As Shlaes’ writes convincingly in her book, WWII had a far greater effect as far as lifting the US out of the Great Depression then did the economic policies of FDR.[/quote]
Alan, correct me if I am wrong. Are you saying government spending coupled with working together for the greater good is what we need?
Isn’t war government spending? That would fall under Keynesian-like stimulus. Hmmm
However, FERs polices did get some people working again and built things of value, when the country was mired in unrest and starvation. Sure, at the time, the prevailing ethos was laissez faire(which ironically was a planned doctrine), so it made his policies very divisive. You can’t use a logic of IF his polices did not fully pull the country out of depression THEN doing X(nothing?) would have been better. It’s just not an argument you can make.
The reason the war further pulled the country out of depression is because it was a SOCIAL cause with direction and a “higher” purpose. It changed the mood and coalesced the country as well as obviously increasing economic activity. Basically the war effort was socialism – people working together for the greater good. Imagine that, socialism pulled us out of depression.
Then, of course, the destruction and rebuild of Europe coupled with suburbanization of the US, built the middle class our manufacturing base and furthered US primacy .
The post WWII rebuild boom dwindled by the late 60s -early 70s and stagnation reared it’s ugly head again.
Which lead to the Reagan/thatcher neo-liberal revolution, globalization, the financialization of everything and bubble economics(which came to an exciting finale with the housing bubble collapse).
Now, we are at another inflection point – where they are stuck in a crisis of creativity focusing mainly on trying to reinflate the bubble with a banking system that is faking it and a populace that is both commodity and debt saturated as well as there being no true engine for job growth.
It’s not a pretty sight and political discourse makes all the more maddening.
The system is too debt saturated where more debt with interest attached to it does not pack the same punch it used to. In fact, it’s getting to the point where it has an inverse effect. Conversely slashing spending ushers in deflation and contraction and all that that entails. Where it stops nobody knows.
