 years to get the unemployment rate down to almost twice as bad as it was two years before the New Deal started AND 4 times as bad as it was before the Crash.
All with a DOW that actually went down 13% between mid-'33 and mid-'42.

I guess that is a Keynesian version of success.

Noted.


Have a nice day.

 

Bush fought two wars for almost 8 years and didn't bring down unemployment, so yep, FDR did it right.

 

Keep flailing. FDR started with a 25% umemployment rate and brought it down year by year, with one blip.

Bush fought two wars in 8 years and had a thoroughly anemic recovery

 

Flailing - lol.

Every word I typed above is 100% accurate.

Prove me wrong if it isn't - oh, that's right...you can't.


And why do you keep mentioning Bush Jr.?

 

But that would require a significant change in succession rules, which only might add yet another full generation to the timeline.

 

Except the fact that FDR reduced the unemployment rate every year he was in office but one.

 

Here is what I typed:

it took the New Deal - with all it's massive spending - 5 years to get the unemployment rate down to almost twice as bad as it was two years before the New Deal started AND 4 times as bad as it was before the Crash.
All with a DOW that actually went down 13% between mid-'33 and mid-'42.


Name one thing specifically that I typed that was not 100% accurate?

And, once again, why do you keep bringing up Bush Jr.?

 

In your opinion, the U.S. WW2 economy was part of the New Deal?

Yes or no only, please?

 

FDR drafted

 

You neglect to say how much more the Dow would have likely lost and how much higher the average unemployment rate would have been without the New Deal. It's known that the New Deal created jobs and added value to the GDP, and through increased demand, a higher Dow than the shambles Hoover and the Republicans left it in. If you include Hoover's term, the Dow lost 89% of its value. http://www.djaverages.com/

http://krugman.blogs.nytimes.com/2011/04/01/1921-and-all-that/
http://krugman.blogs.nytimes.com/2011/04/02/more-on-1921/
Look, the Austrians need to keep up the comparisons of aranges and sardines, and keep convincing people they are similar, or else their theoretical house of cards falls down from the slightest wind. 1929 and 2007 were balance sheet recessions, while 1921 was about adjustments in a war time economy going back to a peace time economy. Private debt was low in 1921, while 1929 and 2007 were all about private debt.

But then, FDR spent many times what we did and the Depression ended.

You didn't provide even half of the facts.

The Austrians want to enact policies to contract the economy. How much more unemployment will be good enough for them for them to call a lowered Dow, higher unemployment and lowered GDP a "success"?

Then you can call failure success. I won;t do that.

The data is on this forum. It's on google, in economic journals and plenty of blogs if you put the Austrain fallacy out of your mind. and that's where the Austrians lose it. They keep making predictions with a one or two slipping through to be correct, but then keep making wrong ones about high inflation coming tomorrow, and tomorrow never comes for their predictions.

 

Policies that brought down unemployment after a classical economic approach, not unlike the austrian approach, left the economy in shambles.

 

And you neglected to show ANY proof of either. Why? Because you can't.

It's the same thing Keynesian's are saying this time:

'Without the massive spending the economy would have been much worse. We have no unbiased, factual proof...but trust us.'

 

So you can't deny the probability either. And the attempt by the government to cut spending in june of 1937 and the resulting recession of 1937-1938 shows that spending had a huge factor in helping the economy to grow in a time of recession, particularly a liquidity trap. So we know that without the spending growth is slowed or stopped.

 

I strongly deny a probability. I cannot deny a possibility, though. But anything is possible.


And the 1937 reduction in spending proves nothing more then the Keynesian/New Deal was a failure. It was supposed to help make the economy strong again. Yet, as soon as the stimulus was removed, the economy faltered again. So nothing had been fixed. All the New Deal had done was put a bandage on it instead of letting the economy fix itself - which it had done every time America had a recession; which has averaged once every 4-6 years since America began (I believe).
The same thing is happening today. Everytime the QE's stop - the economy takes a nosedive because it has gotten addicted to the stimulus - like a drug addict.
If anything, this proves that the stimuli are failures and that they did not get the economy back on it's feet. They are just stopping the economy from making the tough adjustments it needs to make to get healthy again.


I will type it again;

it took the New Deal - with all it's massive spending - 5 years to get the unemployment rate down to almost twice as bad as it was two years before the New Deal started AND 4 times as bad as it was before the Crash.
All with a DOW that actually went down 13% between mid-'33 and mid-'42.

And the recession of 1920/21 (with it's Austrian School-style government policies) was over in 18 months and the stock market and the unemployment rate were back to pre-recession levels in 3 years. In ten years of the New Deal, it could NEVER make that claim (the DOW took until the mid-50's to get back to 1929 levels). That despite massive deficit spending while the 1920/21 recession posted a balanced budget.

 

http://www.cbo.gov/ftpdocs/120xx/doc12074/02-23-ARRA.pdf

Stimulus was successful for it's size, basically. It kept unemployment from falling more and raised GDP.

 

Wow. You come to a completely wrong conclusion by misreading the evidence. 1937 and WWII absolutelyu prove that Keynesian policies work. Up to 1937, as you noted, the spending wasn't huge, but as Landru showed, was quite successful in lowering unemployment in the face of a liquidity trap (which the 1921 recession wasn't a balance sheet recession like the GD or GR, so no liquidity trap was involved in that much smaller and shorter recession). WWII, beinjg the largest spending program the U.S. and world had or has ever seen, put an end to weakness in the previous spending plans that were smaller even in the New Deal. But once the New Deal's reforms and regulations were in place with a growing economy, it resuilted in 40 years of relatively high growth in comparison to the Reaganista and post-Reaganista periods.

And above, Landru Guide Us placed the reality in a more realistic light.

Again, you compare oranges to sardines and expect us to see how similar they are. Two different kinds of recessions don't require the same corrective measures. So, nice try, but the data goes against you on this.

 

It is impossible to know what would have happened had no stimulus occurred.

Plus, the unemployment rate is now higher then it was before the Stimulus.

 

Wasn't huge?!?

It was the largest spending by the government on the economy up to that time by MILES.


And I stand behind my posts.

New Deal? Massive deficits between 1933-42 = 17.7% avg. unemployment rate & 13% DOW drop (DOW never again matched pre-crash level under FDR or Truman).

Austrian School 1920-21 recession with no deficits = unemployment rate and DOW fully recovered in 3 years.


Can you prove any of these stats are wrong?

http://stockcharts.com/freecharts/historical/djia1900.html

 

When Obama signed the 'Recovery Act' in Feb. '09 into law - unemployment was at 8.2%.

Within 8 months it was at 10.1%.

Now it's at 9.1% and rising.

http://www.miseryindex.us/urbymonth.asp


Some recovery act.

 

It was the largest spending program ever undertaken in history, leaving the U.S. with debt:GDP of over 120%, and paid down via higher taxes. and the spending policies went past the war with the Marshall Plan and grew the world economy as well as the U.s. economy. In the U.S., the growth was generally high until the Reaganista era.

 

And if you bothered to read the CBO report, ARRA kept unemployment lower than it would have been without it. You can throw out irrelevant info like that all you want, but it sdoesn't change the fact that for as small as the ARRA was, especially because the 40% tax cuts in the program didn't have the multiplier effects as focused fiscal spending has, still doesn't take away from the success of the program. We know, via economic history and the deata supporting the idea, that Austrian approaches would see higher unemployment and lowered revenues resulting in higher deficits and debt than we have now.