I'm not an economist by any means, as I'm sure someone will point out. However, the regulatory checks brought on by the New Deal have created the richest society in history.

People would do well to remember that somebody has to BUY the products that corporations produce.

David M. Kennedy's book "Freedom from Fear: The American People in Depression and War, 1929-1945" makes the point pretty convincly that the New Deal saved capitalism by introducing healthy and necessary regulation.

The market can't be trusted to handle capitalism safely all by itself.

A lot of the ugliness of Capitalism that used to be present in the US has been out sourced to third world countries.

Do you want to see the scenes that were chronicaled in "The Jungle"? Look no further than many East Asian sweat shops today.

So no, the New Deal didn't clean up Capitalism. It just caused it to export the worst of it's abuses.

Disasters are to be praised because they lead to attempts to ameliorate future disasters?

*yawn*

Sounds like another attempt to save GWB's legacy....

the overall result of the New Deal really was to strengthen markets, not weaken them. After all, Bill Gates is richer than John D. Rockefeller ever was and the worst recession we've had
since World War II would be considered a mere inconvenience by our great-grandfathers.

Kevin, I think you need to take into account how Ronald Reagan saved capitalism with his deregulation of a wide range of industries and therefore inflation and prices went down. How Reagan busted the unions and lowered unemployment because unions no longer placed a stranglehold on the number of jobs people can have. Reagan also saved capitalism by lowering the tax rates so that ordinarly people would have money to spend instead of giving all of the money to the government and welfare queens.

To be picky, John D. Rockefeller was worth $1.4b when he died... or about 1/65th of the GNP, but Gates' was "only" worth about 1/135th of the GNP in 1999. In today's dollars Rockefeller was probably worth more than Gates.

I know this may be stating the obvious, but of course the markets work.

The question is: for who?

Cue our John Bircher trolls venting their ridiculous obsession with Communism in 3...2...

i have no idea what the term "socialization" is supposed to mean, although presumably it's some wimpy way of claiming that the New Deal was a "socialist" enterprise without subjecting Joyner to the scorn he would encounter if he actually claimed that the New Deal was socialism.

but i'm going to scorn him anyhow: what a witless remark.

So no, the New Deal didn't clean up Capitalism. It just caused it to export the worst of it's abuses.

There was quite a long time between the New Deal and the East Asian Sweatshops of today. And those weren't "caused" by the New Deal any more than laws against murder create killers.

It might have been better had someone had the courage to enact the New Deal without having to go through the Great Depression!

William: The share of wealth is spread among many more people. In constant dollars, Rockefeller's wealth was about what Gates' was at the top of the bubble (Rockefeller's 1.4B in 1937 dollars equals ~99.5B today, and Gates briefly surpassed $100B. Sources: westegg.com/inflation, wikipedia). But, there are many more people with more wealth, so percentage compared to then and now isn't really representative on anything, due to population growth.

Of course, the Great Depression was caused by the government itself, not the free-market. You people really need to learn what credit bubbles and crashes are and how they arise.

And the really funny thing is that the Depression lifted as the "overreaching" of the New Deal was largely removed in the late 40's- with the New Deal at its height, the country remained mired in the Depression- and, no, the war did not end it.

The destruction of the New Deal, starting with Reagan, has led to the outsourcing of American jobs to nations without well regulated markets.

I do not care for Mr. Gross' theme, however.

Slavery was good because it led to civil rights?

The polio epidemic was good because it led to Salk?

Hmmmmmmmmmmmm . . .

The disaster in Iraq and 3000 plus American soldiers dead was a good thing because it helped rid the country of an extraordinarily corrupt Congress.

The Katrina disaster was a good thing because it helped us realize how truly incompetent Brown and the Bush administration were paving the way for new leadership.

I bet another market meltdown right now and every American losing their pension would be just perfectly good . . . for something.

Hey, if the Earth were destroyed, it would open up a whole orbit for something good, right?

Well, we could go on and on, couldn't we.

Conservative policy failures are never bad things, eh, because something good always comes out of the horrible pain they inflict - a change to rational, non-destructive policies.

But couldn't we just skip the whole failure thing altogether by admitting that conservative policies are doomed to inflict tremendous unnecessary pain in the pursuit of immoral goals and rejecting them before they become a 'source of good.'

Additionally, the government can take a bath nowadays without fear of drowning.

The New Deal may have had its overreaches, but 70 years later I think everyone not to Tom DeLay's right agrees that moderately regulated capitalism works better than unregulated capitalism, and that framework was what the New Deal provided.

Kevin, you don't seem to get the point of the Bush administration. The whole point of the past six years has been to dismantle the whole regulatory framework. Knowing that they couldn't do it with a frontal assault they have done it stealthily by filling the chicken coups with foxes.

The depression resulted from two or three failures, bank failure, trade policy failure being the two major problems.

The bank failure came from too much concentration of power in one federal banking system, as dictated by our constitution. Note the cure was to give the fed some room to maneuver outside of politicians, not to make it more socialist.

The solution to trade protectionism was the general acceptance that we should avoid it,I.E. take protectionism from congress, not a socialist trend.

Out problem today is still the lack of true competition to the federal reserve system. Has any of you ever wondered why inflation cash from the fed goes to their favorite, large corporations and not to our individual accounts?

The reason the fed steals from the poor and gives to the rich is simply because Gross's gross ignorance about bubbles is widely shared, and the rich have convinced us to print money, giving it to them at our expense.

Think about this. If I have a legal personal bank account; then why am I not connnected directly to the discount window? The discount window the fed operates, and its bond trading, should all lead to money increments that go directly to the individual citizens who gave the bank that power.

We still have too much socialism and that socialism is a socialism of the rich.

Kevin said: Modern economies have a hard time operating efficiently without a fair amount of regulation

I don't agree. Before the handover, Hong Kong's economy was booming, with very little regulation.

What I do believe is that throughout the world government regulators tend to grab more and more power over modern economies. FDR's regulations may or may not have been a net benefit, but they were a lot more benign than the government regulations is Germany and Russia. If FDR saved the US from adopting fascism or communism, then he deserves a huge amount of credit.

Of course, the Great Depression was caused by the government itself, not the free-market. ... and, no, the war did not end it.....Yancey Ward at 1:32 PM

Most historical economists will point to factors such as a highly unequal distribution of wealth as well as government pro-business policies reducing federal income and inheritance taxes. [sound familiar?]

The Great Depression is generally considered to have ended in 1939

...World War II ended both the temporary New Deal programs and the Depression they were attempting to cure. Keep in mind that many facets of the New Deal--Social Security, the Federal Deposit Insurance Corporation and the Securities and Exchange Commission to name only three--have remained features of American life from the 1930s until the present.
War ended the Depression simply because of increased government spending, an intensified version of what Roosevelt was already doing with the WPA and similar programs.. Responding to the external threats posed by the Axis Powers (Germany, Japan and Italy) Roosevelt and the Congress threw fiscal caution to the wind and spent what was necessary to win the war. In so doing, they also achieved pre-Depression levels of employment and prosperity. ...

I've heard that even during the Roaring 20s large chunks of the country were suffering through a decade long recession. Flyoverland didnt even count when most took the train.

yancey, you might do a little homework on gdp growth and american economic history before spouting, incorrectly, that the depression didn't "end" until the late '40s when the New Deal was "lifted."

you are wrong on both accounts.

....I don't agree. Before the handover, Hong Kong's economy was booming, with very little regulation......ex-lax at 1:54 PM

Hong Kong is still booming as is China with all its capitalistic corruption, presuming you like melinine in your food supply.

howard,

I am well aware of all of those things, and it is accepted history that the Depression did not end until the end of the war, but there were aborted attempts at recovery throughout the 30s. Unemployment was in the double digits almost all of the 30s, and only went into single digits when the government basically conscripted the entire population into the war effort.

You may choose to view the production of warplanes, tanks, and other weapons as economic growth, but I do not- people do not consume those as a matter of choice. If it were really the case, then we could have unlimited growth by just increasining government spending whenever we wished, by whatever amount we wished, and on whatever we wished without regard to what people wanted.

No, the Depression did not end until after the war was over, when the economy started growing by producing what people wanted to consume.

We still have too much socialism and that socialism is a socialism of the rich.

Not the first time I heard someone try to redefine oligarchy as socialism.

I don't agree. Before the handover, Hong Kong's economy was booming, with very little regulation.

Very little compared to what? I used to do investment research for investors in East Asian ex-Japan markets, and while the HKSFC and SEHK may not be as regulated as the SEC and NYSE (which in turn aren't the most regulated securities/trading dyad in the First World), they are far more regulated than the US was prior to the New Deal.

In fact, Hong Kong is in many ways one of East Asia's most regulated markets. The real "anything goes" markets are the poorest countries, like China, Vietnam, the Philippines or the notorious buyer-beware market that is Indonesia. Even better-established markets like Taiwan, Thailand, Malaysia or South Korea are much less transparent than Hong Kong. In fact, I'd say that Hong Kong is battling it out for "most regulated East Asian market ex-Japan" with Singapore.

Like Hong Kong, Singapore, despite or perhaps because of its reputation as Capitalism Island, takes its securities regulation very seriously. By way of example, Singapore and Hong Kong have two of the highest rates of arrests and convictions for white collar crime in East Asia -- Singapore's is the highest. It's generally agreed that it's not because they're less honest, it's because white collar criminals in Singapore and Hong Kong get caught.

I like that Yancey is asserting that the US population didn't want to fight in WWII even post Pearl Harbor.

Hint: when people demand war they are also demanding the tools of war.

The quoted article is pretty much compound idiocy. First, as several have pointed out, that something positive followed something truly horrfic doesn't generally make people glad the initial thing occurred -- otherwise, Pearl Harbor was a great day, because it led to the defeat of Nazi Germany.

And then you get the die-hard righties who are still, most of a century later, claiming the New Deal was some sort of disaster -- despite the fact that it made life better for huge numbers of Americans almost immediately, and has, as cited above, cushioned economic downturns ever since (deep recessions, even "panics", were standard fare in the late 19th/early 20th century; those we've had since -- especially under Reagan and Bush I -- were no day at the beach, but infinitely more survivable than the 1890s and early 1930s version).

I also agree that linking outsourcing to the New Deal -- when 30 years of GOP "magic of the marketplace" rule has intervened -- is foolish argument.

Bothering with anything written by Daniel Gross is like paying attention to anything written by Andrew Sullivan. Maybe worse.

As many posters pointed out above, the "we had to destroy the village to save it" analogy is beyond stupid.

It's been said previously in this thread, but wouldn't it be nice if people did the good and right thing before necessity forced them to?

Wasn't there an article posted earlier on someone who thought Enron was peachy keen and there was no problem with it?

Regulations, ironically, can FREE UP markets. One of the reasons the Italian stock market has so few transactions is everyone knows nothing gets sold unless someone has a lock on some secret information, i.e., insider trading. Making sure that nothing is hidden and all the information needed to evaluate the value of a stock is out there for all parties makes far more people willing to play the game.

People are much more willing to take risks if they feel the field is even and there are penalties for those who don't play by the rules. Something even China is going to learn at some point.

You may choose to view the production of warplanes, tanks, and other weapons as economic growth, but I do not- people do not consume those as a matter of choice.

I don't think you've thought this whole "government of the people, by the people, and for the people" thing through very well.

Try again.

Yancey: You may choose to view the production of warplanes, tanks, and other weapons as economic growth, but I do not- people do not consume those as a matter of choice.

People do not consumer education, highways, or waterworks by any greater choice than warplanes, tanks and other weapons - these are all spending "choices" imposed by a representative democracy.

And in economics, growth is growth, whatever the reason.

That the government could sustain any amount of growth it wants limited only by its willingness (and the market's acceptance of that willingness) to tax or incur debt (or both) doesn't mean that economic growth is limited to that created by the production and sale of consumer goods.

Modern economies have a hard time operating efficiently without a fair amount of regulation

Regulation can make markets more efficient by correcting, in part, the ways in which real markets fall short of ideal markets: by internalizing externalities, by making more accurate information available to market participants, etc.

To the extent that regulation does this, it enhances markets. Whether you choose to call this "improving capitalism" or "advancing socialism" is a matter of taste; it is using understanding of markets (both their ideal behavior and their practical shortcomings) to improve the general condition. Not sure that throwing around "capitalism" or "socialism" as labels does much but obscure the point through the emotional baggage (positive and negative) people associate with those terms.

Someone above notes the different dollar amounts of Rockefeller's wealth and Bill Gates's wealth, but that isn't the half. I've seen estimates of the wealth that Rockefeller either controlled or significantly influence amounted to 9% of the GDP at the time. Gates isn't anywhere near that. And if Microsoft got blasted by Martians into atoms tomorrow, another OS would toodle along to take its place in weeks. Not so, as we've learned to chagrin, oil.

Pearl Harbor was a great day, because it led to the defeat of Nazi Germany.

"To have the United States at our side was to me the greatest joy. Now at this very moment I knew the United States was in the war, up to the neck and in to the death. So we had won after all!...Hitler's fate was sealed. Mussolini's fate was sealed. As for the Japanese, they would be ground to powder."--Winston Churchill on Pearl harbor

The New Deal was not a response to the bursting of a stock market bubble, but in response to the Great Depression. The Great Depression was not caused by the bursting of a stock market bubble, but largely by malregulation from central bankers and trade regulators. Geez, if you are going to credit (mostly wrongly) regulation for having ended the Great Depression, you oughta' at least recognize that the regulators largely caused it to begin with.

Yancey, you're now changing your tune a little.

the reason that we call it the Great Depression is because it was a major economic dislocation: there are no circumstances under which it could have ended overnight. hell, we had the shallowest of recessions in 2001 (other than in terms of job losses) and people are still using that as an excuse for economic performance 6 years later.

not every New Deal policy was well-conceived, but those were desperate times, and in the overall, the economic conditions of 1939 were considerably better than the economic conditions of 1933: if they hadn't been, FDR would never have been re-elected in 1940.

Meanwhile, if you're (in Barry Ritholtz's amusing formulation) about to start defining the economy ex-necessary military spending, then your post-world war ii nirvana doesn't look the same either.

Finally, of course, you still have to explain how the New Deal disappeared in 1945....

Having said that, regulation, as cmdicely notes, can be useful when it improves transparency or better internalizes externalities. However, it is rare that the power to regulate can be limited to such tasks. People will always engage in rent-seeking, and regulatory power is just another means by which to do so.

Democrats will always be at a disadvantage.

1. Democrats, in general, are too educated to accept mad rants of someone like Miachael Savage.

2. Deomcratic ideology is in conflict with the simple fact that politics is about money, more so that it was ever before, and so politicians who can win are much wealthier than the people whose interests they are supposed to represent. So what appears to be misplaced focus on the haircuts, the mansions, the ties to Hollywood, is easily explained.

3. Conservatives are bigger assholes.

Will, you couldn't demonstrate that assertion in a hundred years.

Not the Milton Friedman, whose asseertion this is, always resorted to shouting, arm-waving, and brandishing the almost-Nobel prize his student got for him instead of offering anything in support of this assertion.

O.K., cn, feel free to point me to a more cogent, well researched, explanation as to the cause of the Great Depression, other than it being in large part due to malregulation. I will agree that economics is extremely imprecise, which is why I look upon most economic policies engaged in by government as being extremely clumsy.

The New Deal was not a response to the bursting of a stock market bubble, but in response to the Great Depression.

This is, of course, true, and not in dispute, and not relevant, as the discussion above points to economic bubbles, not stock market bubbles. Of course, the two tend to coincide, as the latter is a frequent component of the former (often, its most obvious, easily measurable manifestation), but the two are not the same, and the latter, not the former, is the issue here.

The Great Depression was not caused by the bursting of a stock market bubble, but largely by malregulation from central bankers and trade regulators.

This, OTOH, while still irrelevant, is less clearly true; it presents two potentially mutually reinforcing causes that do not exhaust the set of potential causes as if they were a mutually exclusive, exhaustive list of alternatives. It compounds the irrelevancy of the first observation dangerous—here, the difference between the economic bubble and the stock market bubble is important.

Geez, if you are going to credit (mostly wrongly) regulation for having ended the Great Depression,

No support is offered for your assertion here that the credit is assigned "mostly wrongly" to regulation.

O.K., cn, feel free to point me to a more cogent, well researched, explanation as to the cause of the Great Depression, other than it being in large part due to malregulation.

Since "malregulation" simply means the existence of some regulatory regime other than the optimum, the suggestion that a change in regulatory regime corrected it implies that it was caused, or at least perpetuated, by malregulation, a point which is not in significant dispute.

The problem, of course, is that you seem to want to draw from that that performance would have been better with nonregulation and that therefore the malregulation should be held to be equivalent to too much regulation rather than just the wrong kind of regulation and maybe even, in many important areas addressed eventually in the response, too little regulation.

Yes, the preexisting regulatory regime played a role in the Depression. Every argument pointing to a change in the regime correcting that implicitly makes that point. In the real world, absolute nonregulation of the economy is demonstrably unworkable, the choice is between regulatory alternatives, not regulation vs. nonregulation.

Having said that, regulation, as cmdicely notes, can be useful when it improves transparency or better internalizes externalities. However, it is rare that the power to regulate can be limited to such tasks.

You are a true master of the trivially true and pointless observation. Yes, regulation is generally imperfect, like most human creations. OTOH, its quite possible, and not that uncommon, for regulation to be applied so as to do more good than harm. Certainly, I'd argue that, on balance, all first world and many developing countries regulatory regimes acheive that.

The markets don't seem to be working properly today. From history, this seems to occur when you have good economic fundamentals and easy credit. We have both in my opinion and there will be a correction soon enough.

Yance says: "You may choose to view the production of warplanes, tanks, and other weapons as economic growth, but I do not- people do not consume those as a matter of choice."

Geez, I thought that we ended the Depression in 1939 by selling goods to other countries (a bit of history: we weren't at war in 1939). I guess Yancey thinks that foreign trade is not part of capitalism.

Ah yes, the Great Depression and WWII just mere speedbumps on the freeway to success.

Methinks this is a great example of pontificating by someone who didn't have to live through horrific events.

A just universe would have Mr. Gross standing in a soup line and sleeping under a bridge. Then perhaps he could legitimately write a book telling how great it was.

Gosh, cmdicely, you failed to produce evidence that demonstrates that regulation does more good than harm, just as I failed to produce evidence that it is mostly wrong to assert that regulation ended the Great Depression. Why might that be?

As to what was contended in Kevin's post, you have the usual problems with the meaning of words, which is unsurprising, since you have previously informed me that the meaning of words are of secondary importance to you when evaluating assertions, compared to the creations of your mind, which you refer to as "inferences". As unusually entertaining as encountering you can be, until you seek professional help, I'll decline extended interaction with you. Have a nice day.

Gosh, cmdicely, you failed to produce evidence that demonstrates that regulation does more good than harm,

Because its not something I claimed was, in fact, true, only something that I suggested that, under different circumstance (such as, in a discussion where it wasn't a distraction from the main point I was making), I would be inclined to argue was true in at least a certain set of cases.

just as I failed to produce evidence that it is mostly wrong to assert that regulation ended the Great Depression.

Which, however, you did present as an established, noncontroversial fact that was so clear that people should be berated if they fail to acknowledge it.

See the difference?

[...] since you have previously informed me that the meaning of words are of secondary importance to you when evaluating assertions, compared to the creations of your mind, which you refer to as "inferences".

Ah. I see you are resorting to baldfaced lies again, fun.

As unusually entertaining as encountering you can be, until you seek professional help, I'll decline extended interaction with you. Have a nice day.

Buh-bye. Don't feel obligated to return to soon.

everyone not to Tom DeLay's right agrees that moderately regulated capitalism works better than unregulated capitalism

I guess the goons in charge for the last six years are to the right of Tom DeLay then.

ex-liberalI don't agree. Before the handover, Hong Kong's economy was booming, with very little regulation.

Hong Kong also has socialized medicine. And a really really bad air and water pollution. You can feel the soot on your teeth.

cminus: [Hong Kong had] Very little [regulation] compared to what? [Hong Kong had] Very little [regulation] compared to what?

Compared to PRC, for example. I was there with a group of insurance people about 15 years ago. At that time it was almost impossible for a foreign insurance company to do business in PRC. There were only 7 insurance ompanies serving the entire country

What?!

"Rockefeller's net worth over the last decades of his life would easily place him among the very wealthiest persons in history. As a percentage of the United States economy, no other American fortune—including Bill Gates or Sam Walton—would even come close."

This is how cmdicely describes how he (or she) communicates with other human beings.....

"It could be concluded that when I attribute to you a belief like that, I am doing so as an inference from your posts, not stating that that is the literal, denotative meaning of the words you post."

....thus demonstrating that the actual meanings of the words written are not the primary factor by which cmdicely attributes beliefs to others. It can thus be concluded that cmdicely is either dishonest or insane. I am trying to be charitable here, so I merely conclude that cmdicely is off his or her meds.

cmdicely, when you get back under medical supervision, I'll be happy to converse with you.

This is how cmdicely describes how he (or she) communicates with other human beings.....

"It could be concluded that when I attribute to you a belief like that, I am doing so as an inference from your posts, not stating that that is the literal, denotative meaning of the words you post."

As that quote explicitly states, it is not describing "how I communicate with human beings", in any broad sense, but why I attributed specific kinds of beliefs to you in a particular context.

So, from the outset, you are lying.

....thus demonstrating that the actual meanings of the words written are not the primary factor by which cmdicely attributes beliefs to others.

Uh, no, thus demonstrating that the belief being discussed was inferred from what was said, not claimed to be what was said. There is nothing there about "primary factor", or anything from which that could be reasonably inferred.

It can thus be concluded that cmdicely is either dishonest or insane.

Well, you've certainly demonstrated that someone is dishonest. Just think you missed your mark on who.

cmdicely, when you get back under medical supervision, I'll be happy to converse with you.

You seem to address me directly quite a lot for someone who is claiming not to be willing to converse with me.

Basket weaving begins soon, cmdicely. Ignore the voices.

cmdicely, when you get back under medical supervision, I'll be happy to converse with you.

CMD isn't insane; he's just inane. In any case, I agree that it is a waste of time conversing with him.

CMD basically likes to argue just for the sake of arguing, which in addition to being inherently dishonest, usually takes him into the realm of ridiculously insipid semantic arguments, which never gets anyone anywhere, and which I personally find more repugnant than the typical fair served up here by wingnuts. It's one thing to not know the difference between true and false; it's quite another to alter the semantic topology to convert a false statement into a true one.

Yeah, well, when it got to the point where it was stated that the meaning of the words I write was not the basis by which a belief had been attributed to me in this forum, I thought I'd limit my conversation with such a person, mostly just to point out that cmdicely had made such a statement of preference.

Will,
You have been called out a couple of times already in this thread for any support to your depression caused by malregulation statement, yet consistently refuse to provide any link or reference. Instead, when cmdicely brings specific arguments against your assertions, you basically just respond by calling him names. Such a quick refuge in ad hominem indicates to me that your argument is weak or non-existent.

FDR: "We had to struggle with the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. ... Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred.�

And it's taken 60 years for those forces - business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering - to reassert their control, to complete its hostile takeover of the government and to pervert the regulation of the markets to their own advantage (rent-seeking, as Will Allen correctly indicates, is a powerful force.)

As to whom the market and government really serves:

'Do those at the top pay their fair share of taxes? Middle class Americans, after nearly 30 years of tax-cutting, are now paying about the same share of their incomes in federal taxes that they paid before Ronald Reagan entered politics. In contrast, America's richest have seen the share of their incomes that goes to federal taxes cut by over half. That what happens in a failed democracy and the rich control the political system.' - Joel S. Hirschhorn

And there's this tiny problem with the dollar and our reliance of imports:

http://www.financialsense.com/fsu/editorials/
dorsch/2007/0501.html

"A nickel ain't worth a dime anymore." - Yogi Berra

McDruid, I have on more than one occasion referenced Friedman and Schwartz's "Monetary History of the United States, 1867-1960" as providing the most cogent explanation of the Great Depression. It is imperfect, but if you have better research to cite, please do so, and please stop lying.

Finally, when I cite cmdicely asserting that he attributes beliefs to a person in this forum not on the meaning of the words the person writes, but rather on what cmdicely creates in his mind, one can only conclude that cmdicely is either dishonest or insane. I'm only being charitable, and there is nothing ad hominem regarding charity.

Double Decoupling
The rest of the world's major economies no longer depend on America's. Neither do America's own largest corporations.

By Robert B. Reich
Web Exclusive: 05.02.07

I'm spending my spare time these days debating supply-siders who are convinced that the record-breaking Dow proves the correctness of the Bush tax cuts.

Yes, the Dow did reach a record high last week. But the Commerce Department also reported that economic growth slowed to its weakest pace in four years. How can investors do so well while the real economy is doing so poorly? My supply-side friends don't have an answer, but I do.

It's because of two great decouplings that have occurred in recent years. First, the rest of the worlds' major economies have decoupled from the United States economy. China, India, Japan, and Europe are now such large markets they can grow briskly even as America slows.

Second, America's largest corporations have decoupled from the United States. Their overseas subsidiaries are booming even as their American operations stagnate. General Electric expects more than half its revenue this year to come from outside the United States for the first time. More than half of Boeing's new orders are from overseas. Ford is struggling in America but doing well in Europe.

In other words, the president's supply-side tax cuts are great for America's global investors, who have been investing their extra money around the world -- either in foreign companies or in global American-based ones.

But little or nothing is trickling down to average working Americans. Half of U.S. households do own some shares of stock, usually through their IRAs or 401-Ks. But the vast majority own less than $5,000 worth. Their equity is in their homes, whose values have slumped. They're paying far more for health insurance and fuel. And their wages haven't kept up.

Bottom line: The Bush tax cuts have delivered for Wall Street but done zilch for America's Main Streets.

http://www.prospect.org/web/page.ww?section=
root&name=ViewWeb&articleId=12739

CMD basically likes to argue just for the sake of arguing [...]

I think you are, as your chosen handle suggests, projecting here, "Disputo".

[...] which in addition to being inherently dishonest, [...]

There is nothing inherently dishonest to argument for argument's sake; one engage in that without ever stating anything one does not honestly believe to be true.

[...] usually takes him into the realm of ridiculously insipid semantic arguments, [...]

I will confess to sometimes descending into rather fine semantic points, sometimes because of particular pet peeves; where these are tangential to the essence of the discussion I try to make clear that I understand that they are tangential.

Sometimes they are important, because they reveal that there is a fundamental equivocation underlying a position, or because the issue is one where technical definitions (as in law) are inherently important.

But I don't think that "usually" even remotely approximates the frequency of even those fine semantic points (much less any fairly described as "ridiculously insipid").

Yeah, well, when it got to the point where it was stated that the meaning of the words I write was not the basis by which a belief had been attributed to me in this forum

I never said that.

I said that the attribution of the belief was not a characterization of the meaning of those words, not that the meaning of those words was not the basis of the attribution of the belief. Those are very different statements. In fact, I said the meaning of those statements was the basis of the attribution: perhaps you need to learn what it means to infer something from something else. Or, more likely, you just need to learn how to tell the truth.

Finally, when I cite cmdicely asserting that he attributes beliefs to a person in this forum not on the meaning of the words the person writes, but rather on what cmdicely creates in his mind, one can only conclude that cmdicely is either dishonest or insane.

Well, when you characterize my quote which did not say that as saying that, I suppose we can, then, conclude that you must be either dishonest or insane.

Will, you are a jerk, aren't you? I specifically said "in this thread." You made a statement here, back it up here. If you think your reference is redundant because you mentioned it in some other obscure place, then likewise, your argument must be redundant, so don't post it here.

I should also point out Will, that (by my understanding) you are blaming "malregulation" for what Friedman claims is the inaction of the Federal Reserve. Two points on this: the first is that "regulation" is generally not regarded as the same thing as action or inaction of a government entity, so that your choice of words is inappropriate. Secondly, cmdicely's point was that you imply that government action was the problem rather than government inaction.

For example, I note that your first response to a counterclaim on your argument is to say that: "most economic policies engaged in by government as being extremely clumsy." This implies, along with your original post at 3:11, that it was a positive action (rather than doing nothing) on the part of the government that deepened the Great Depression.

cmdicely wrote: perhaps you need to learn what it means to infer something from something else

Oh, I don't know, cmdicely; Will does that all the time -- declaring what a commentor must believe based on an interpretation -- usually dishonest -- of what he or she wrote.

It's just that in Will's world, he's the only one who gets to do it.

Or, more likely, you just need to learn how to tell the truth.

Now you're talking.

Actually, Mcdruid, Friedman and Schwartz's work is referenced in this thread, by another poster who responds to me, by disputing the validity of said work. The reference is rather obscure however, so it is unsurprising that it was overlooked. If you don't think the very existence of a central bank constitutes regulation, fine.

As to others here, when it is stipulated that words have meanings, and the literal, denotative, meaning of the words are not to be ignored, as cmdicely did in the thread I referenced, when he created something out of thin air, and called it an "inference", then I'll reply substantively (well maybe not; gregory so seldom writes anything other than invective that it would be pointless). Until then, it is better to deal with them as one would a poor soul one encounters while the unfortunate person is pushing a shopping cart filled with debris, and is muttering to himself.

Until then, it is better to deal with them as one would a poor soul one encounters while the unfortunate person is pushing a shopping cart filled with debris, and is muttering to himself.

Funny...that's how I feel when I see posts by you loony libertarians, Will.

As for invective, your statement presumes that your comments are deserving of anything but. Like just about everything else you post, Will, it's an assertion with precious little to back it up.

Have a nice day.

When did I join the libertarians, Gregory? Is there any end to the vapors which control your thoughts?

When did I join the libertarians, Gregory?

But I protest! You sya "join the libertarians" as if I suggested your membership in some formal organization, as opposed to simply adhering to a stunted, bankrupt worldview. But I forget, Will -- you're the only one who gets to draw "inferences" in Willy World.

Let's see if I have the measure of you, Will (oh, hell, I might as well come clean -- of course we here in these forums do; all we needed was a pair of calipers):

*Overt hostility toward government
*Near-religious faith in the free market
*Adherence to Friedman's, ah, philosophy (there's the tell, my boy)
*Profoundly stunted social skills
*Narcissism to spare
*A vastly overinflated opinion of your own intelligence and debating prowess (you'll note your slippery "malregulation" rhetoric got seen through immediately)
*A heapin' truckload of intellectual dishoensty
and on that last note, let's not forget:
*Oddly, ah, coincidental alignment with the Republican Party

Smells like a loony libertarian to me. But hey, don't take my word for it! As always, Will, I'm happy to let my statements on these threads, and yours, stand to the judgment of the readership. If you share that confidence, you'll forego your usual obsession with getting the last word. I wonder if you will.

Stop lying, Gregory. Of course, that is tantamount to asking you to stop posting. When did I ever profess faith in a free market? I have in this forum asserted that state run bureaucracies, because they are far less likely to cease to exist, because they can obtain more capital via state power, at the behest of politically powerful minorities, are less likely to operate in a manner which best serves the greatest number of people. The two sets of beliefs aren't even close to being synonymous. Nor does it entail an overt hostility towards governemnt. In fact, I've repeatedly said here that there are functions that the state, and only the state should perform. You really lie too much.

Regarding Friedman, I've mostly expressed admiration here for the abovementioned work, a view shared by such "loony libertarians" such as Paul Krugman and Brad Delong. Your brain doesn't function very well, gregory, but make no mistake, I don't perceive the inadequacy of your mind as lending any evidence to the quality of mine.

As to stunted social skills, how 'bout a little wager? If we can find a neutral judge to pick out fifty interactions that we have each have had
with someone with differing political views in this forum, and judge whether it is you or I who is more consistently hostile and willing to use invective without it having been provoked by the other conversant's use of invective first, I'd be happy to take such a wager the you, by a wide margin, are far mor willing to initiate such language.

You have about as much tolerance for divergent viewpoints, and are about as socially skilled in encountering such differences of opinion, as a
political officer in the old Soviet Red Army. You are a thug to nearly everyone you encounter here, if they dare engage in what you deem incorrect thought.

Really, Willy?
You were very quick to call me a liar for - correctly - pointing out that you had not referenced your argument on this thread. Perhaps you were embarrassed because your paraphrase of Friedman was, apparently, substantially different from what he wrote.

You also continue harp on some long-past one-liner by cmdicely, and, instead of coming up with real arguments to support your position, constantly use that as a reason to not support your position.

But, no doubt, I made the same mistake as cmdicely. I made the inference, from your two remarks mentioned earlier, that you believed the problem with the Depression was too much intervention by the government. Your statement that the existence of a central bank is a type of regulation affirms this. However, despite repeated discussions of this very point, you refuse to be forthcoming, so I can understand why cmdicely did, as I did, require the use of inference to figure out where you stand.

Gregory, aren't you doing what you accuses Will Allen of? You call Will narcisstic with stunted social skills, but don't have any examples in this thread to back it up.

Mcdruid, please explain how I've misrepresented Friedman's views. What I stated was that malregulation was the primary source of the Great Depression. There are no other inferences to make.

Regarding, cmdicely, I cosistently stated that I don't really wish to engage someone who has told me that he will attribute beliefs to me not based on the literal meanings of the words I write, but based on something he creates in his mind, which he falsely called, in the thread I cited, an "inference". There really is no point in extended discussion with such a person, because he has plainly shown in the past that he will ignore what has been written, simply make things up, and call it an inference, without any regard to logic. I decline.

By the way, Mcdruid, I should apologize for asserting that you were lying when you said I had not cited Friedman and Schwartz's work, or any other, as a source for the assertion that malregulation was the primary cause of the Great Depression. I should not have said you were lying, but rather that you were only technically correct, as the work had been cited in the thread, in a derisive tone, by another poster who disputed my views on the topic.

Then again, I did respond to that poster by saying the work he referred to was the most cogent explnation of the Great Depression. However, my reference was obscure as well, so your statement perhaps was not a lie, but rather a mistake.

Regarding, cmdicely, I cosistently stated that I don't really wish to engage someone who has told me that he will attribute beliefs to me not based on the literal meanings of the words I write, but based on something he creates in his mind, which he falsely called, in the thread I cited, an "inference".

Except, of course, I never said it was not based on the literal meanings of what you said. I said it was an inference from them, not a description of the literal meanings of what you said. There was nothing false about that, and your repeated lie that I said it was not based on the literal meaning of what you said is, well, amusing in the irony of your use of it to call me "dishonest or insane".

Yes, cmdicely, you created something in your head, without logical basis from what I had written, called it an inference, and attributed a belief to me, regardless of the fact that nothing I had written demonstrated such a belief. Out of a desire for civility, I'll conclude that you are simply, to adopt a phrase, batshit crazy, as opposed to the alternative. Now run off and take your meds.

1920s stock bubble was a good thing because it helped pave the way for the New Deal.

I suppose that you could say that measles epidemics were good things because they led to the measles vaccine. Or that cholera epidemics were good because they led people to work for clean water supplies.

"Bubbles" are imperfections in markets. It's peculiar to say that they are good because they lead to searches for solutions.

What I stated was that malregulation was the primary source of the Great Depression.

Unfortunately, we can't really know that because we lack the ability to do economic experiments on that scale. If we could do them, we could set up a bunch of Great Depressions, and check one by one which supposedly bad decision led to the recession, and which supposedly good decision would have ended it more quickly. As it was, we are stuck with a post hoc ergo propter hoc argument. The Feds did such and so and the Depression was the worst ever. But it might have been anyway because Europe had exhausted its wealth in the Great War; and the American banking system was in collapse; and the agricultural system was in collapese; and so many other things occurred at the same time.

I know that Milton Friedman was convinced, and others, including some that don't respect him greatly. Of the industrialized nations, the U.S. suffered the least from the Great Depression. That might be because of the "malregulation". Without malregulation there might have been total collapse and revolution. We don't know that either.

Al: I think you need to take into account how Ronald Reagan saved capitalism with his deregulation of a wide range of industries and therefore inflation and prices went down.

That was Carter.

I explained this before, Will. You now claim that the very existence of a central bank is "malregulation." You go on to imply, in a subsequent posting, that it is government action that caused the deepening of the depression.

This does not seem to be what Friedman wrote. Apparently, his thesis was that the fault of the central bank lay in inaction. If so, then he implicitly supports the idea of a central bank, as well as supporting the idea of government intervention in parlous economic times.

I do appreciate the apology, it is so rare in blogland to get such.

No, macdruid, I said a central bank was by it's very existence regulatory, thus any behavior by a central bank which greatly increases the chances of a Great Depression is an example of malregulation. Friedman's opinions regarding the value of central banking were not constant. In any case, it is notable that the panics prior to the creation of the Federal Reserve never led to what was seen in the Great Depression. It doesn't prove anything definitively (you are right, Matthew, that hardly anything ever gets proved definitively in economics), but there is some reason to think that panics or recessions come and go, but to have a depression, idiot central bankers are an absolutely required ingrediant.

Although one of the functions of the Federal Reserve is, in fact, regulatory, the aspect criticized by Friedman in the source you cite, is not. Uncle Milty may have changed his mind, but it behooves you to cite the source that supports your argument.

Apropos of nothing, I have suddenly remembered that I actually spoke briefly to Uncle Milty way back in college. I haven't thought of that in years.

Please, explain, McDruid, how what Friedman criticized was not regulatory in nature. Our dispute may lie in your more narrow, technical, view of the term "regulation".

Friedman proposed that the Fed lend to the banks or buy government bonds. Now this may be "regulatory" in the sense that it controls the economy, it is not "regulatory" in the more appropriate sense of "A regulation is a legal restriction promulgated by government administrative agencies through rulemaking supported by a threat of sanction or a fine." (Wikipedia - similar definitions found in your local dictionary).

If you meant to use it in the first sense, you are guilty of sloppiness and indeterminancy of language. If you meant it in the second, you are flat out wrong.

I should point out that the second sense is the more common one as well as being the more relevant one in this circumstance.