Sunday, June 27, 2010

A Beginning of a Long Response to a Wizbang post.

This is in response to an article on Wizbang. It's a long story as to why it's here and not there, but that isn't really relevant right now.

Original article here

I've broken down every single claim I think is provably wrong, and listed them below. I'll post citations for my claims in the comments to follow this post.

The Democrats in general and President Obama in particular, have discovered all too late a political liability in the continuing unemployment figures. As the possibility of losing control of the House and Senate has crept towards probability, the Democrats have finally begun to consider how to address the problems their own policies made.

Incorrect Claims:

1. Democrats haven't realized unemployment figures being high would be a problem.
2. Democrats might lose control because of this alone, rather than it being an off-election year, in which the party in the white house typically loses seats
3. The Democrats are responsible for unemployment, as a consequence of *their own policies* (as opposed to Republican policies which have created the recession and the unemployment)

...recessions happen from time to time, and a review of the past shows that neither Republicans nor Democrats have been able to prevent their occurrence. However, it is possible to reduce the length and severity of a recession sometimes, and to make it worse as well. The best example of this would be the Great Depression, a serious recession made worse by the foolish policies of both President Hoover and President Roosevelt (each chose an extreme solution that led to unintended consequences). The mistakes made by Hoover were built on the assumption that government did not need to do anything, while Roosevelt's mistake was that anything government did would help.

Incorrect Claims:

4. That Hoover's mistakes were based on the assumption that government did not need to do anything - his mistakes were based on the notion that government *shouldn't* do anything, that it was morally wrong for government to interfere.
5. That Roosevelt's policies involved any mistakes that were near the magnitude of Hoover's
6. That Roosevelt's policies made worse OR prolonged the depression, instead of easing and shortening it.

President Obama inherited a recession, this is true. However, the recession was relatively mild, and most economists (the serious ones, not the ones who chase television stations and go hunting for book deals) say the recession itself actually ended earlier this year. The problem is that the jobs never came back, and we have to ask why. For that, we go back to the Depression era. The Depression is not often examined carefully for cause. Most people assume it was due to the stock market crash of 1929, but if so you would have to ask why....When a whole industry loses stock value, the effect is magnified subjectively even though the company is still level with its competitors; if the public believes the industry is sound it will continue to support it, but if they lose confidence the entire industry will suffer.

Incorrect Claims:

7. that the recession Obama inherited was relatively mild. This is the worst recession since the Great Depression.
8. the cause of the Great Depression was not merely a stock crash.

The present economic condition was created through three principle causes - the housing market bubble burst, the financial market crisis from CDOs, and stagnant strategy from the U.S. government....If consumers stop buying, the economy slows, and that is too strong a force to ignore or imagine that government can control. It should be noted at this point, that nothing done by the Obama Administration has been directed at improving consumer confidence. What improvement has occurred, has happened in spite of his policies.

Incorrect Claims:
9. Stimulus spending and unemployment extensions are each a "stagnant strategy", when in fact it is exactly the same strategy pursued by FDR which helped get us out of the Great Depession - because it enables consumers to continue buying what they need, rather than being forced to stop.
10. That Obama could somehow speed up the recovery by increasing "consumer confidence".

The problem in restoring jobs, is that this needs corporate confidence, ...When government actions threaten higher taxes, obstruction of business opportunity, penalties for apparent political orientation or simply being a target for a politician's campaign strategy, businesses will choose to avoid the risk and control costs.

Incorrect implications:
11. The implication that Obama's economic policies at all, EVER, include penalties purely for political orientation
12. That higher taxes ALWAYS threaten job growth more than stimulus spending can increase job growth - as increased spending shows businesses **actual money** - as opposed to "increasing their confidence" that if they start hiring now, they'll make more money someday.

There are three driving forces at work in the present situation regarding unemployment. The first is the obvious fact that President Obama's actions have ignored unemployment, or made conditions worse by attacking major potential employers. The second is that Republicans, sensing significant opportunity in the fall midterm elections and bitter about the contemptible treatment they have received from the most partisan President since Nixon, have for the most part decided to let Obama and the Democrats receive the due consequences of their decision. And the third force is the nature of the economy itself. The American economy in general has been shifting from manufacturing to service for decades, and we are now seeing the effects of that transition in the lack of ability of many workers to transition to the new demand.

Incorrect Claims:
13. That Obama's actions have "attacked" major potential employers AT ALL. I'd love to see some specific companies that have been attacked by Obama's economic policies.
14. That Obama's actions have ignored unemployment, rather than being focused on repairing it
15. That there is some "new demand" for services that workers are showing a "lack of ability" to transition too. (This last one is especially weird).

The most recent bill of debate has been the option to extend the amount of unemployment benefits. Those in favor of the bill argue for it on compassionate grounds...such a bill increases costs for employers and therefore further reduces the opportunity for companies to hire new employees. The bill then is largely superficial in effect, and may be said to do more harm than good to the nation as a whole.

Incorrect Claims:
16. That those who argue in favor of extending unemployment due so solely on "compassionate grounds".
17. That because such a bill may increase costs for employers, which can't be outweighed by the increase in consumer spending that unemployment benefits make possible.

...Money has to come from someplace, and so benefits paid by government agencies must come from public revenues....holistically the government action is parasitic and does more harm than good by definition.

Incorrect Claims:
18. that "money has to come from some place" means it can't come from credit.
19. that government money coming from taxes somehow means that it can ONLY be parasitical - i.e. that government money can't be spent in a way that **increases** value
20. that, again, there is not also a **pragmatic** reason to continue unemployment spending - that it keeps the economy afloat in times of trouble so that it can fully recover.

Neither liberals or conservatives, Republicans nor Democrats, enjoy perfect knowledge of how government should operate in all cases and situations. It is therefore vital for a discussion, even debate, to continue on specific actions the government may take or consider, in ever aspect of the public welfare. We should be able to agree that as situations change, perspectives on all the major issues develop from former positions to more considered or sometimes evolved opinions. Accordingly, for all the strong emotion present in our debates, it is important to listen to the other side and consider what they offer. Even if rejected, the dialogue and respectful consideration of alternatives is a quality much in need and short in supply.

A statement which I agree with wholeheartedly.

41 comments:

  1. - Democrats haven't realized unemployment figures being high would be a problem.

    I can't find a single member of the Senate, Congress or White House who said this or might possibly agree that high unemployment figures wouldn't be a problem.

    You couldn't get elected dogcatcher without knowing that.

    - Democrats might lose control because of this alone, rather than it being an off-election year, in which the party in the white house typically loses seats

    http://hnn.us/articles/1094.html

    - The Democrats are responsible for unemployment, as a consequence of *their own policies* (as opposed to Republican policies which have created the recession and the unemployment)

    As the Democrats haven't increased taxes at all, I can't see or find any direct connection to how the Democrats have increased or made unemployment worse.

    ReplyDelete
  2. For further posting, I'd like to ask that any of you who actually strolled over here from Wizbang read these articles:

    http://en.wikipedia.org/wiki/Great_Depression#Causes

    http://en.wikipedia.org/wiki/Herbert_Hoover#Policies

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

    They're great all-around sources of info on the topic. If you don't trust them because they're Wikipedia, that's fine with me - but I do ask that you at least prove some thing in each article with other nonpartisan sources. Factcheck.org or politifact.com for instance.

    ReplyDelete
  3. Too much work, Mr X. Mr Drummond is a total coward. He has learned from previous encounters with you, and with me, that he is better off just preemptively deleting your comments so that he is not shown to be the pathetic victim of Kruger-Dunning Syndrome that he is.

    I read your encounters with him on a couple of threads, and his tactics were identical to those he used with me in the past. He gets tired of being called out repeatedly for factual errors, argument by unsupported assertion, and logical fallacies. So he announces thay you are wrong, he is right, any fool can see it, and victory is his.

    It's pathetic.

    You can keep trying to drag him back to the point until the cows come home, it won't do any good. Pretty soon he'll stoop to insults, such as recommending the Marmaduke movie, and soon resort to flowery 19th Century dueling language. It would be hilarious if it wasn't so frustrating.

    And that dense dense prose! And those endless paragraphs! The run-on sentences, the twisted syntax, the fourth-grade logic!

    ReplyDelete
  4. I am a great believer in Wikapedia as long as the topic is not political. I skimmed:

    http://en.wikipedia.org/wiki/Great_Depression#Causes

    but, it is basically crap. A perfect example is this line:

    "The crisis had many political consequences, among which was the abandonment of classic economic liberal approaches, which Roosevelt replaced in the United States with Keynesian policies"

    Really??? Let's see. The General Theory was not published until 1936 and Keynes did not send his first letter to FDR until 1938. I hardly think FDR replaced any of his economic thrashing about between then and Pearl Harbor.

    ReplyDelete
  5. Now, back to metasalor. All Drummand was saying is the Democrats did not believe unemployment would still be a problem in 2010. They seemed to think the stimulus and time would take care of all that. They did not begin to panic until this year as new unemployment claims remain north of 450K We all know the 9.7% U3 number is false because of temporary census hiring and discouraged workers. Democrats now know the U3 number will be above 10% by October. Given that, it really is hard to successfully argue DJ is wrong.

    When you claim none of the Democratic policies could have affected unemployment, well, that is pretty dumb and shows a zero knowledge of business and hiring. For example, we have the impending tax increases with the withdrawal of the Bush tax cuts as well as Obama saying "everything is on the table". Recently, Hoyer said they will have to take back the middle class tax cuts. Then we have this idiotic health care bill which penalized having employees with increased taxes for not having the "proper" coverage or not having it at all. When you raise the cost of employees, you get less of them.

    Ask the poor slobs trying to find minimum wage jobs how much the minimum wage increase helped those 22% who are unemployed.

    I have followed DJ since he was with PoliPundit. I have always found him interesting and thorough. I don't get your continuing insults toward him.

    I also don't see a list of statements you disagree with to be very useful unless you add why you disagree. Since you are the one that said DJ is wrong, I am not going to start defending DJ's claims you cannot substantiate as wrong. So far, I am unimpressed with your effort. I am going back to Wizbang to post that.

    ReplyDelete
  6. Might be more efficient if Mr Drummond would just argue with Jim X directly. But, in an incredibly cowardly move, he announced, ON SOMEONE ELSE'S THREAD, that he would preemptively ban Mr X from commenting.

    Ask him why.

    He'll reply with a lot of nonsense about incogency, insults, etc., when Mr X's comments are perfectly legitimate, just something Mr Drummond has trouble defending against. Mr Drummond doesn't like to work hard. Anyone who disagrees with him is immediately labeled a dispeser of "bilge," "muck," or "lies."

    ReplyDelete
  7. Rick Caird, I haven't gone through the entire list yet. Thanks for coming to read; that's on my plate for tonight. I'll update the other thread on Wizbang when I'm through.

    ReplyDelete
  8. Oh, but as per Rick Caird's statement that Roosevelt couldn't have followed Keynesian theory because it came too late in FDR's administration - this thus being used as evidence that the entire Wiki article is biased - I'd respond with this:

    http://en.wikipedia.org/wiki/John_Maynard_Keynes#During_the_Great_Depression

    Keynes had begun a theoretical work to examine the relationship between unemployment, money and prices back in the 1920s.[22] The work, Treatise on Money, was published in 1930 in two volumes...At the height of the Great Depression, in 1933, Keynes published The Means to Prosperity, which contained specific policy recommendations for tackling unemployment in a global recession, chiefly counter cyclical public spending.... While it was addressed chiefly to the British Government, it also contained advice for other nations affected by the global recession. A copy was sent to the newly elected President Roosevelt and other world leaders.

    ReplyDelete
  9. Rick Caird at 3:37 said: "All Drummand was saying is the Democrats did not believe unemployment would still be a problem in 2010. "

    Right, and all I'm saying is he has no evidence for that theory.

    I'd be easy for me to make the exact claim about Republicans, because of their actions to stop unemployment - i.e. none. But I don't have any evidence for that fact. Evidence would come in the form of specific statements. Anything other than that is purely attempts at mind-reading - which cannot help but be biased, no matter who is doing it.

    ReplyDelete
  10. " A copy was sent to the newly elected President Roosevelt and other world leaders. "

    The counter argument is the 1937 recession due to higher taxes. Clearly, if FDR had even read the treatise, he paid no attention.

    ReplyDelete
  11. I have followed DJ since he was with PoliPundit. I have always found him interesting and thorough. I don't get your continuing insults toward him.

    I disagree with him when his facts are wrong, or when he says something which has no evidence at all.

    If he does fling some insult at me, then I fling it back in exactly the same way, to see how he likes it. He invariably doesn't, of course. But what causes him to be driven to insult is apparently being proven wrong in fact.

    I think if you follow the threads you will see that I am very careful never to insult another commenter first - I don't believe in personal attacks, I believe in facts. I'd prefer not to be involved in that childishness at all, but once someone chooses to personally insult me I see no reason not to return the disfavor.

    ReplyDelete
  12. "Right, and all I'm saying is he has no evidence for that theory.".

    Well, did you see any hand wringing from the Democrats over no jobs during 2009. Did you see any "We must do more" other than to keep extending the unemployment program. A series of short extensions indicates to me that it is not considered to be a long term problem.

    ReplyDelete
  13. And thanks for your support Bruce Henry. It may be a futile attempt, but I do feel it's necessary to counteract poor information wherever I can. It may also be that after completing this fisking, I'll have a good resource to refer back to. Or, just move on from. : )

    ReplyDelete
  14. "Well, did you see any hand wringing from the Democrats over no jobs during 2009. Did you see any "We must do more" other than to keep extending the unemployment program. "

    Yes, I did see a lot more - the entire stimulus program, for example. That was the whole point of getting the economy going - getting people back on their feet so they could get the economy back on its feet.

    ReplyDelete
  15. "Yes, I did see a lot more - the entire stimulus program, for example. That was the whole point of getting the economy going - getting people back on their feet so they could get the economy back on its feet."

    And from my earlier post: "They seemed to think the stimulus and time would take care of all that. They did not begin to panic until this year as new unemployment claims remain north of 450K "

    Clearly, I was referring to after the stimulus was passed. We kept hearing jobs "created or saved". I repeat my point, there was no hand wringing because time and stimulus was supposed to create or save all those jobs. It was only when it became clear the "not so much" stimulus had failed miserably that the Democrats began to get worried about jobs. Remember, they kept dealing with health care, cap and trade, and everything but jobs and in fact were dealing with things that would hurt job creation.

    My point stands.

    ReplyDelete
  16. The counter argument is the 1937 recession due to higher taxes. Clearly, if FDR had even read the treatise, he paid no attention.

    I'm glad you brought that up.

    First, the "1937 recession" is really just a dip in the overall Great Depression.

    Second, the dip directly resulted from a departure in the still-new Keynesian theory - that the budget deficit was a bigger deal, and should be dealt with by cutting government spending.

    http://en.wikipedia.org/wiki/New_Deal#Recession_of_1937_and_recovery

    When the dip basically showed this was the wrong course, then:

    "Ignoring the requests of the Treasury Department and responding to the urgings of the converts to Keynesian economics and others in his Administration, Roosevelt embarked on an antidote to the depression, reluctantly abandoning his efforts to balance the budget and launching a $5 billion spending program in the spring of 1938, an effort to increase mass purchasing power.[54] The New Deal had in fact engaged in deficit spending since 1933. Now they had a theory to justify what they were doing."

    And after this point, the nation continued to emerge from the rest of the Great Depression.

    ReplyDelete
  17. Hopefully blogspot didn't eat my response comment to 2:21 is, that:

    a) the "1937 recession" was of course actually a part of the larger Great Depression

    b) more directly, yes FDR was persuaded by the Treasury and the Federal Reserve to depart from the as-yet unproven Keynesian policies. The reduction of Federal deficit spending directly resulted in the 1937 dip - which confirmed for FDR that Keynesian policies were the way to go.

    http://en.wikipedia.org/wiki/New_Deal#Recession_of_1937_and_recovery

    "Ignoring the requests of the Treasury Department and responding to the urgings of the converts to Keynesian economics and others in his Administration, Roosevelt embarked on an antidote to the depression, reluctantly abandoning his efforts to balance the budget and launching a $5 billion spending program in the spring of 1938, an effort to increase mass purchasing power.[54] The New Deal had in fact engaged in deficit spending since 1933. Now they had a theory to justify what they were doing."

    ReplyDelete
  18. Remember that I said Wikapedia fell down when it came to politics and this is politics. If you read the rest of the section you referenced, the very title is "Recession of 1937" and the first line then says "dip".

    FDR was thrashing around as I said earlier. He tried the tack of a "capital strike" and conspiracy, but he found none. Eventually, he came back to deficit spending, but as your reference points out they now had a name for it: Keynesian Economics.

    Now, if you go look at the GDP charts, you will find the GDP in 1939 was essentially the same as it was in 1929 (and 1936). Your argument is that deficit spending is the cause of the end of the depression. I disagree and so does Milton Friedman. The Fed allowed the money supply to contract and the decade was spent adjusting to FDR's ever changing economic policies and rebuilding the money supply. The rebuilding of the money supply and the advent of the WWII buildup coincided and that drove GDP up at an almost exponential rate. Unemployment quickly declined. We can see that by looking at the chart of GDP at the end of WWII. it declined again.

    For the charts:

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

    And some other charts:

    http://www.usstuckonstupid.com/sos_charts.php

    I do not believe FDR's deficit spending was responsible for lifting us out of the depression any more than last years "not so much" stimulus has helped us with this recession.

    ReplyDelete
  19. If you read the rest of the section you referenced, the very title is "Recession of 1937" and the first line then says "dip".

    Sure. But *you* were saying the 1937 recession was proof FDR's policies didn't work; thus my response that the 1937 recession wasn't some isolated event. It was:

    a) part of the larger Great Depression
    b) the direct result of non-Keynesian monetary policy, which attempted to reduce the deficit rather than keep money pumping through the economy

    Eventually, he came back to deficit spending, but as your reference points out they now had a name for it: Keynesian Economics.

    Right - and he came back to this "something" and used it, because it worked. If you look at the US economic policies before the 1937 dip and after, you'll notice the only appreciably difference is that stray from Keynesian policies - and that the dip went away as soon as FDR resumed them.

    Yes, Milton Friedman disagrees with Keynesian economics. That's no surprise. Keynesian arguments disprove him.

    One of the clearest of these is in Friedman's own argument. What was the WWII buildup? Why, it was a massive government spending program which, even though it added greatly to the Federal gov't's deficits, helped the economy by putting huge segments of the poor and middle class to work.

    I do not believe FDR's deficit spending was responsible for lifting us out of the depression any more than last years "not so much" stimulus has helped us with this recession.

    You're free to believe how you like. However your position re: the stimulus is contradicted by the majority of current nonpartisan economists, and your position re: the New Deal and FDR is contradicted by the majority of economists and economic historians.

    ReplyDelete
  20. Incorrect claims 1-3 are dealt with in the first comment to this page, at 12:19. Sorry those comments aren't numbered - I came up with the numbering scheme after that comment.

    Incorrect claims 4-6:
    4. That Hoover's mistakes were based on the assumption that government "did not need" to do anything - his mistakes were based on the notion that government *shouldn't* do anything, that it was morally wrong for government to interfere.

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

    "Hoover's stance on the economy was based largely on voluntarism.[Full citation needed][36] From before his entry to the presidency, he was a proponent of the concept that public-private cooperation was the way to achieve high long-term growth. Hoover feared that too much intervention or coercion by the government would destroy individuality and self-reliance, which he considered to be important American values."


    5. That Roosevelt's policies involved any mistakes that were near the magnitude of Hoover's

    Also from http://en.wikipedia.org/wiki/Herbert_Hoover -

    "Congress approved the Smoot-Hawley Tariff Act in 1930. The legislation, which raised tariffs on thousands of imported items, was signed into law by Hoover in June 1930. The intent of the Act was to encourage the purchase of American-made products by increasing the cost of imported goods, while raising revenue for the federal government and protecting farmers. However, economic depression now spread through much of the world, and other nations increased tariffs on American-made goods in retaliation, reducing international trade, and worsening the Depression."

    From http://www.answers.com/topic/herbert-hoover

    "Believing that a dole would sap the will of Americans to provide for themselves, he adamantly opposed direct federal relief payments to individuals, though in 1932 he finally allowed relief to farmers through the Reconstruction Finance Corp. "

    and from the above link:

    "After his electoral defeat in 1932 by Franklin D. Roosevelt, he regularly spoke out against what he considered the radicalism of the New Deal and Roosevelt's attempts to involve the U.S. in countering German and Japanese aggression. " [emphasis mine]

    So not only did Hoover oppose the New Deal - he opposed the US' support of our allies that eventually brought us into World War II. So if Hoover had been president instead of FDR, it's very likely that Nazi Germany would have conquered England, and then Russia - while a fascist Japan would have conquered China and from there most of Asia.

    I think that says all I need to say about Hoover's judgement vs. FDR's.

    6. That Roosevelt's policies made worse OR prolonged the depression, instead of easing and shortening it.

    http://en.wikipedia.org/wiki/New_deal#Prolonged.2Fworsened_the_Depression

    "In a survey of economic historians conducted by Robert Whaples, Professor of Economics at Wake Forest University, Whaples sent out anonymous questionnaires to members of the Economic History Association. Members were asked to either disagree, agree, or agree with provisos with the statement that read: "Taken as a whole, government policies of the New Deal served to lengthen and deepen the Great Depression." While only 6% of economic historians who worked in the history department of their universities agreed with the statement, 27% of those that work in the economics department agreed. Almost an identical percent of the two groups(21% and 22%) agreed with the statement "with provisos"(a conditional stipulation), while 74% of those who worked in the history department, and 51% in the economic department disagreed with the statement outright."

    So to be clear - a majority of both economists and economic historians dispute the notion that FDR's policies either prolonged or deepened the Great Depression.

    ReplyDelete
  21. Incorrect claims 7-8:

    7. that the recession Obama inherited was relatively mild. This is the worst recession since the Great Depression.

    http://online.wsj.com/article/SB125581121032292239.html

    "Let's not make any mistake: The current downturn is almost certainly the worst since the Great Depression. A high jobless rate and the loss of personal net worth from collapsing home values and declining stock markets have made this a period of pain for many people."

    8. the cause of the Great Depression was not merely a stock crash.

    http://en.wikipedia.org/wiki/Great_Depression#Causes

    "There were multiple causes for the first downturn in 1929, including the structural weaknesses and specific events that turned it into a major depression and the way in which the downturn spread from country to country. In relation to the 1929 downturn, historians emphasize structural factors like massive bank failures and the stock market crash, while economists (such as Barry Eichengreen, Milton Friedman and Peter Temin) point to monetary factors such as actions by the US Federal Reserve that contracted the money supply, and Britain's decision to return to the Gold Standard at pre-World War I parities (US$4.86:£1)."

    ReplyDelete
  22. Incorrect implications:
    11. The implication that Obama's economic policies at all, EVER, include penalties purely for political orientation

    This is just straight-up slander. I defy anyone to produce concrete evident of this.

    12. That higher taxes ALWAYS threaten job growth more than stimulus spending can increase job growth.

    This is easily countered, as usual, by FDR's policies with the New Deal and Bill Clinton's policies from 1992-2000. Both raised taxes on the wealthy and invested government spending into the poor and middle class; and both reaped the economic benefits for the nation.

    ReplyDelete
  23. Incorrect Claims 13-15:
    13. That Obama's actions have "attacked" major potential employers AT ALL.

    This once again factless slander. I have yet to see any evidence that Obama has attacked ANY major employers. Unless "attacked" means "threw money at them so they could stay afloat". I doubt GM is upset about this kind of violence.

    14. That Obama's actions have ignored unemployment, rather than being focused on repairing it

    Since just about every single mention of the stimulus program is "jobs, jobs, jobs", I don't see how this argument can even be made with a straight face.

    15. That there is some "new demand" for services that workers are showing a "lack of ability" to transition too.

    What new industry in America is desperately trying to hire new people, if only people could be trained for it?

    **There is none**.

    You need to have people buying things, in order to make money, in order for businesses to justify hiring people. That's how it works here in reality world.

    ReplyDelete
  24. Incorrect Claims:
    16. That those who argue in favor of extending unemployment due so solely on "compassionate grounds".

    Keeping people on unemployment is viewed as an important way to keep the economy going. If they aren't spending, then the economy will have that much less to work with.

    17. That because such a bill may increase costs for employers, this can't be outweighed by the increase in consumer spending that unemployment benefits make possible.

    Again, this is contradicted by Keynesian economics.

    ReplyDelete
  25. 18. That "money has to come from some place" means it can't come from credit.

    This is in fact the nature of deficit spending.

    19. that government money coming from taxes somehow means that it can ONLY be parasitical. This is easily disproven by acknowledging that government money can be spent in a way that **increases** the overall GDP - such as by encouraging economic growth.

    In other words, if the government spends money on things which benefit the economy, then a healthier economy can result in more money coming in to the government.

    20. That, again, there is not also a **pragmatic** reason to continue unemployment spending - that it keeps the economy afloat in times of trouble so that it can fully recover.

    ReplyDelete
  26. It was only when it became clear the "not so much" stimulus had failed miserably that the Democrats began to get worried about jobs.

    I honestly don't see how a Democrat-authored and pushed bill which took a lot of effort to pass, that had the specific aim of creating jobs and lower unemployment, doesn't count as evidence that the Democratic party was trying to create jobs and lower unemployment.

    ReplyDelete
  27. I already responded to your first comment.

    4. You have just said Hoover believed in a private/public partnership. That is in agreement with saying Government does not need to do anything (alone) which was the FDR approach. TVA is an example of FDR pushing aside private enterprise. We still have that beast with us today. Government is a vampire. It refuses to die.

    5. I fail to see your complaint about Hoover opposing the new deal. Out of the new deal, we have the bankrupt Social Security program and the black hole of Fannie Mae. There is no doubt that unemployment payments lengthen the period of unemployment. You don't seriously doubt that do you?


    6. Read Amity Shlaes "Forgotten Man" and http://online.wsj.com/article/SB123353276749137485.html By HAROLD L. COLE and LEE E. OHANIAN. Many people are reviewing the history of the depression and concluding government prolonged the problem. We are seeing exactly the same problem today.

    7. The debate is whether government has made the recession worse than it would have been. There is no doubt this is a credit caused recession. Government was the cause of this recession and continues to make it worse.


    8. You did not disagree with Drummond.

    11. Prime example. Bankruptcy of GM and Chrysler and the elimination of the senior debt holders to benefit the UAW. You might want to review your definition of slander.

    ReplyDelete
  28. 12. Drummond is right. The stimulus is debt based and requires more in interest payments. Higher taxes are almost always permanent. Stimulus is always temporary. I will not hire someone if a stimulus results in temporary increase in demand. Your claim that FDR's policies are a counterexample is also countered by #6. Clinton reaped the benefits both of the dot com bubble and the Gingrich insistence in a reduced deficit. I claim, left to his own devices, Clinton would have radically increased the deficit to overcome any increased revenue from his tax increases.

    13. Really, I answered that. The threat of the expiration of the Bush tax cuts (which implies lower demand) and the threats of substantially increased costs due to health care legislation inhibit hiring. That is pretty clear to almost everyone with a business and finance background. I post something on another forum about this jobs, jobs, jobs thing. You have to ignore Obama rhetoric and watch performance. The oil companies had a meeting late last week with the administration on the drilling moratorium. Rigs are moving to Africa and Brazil. Besides, they have forced the shallow drilling to stop. All this is causing the loss of a large number of jobs. The administration does not care. This administration will talk about jobs only as long as jobs do not interfere with their primary agenda. This is an example.

    15. That is not true. History is replete with new ideas that open new markets. How many of us knew we needed a microwave?

    16, I already answered that. Unemployment is not designed to keep the economy going. it is designed as a way to help someone while they look for a new job. Doesn't 99 weeks seem like enough help?

    18. Debt eventually has to be paid back or at least the interest paid. Do you realize the project total deficit after Obama is about $20 trillion. At 5% interest, that comes to #1 trillion a year or about 30% of today's budget. That is clearly not sustainable.

    19. No, No, No. You are trying the Keynesian multiplier which is now negative. Rohmer know that but can't say it any more. That is why Keynesian economics is a fraud and is dying. Europe just gave the finger to Obama and Geithner. Krugman has become a laughing stock on two continents.

    And finally your last post: The "not so much" stimulus was crafted by Pelosi to reward their favored constituencies. That is why so much went to favored constituencies such as state local to fund public employee unions. The who line about "shovel ready" was a lie. Anyone who knew anything about government funding knew there were no "shovel ready" projects hanging around waiting to be funded.

    ReplyDelete
  29. re: your comment on 4-5, posted at 12:23

    4 - You appear to have skipped over the last line of this quote:

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

    "Hoover's stance on the economy was based largely on voluntarism.[Full citation needed][36] From before his entry to the presidency, he was a proponent of the concept that public-private cooperation was the way to achieve high long-term growth. Hoover feared that too much intervention or coercion by the government would destroy individuality and self-reliance, which he considered to be important American values."

    Thus he was against the level of intervention that FDR entered into - which, as it turns out, was necessary to get us out of the Great Depression.

    5 - I'm not sure what you're talking about, but I'm talking about the implication that Hoover and FDR made mistakes that were anywhere near the same. That's why I listed Hoover's huge mistakes.

    6 - I can read that, sure. But it's not going to change the fact that a majority of experts in both economics and economic history disagree with that outlook.

    So until someone comes up with a reason they must all be wrong, I see no reason why to doubt them. Especially as conservatives have been going after FDR's policies for over 70 years now and have yet to make it stick.

    ReplyDelete
  30. 7 - The debate is whether government has made the recession worse than it would have been.

    But this specific claim was about whether or not this was a big recession. It clearly was. Therefore Drummond is clearly wrong here.

    ReplyDelete
  31. 8. You did not disagree with Drummond.

    My fault for incorrect cropping. This was Drummond's statement that I was disagreeing with, with, re: Great Depression:

    Most people assume it was due to the stock market crash of 1929, but if so you would have to ask why.

    However on re-reading this, it's not clear if Drummond agrees with "most people" or not. So I'll let this one go, it's rather minor.

    ReplyDelete
  32. I'm noticing that 9 & 10 were skipped. I think they're pretty solid examples of Mr. Drummond being wrong, so, good.

    11. Prime example. Bankruptcy of GM and Chrysler and the elimination of the senior debt holders to benefit the UAW. You might want to review your definition of slander.

    How so? As for the bankruptcy, bailing out GM and Chrysler saved hundreds of thousands of non-union jobs. Putting the UAW ahead of other debt holders isn't meant to penalize the other debt holders - it's meant to make sure that UAW members, who have a stronger effect on the economy, weren't wiped out.

    Got some other evidence that Obama hated the other debt holders?

    12. Drummond is right.... Your claim that FDR's policies are a counterexample is also countered by #6.

    Did you even read the rest of my response to # 6, which wipes out # 6?

    Clinton reaped the benefits both of the dot com bubble

    Then why did the recovery begin and continue for four straight years before the Internet even began to take off - 1993, 1994, 1995 and 1996?

    and the Gingrich insistence in a reduced deficit.

    You're also forgetting that Gingrich wanted to cut taxes - and Clinton shut down the government rather than let the tax cut go through. This is what gave us our surplus - the first in decades, and the greatest budget surplus in history.

    13. Really, I answered that. The threat of the expiration of the Bush tax cuts (which implies lower demand) and the threats of substantially increased costs due to health care legislation inhibit hiring.

    Oh, come on. "DJ" stated "attacked" - that means direct action. If I were to accept this definition of "attacked", I could say George Bush attacked the same companies by following policies that would increase the cost of medicare and devalue the dollar.

    This administration will talk about jobs only as long as jobs do not interfere with their primary agenda.

    You mean, like any administration ever?

    ReplyDelete
  33. 15. That is not true. History is replete with new ideas that open new markets.

    Irrelevant. DJ is talking specifically about jobs being available *right now*. And it is definitely true that these opportunities don't exist *right now*.

    18. Debt eventually has to be paid back or at least the interest paid.

    Sure - eventually. But DJ is treating this as if the only option for increasing government spending *right now* is to increase taxes.

    if the only way to stay eating is to put it on the credit card, that's what has to be done.

    19. No, No, No. You are trying the Keynesian multiplier which is now negative.

    Whatever. I say Yes, Yes, Yes, and Milton Friedman is disproven. Now, please explain how it is NOT possible for the government to invest in production.

    Let's take a specific example.

    - A kid could be a brilliant doctor but can't afford school
    - The government gives him a loan to go school
    - The kid becomes a doctor, and over the next 20 years pays back this investment many times, not only in loans but in the increased revenues from his taxes.

    Are you saying this isn't possible?

    Since it clearly is, that means that the government can invest taxes in ways that increase production and result in an increase in tax revenue.

    Sheesh.

    ReplyDelete
  34. And finally, # 20. You responded:

    The "not so much" stimulus was crafted by Pelosi to reward their favored constituencies.

    Let's say that's so. That's completely irrelevant to my point.

    DJ's claim is that there are no pragmatic reasons to continue unemployment benefits - only empathetic ones.

    A clear pragmatic reason to continue unemployment benefits, is to continue spending in a badly wounded economy.

    ReplyDelete
  35. You do a nice job of circular reasoning. I have disagreed and cited sources pointing out FDR prolonged the depression with all his thrashing around. You then claim Hoover and FDR differed because what FDR did was necessary to get us out of the depression. In other words, you assume what you are to prove. Second, Hoover was right as you look at how many people are now dependent on the government. Hoover was right in that we have generations now who are not only not self reliant, but continually dependent on government largess.

    Hoover did not create a legacy of Social Security which is now has a roughly $30 trillion unfunded liability. Hoover also did not create a legacy of Fannie Mae which is going to cost taxpayers something on the order of another trillion. neither of those two programs had anything to do with ending the depression. Nor, btw, did TVA.

    7. No, you are again claiming this was a "big recession", but I am claiming the whole recession was caused by government. I include the Fed as government. The goverment created and fueled the housing credit bubble.

    I don't see a 9 and 10 even on rereading. I think you failed to post them.

    11. "Putting the UAW ahead of other debt holders isn't meant to penalize the other debt holders - it's meant to make sure that UAW members, who have a stronger effect on the economy, weren't wiped out." What???? Overriding bankruptcy law and flat out cheating the senior debt holders to favor the UAW isn;t meant to penalize the debt holders. Balderdash. Besides, it was the UAW pension fund who were favored and they were junior debt holders. What all this says is that it makes no difference if you are a secured debt holder if the president favors someone else.

    ReplyDelete
  36. 12. I don;t know about you, but I was active in internet development starting in the late 80's. The dot com bubble did not start all at once, but ramped up. That is what a chart of Clinton budget results shows. Second, do not forget that increased employment also increased the Social Security surplus which reduced the deficit. You are also wrong on Gingrich. Gingrich wanted deeper budget cuts than Clinton would accept. It was not over tax rates.

    13. No. "Attacked" does not necessarily mean direct action on jobs, but actions in pursuit of one objective regardless of the effect on jobs. If cap and trade, for example, will destroy 2.2 jobs for every one created, that is an "attack" on jobs. I cannot recall any administration being so willing to allow loss of jobs as this one. And that goes back to Ike.



    14. R&D occurs now. Obamas disinterest in jobs stops business from taking risk it normally would. Obama has stopped this economy.

    18. No, if you keep putting things on the credit card, it is eventually canceled., Europe did not sell all their bonds yesterday. Markets got killed today. Europe has an even bigger sale for Thursday. if that fails, watch out for Friday. It is only a matter of time until that happens to the US. China is quietly buying more gold. What does that tell you.

    19. You "brilliant doctor" example fails because of the impending take over of the medical system and with its reduced income. But worse, are the number of people coming out of college with $100k or more of debt and no job that will let them pay that back. To take it further, what if the feds invest in this doctor and he decides he does not want to practice medicine. Then what??? Government is incapable of investing in anything except, maybe, infrastructure. That we need, but aren't getting.

    I will take Friedman, Hayek, and von Mises over Keynes. So does Europe and the US Congress.

    20. Drummond merely points out there is a limit to unemployment benefits. At what point is 99 weeks not enough?

    I am going to be working on a project for a few days and will not be responding. However, as nice as this debate has been, you have failed to prove your point that everything Drummond said was wrong.

    ReplyDelete
  37. You do a nice job of circular reasoning.

    You do a nice job of not receiving new information, returning to your original stance, and then accusing someone else of circular reasoning.

    I have stated why Keynesian policies work better than trickle-down economics. I have pointed to expert sources who also disagree with your opinion that FDR's Keynesian policies prolonged and deepened the Depression. I have pointed out multiple times that this disagreement includes the majority of experts in economics and economics history.

    That you refuse to accept that this disproves your stance is on you. I can do no more.

    You then claim Hoover and FDR differed because what FDR did was necessary to get us out of the depression. In other words, you assume what you are to prove.

    No, I don't assume it - I state it. The economy improved and recovered under FDR, in ways that it did not and would not have under Hoover. I think the evidence for this stands pretty clear. It's at the above link.

    If you disagree with this, please show your opposite evidence OR show what's wrong with my citations.

    Second, Hoover was right as you look at how many people are now dependent on the government.

    We can push that around all day. However, where it was certain that Hoover was wrong is: that it wouldn't take a huge increase in government intervention to save the economy.

    For all the reasons listed above, Hoover has been proven wrong in this and FDR right. Again, I'm sure you don't want to accept this - but as shown by reasoning and facts and a majority of experts, this view of yours is wrong.

    If you don't think so, please show how those citations are wrong OR show cite some other expert opinions which disprove them.

    ReplyDelete
  38. 7. No, you are again claiming this was a "big recession", but I am claiming the whole recession was caused by government.

    That's irrelevant to DJ's initial claim. The claim was, that this was - and I quote - "President Obama inherited a recession, this is true. However, the recession was relatively mild..."

    Whether or not the recession was "caused by the government" - it certainly *was not* "relatively mild". As disputed by my citation from those left-wing nuts at the Wall Street Journal.

    The further expansions of 9 & 10 must have been eaten by blogspot - my apologies. However they stand fine on their own:

    "Incorrect Claims:
    9. Stimulus spending and unemployment extensions are each a "stagnant strategy", when in fact it is exactly the same strategy pursued by FDR which helped get us out of the Great Depession - because it enables consumers to continue buying what they need, rather than being forced to stop.
    10. That Obama could somehow speed up the recovery by increasing "consumer confidence". '

    Feel free to respond to them now.

    ReplyDelete
  39. # 11 - Overriding bankruptcy law and flat out cheating the senior debt holders to favor the UAW isn;t meant to penalize the debt holders. Balderdash.

    Well, I guess we just disagree here. I just don't see how moving a group of people who are usually at the back of the line to the front, is an "attack" on those who are usually in front.

    12...The dot com bubble did not start all at once, but ramped up. That is what a chart of Clinton budget results shows.

    No, what the chart of Clinton budget results shows is an expansion of the budget surplus. It does not tie that to the dotcom boom.

    Also, even if it was "ramping up" back in the 1980's, it most certainly was not an economic force to be reckoned with until 1996.

    But if you want to prove me wrong, show me a chart of dotcom expansion as a percentage of GDP for 1993, 1994, 1995 and 1996.

    Second, do not forget that increased employment also increased the Social Security surplus which reduced the deficit.

    Sure, i won't forget it. That's a pleasant side effect of putting more people to work - which also is a good point for Clinton's implementation of Keynesian policy.

    You are also wrong on Gingrich. Gingrich wanted deeper budget cuts than Clinton would accept. It was not over tax rates.

    You're right in that it wasn't over tax cuts, and my memory was wrong. I am perhaps remembering later clamoring for tax cuts...But yes, Gingrich's pursuit was deeper budget cuts. However, the basic Keynesian argument still stands: Clinton wanted to continue these programs at their current level of funding, and also cut taxes for the middle class - which would also increase spending and create more jobs. i.e: basic Keynesian policy. Gingrich did not want this to happen. They went toe to toe and Clinton won - and our economic expansion continued.

    ReplyDelete
  40. 13. No. "Attacked" does not necessarily mean direct action on jobs, but actions in pursuit of one objective regardless of the effect on jobs. If cap and trade, for example, will destroy 2.2 jobs for every one created, that is an "attack" on jobs. I cannot recall any administration being so willing to allow loss of jobs as this one. And that goes back to Ike.

    So, just as I said in my previous example - would it be just as fair to say "George Bush attacked the same companies by following policies that would increase the cost of medicare and devalue the dollar" ?

    If you do not think that would be just as fair to say, then you can see what is wrong in applying a very similar statement to Obama.

    14. R&D occurs now. Obamas disinterest in jobs stops business from taking risk it normally would. Obama has stopped this economy.

    Yes, R & D occurs now. But those jobs "DJ" was originally saying are already existing and ready to be transitioned to, are NOT there right now. So "DJ"'s statement was wrong.

    18. No, if you keep putting things on the credit card, it is eventually canceled.

    Sure, it's not the best thing to do. Nevertheless it is a possibility that was completely ignored in "DJ"'s original article. Therefore DJ was wrong.

    China is quietly buying more gold. What does that tell you.

    That I sure wish Bush hadn't started an unnecessary war AND put through unnecessary tax cuts. If all the money he ran up into deficit was spent on US infrastructure, we at least would have seen jobs, spending, and have something for our money. But Bush was not a Keynesian. Therefore we are depending on China's good graces and have nothing much to show for it.

    ReplyDelete
  41. 19. You "brilliant doctor" example fails because of the impending take over of the medical system and with its reduced income.

    No. That's a whole separate bunch of stuff to disagree with in your statment - but my argument with this particular claim is DJ's **theory**. I.e., that any government funding is **always** parasitical **in essence**, **no matter what**.

    Government is incapable of investing in anything except, maybe, infrastructure.

    OK, so you are disagreeing with "Dj's" original statement right there.

    I will take Friedman, Hayek, and von Mises over Keynes.

    Good for you. I hope whatever works best, whether it be Keynes, Friedman or something entirely new, is put into practice. But as the weight of current evidence and experts goes with Keynes, I'll stick with Keynes.

    20. Drummond merely points out there is a limit to unemployment benefits. At what point is 99 weeks not enough?

    But that is something different than what Drummond said. What I objected to is, as originally quoted at the top of this article, that there is no mention of a ***pragmatic*** reason to keep unemployment going.

    How long is good enough? As long as it takes for the good of the economy - as well as for those affected. 99 weeks may be too long, or too short - but there are clear pragmatic reasons for the entire economy to keep unemployment going. DJ ignored this, hence my response.

    ReplyDelete