The following large excerpt of Buchanan's piece describes concisely and accurately what cause the Great Depression and what ended the Great Depression with the use of clear logic:
Indeed, in 1932, FDR lacerated Hoover for having presided over the "greatest spending administration in peacetime in all of history." His running mate, John Nance Garner, accused Hoover of "leading the country down the path to socialism." And "Cactus Jack" was right.
Terrified of the bogeyman that causes Ben Bernanke sleepless nights – deflation, falling prices – FDR ordered crops destroyed, pigs slaughtered, and business cartels to cut production and fix prices.
FDR mistook the consequences of the Depression – falling prices – for the cause of the depression. But prices were simply returning to where they belonged in a free market, the first step in any cure.
Obama is repeating the failed policies of Hoover and FDR, by refusing to let prices fall. Obama, with his intervention to prop up housing prices and Bernanke with his gushers of money to bail out bankrupt banks and businesses are creating a new bubble that will burst even more spectacularly.
The biggest myth, writes Woods, is that it was World War II that ended the Great Depression. He quotes Paul Krugman:
"What saved the economy and the New Deal was the enormous public works project known as World War II, which finally provided a fiscal stimulus adequate to the economy's needs."
This Nobel Prize winner's analysis, writes Woods, is a "stupefying and bizarre misunderstanding of what actually happened,"
Undoubtedly, with 29 percent of the labor force conscripted at one time or another into the armed forces, and their jobs taken by elderly men, women and teenagers with little work experience, unemployment will fall.
But how can an economy be truly growing 13 percent a year, as the economists claim, when there is rationing, shortages everywhere, declining product quality, an inability to buy homes and cars, and a longer work week? When the cream of the labor force is in boot camps or military bases, or storming beaches, sailing ships, flying planes and marching with rifles, how can your real economy be booming?
It was 1946, a year economists predicted would result in a postwar depression because government spending fell by two-thirds, that proved the biggest boom year in all of American history.
Why? Because the real economy was producing what people wanted: cars, TVs, homes. Businesses were responding to consumers, not the clamor of a government run by dollar-a-year men who wanted planes, tanks, guns and ships to blow things up.
8 comments:
I think it is pretty damn clear that the service men and soldiers came back to spend their incomes and that Pat Buchanan is a moron.
1946 is when they all returned, en masse. That they wanted to spend their saved income on houses, cars, and TVs is not a surprise.
Lol because I'm sure they didn't use that money during the war to support their families or spend over seas. . .I'm sure they save it all!
Can you provide any real proof to support this silly theory?
First of all, Josh, many, many of the soldiers were unmarried, young men, so, yes, many, many of them returned home with lots of money saved. Secondly, as anyone with even the smallest knowledge of WWII would know, women took the factory jobs of the men while they were fighting overseas. So many of the wives paid for their own living expenses as their husbands saved part or all of their military income.
http://www.usmm.org/barrons.html
So basically, Joshua, whenever you hear a conservative or libertarian say "WWII didn't get us out of the Great Depression", they are LYING or IGNORANT.
The government paid a spouse allowance to servicemen.
The army paid for most basic living costs, hence increasing the serviceman's disposable income in comparison to the average American civilian.
Sure, they spent money on boozing and women when they could get the chance (depending on personality and cultural background), but to say they spent all their money and didn't save is to misunderstand the times. In those times, people saved more, because that was the received wisdom. Moreover, WWII was a bed of roses. A majority of servicemen didn't have a lot of down time to spend their incomes, so their incomes were deposited in their banks or paid to them, and never spent. THINK ABOUT IT>
Again, WWII, just like trade unionism in general, opened up the tax dollars/dollars of the rich to the classes without money. This redistribution of wealth created the greatest economy ever known, an economy you are dedicated to destroying because you are too stupid to understand facts.
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