Yeah that's one of my favorite things to talk about. Honestly, if we went and bombed the Japanese, Chinese, EU, Russia, India, Pacific Rim economies, etc. flat, then we could pay for the current debt. Well, not really because there would be no one left to buy from us.
The world had 5 major industrial plants in 1937: American, British, Central European, Japan, and (being generous) the USSR. So by 1950 the following had happened:
British: bombed, then the remains were nationalized by the Labour government. Cue massive devaluation of the pound sterling and other economic bad things. Food rations continued until the mid 50s, IIRC.
Central European: Bombed flat, including the transportation network, then conquered, with half going over to communist control as the spoils of war.
Japanese: Bombed, then burned, then nuked.
USSR: Halfway destroyed by war, then communist mismanagement.
Meanwhile America did not lose a single piece of industry to enemy action, and they are the only place in the world to produce things. In 1948, something like 90% of everything new in the world was made in one of the states bordering the Great Lakes. The incredibly highly paid workforce that resulted was then considered the norm, when in fact it is an anomaly, the result of war's devestation. Attempts to codify the happy accident as a matter of law via various economic controls failed. There was a time, remember, when Detroit was considered to be one of the world's great cities.
In fact some people think that the high standards of living experienced by the whole West since the end of WW2 are an accident of history rather than the norm. They occurred because the West was the only significative producer of many goods and service in the world.
Now that is not true anymore: there is competition from China, and SE Asia, and there are more rising powers such as India and Brasil. We are probably going towards a lowerinf of living standards in the West, and a levelling on the world scale.
jsid-1285245017-973New Jovian Thunderbolt at Thu, 23 Sep 2010 12:30:18 +0000
Ah, the Cargo Cult of Keyneseans... "If we just spend as FDR did in 1932-1944... everything will be ok now."
Yeah that's one of my favorite things to talk about. Honestly, if we went and bombed the Japanese, Chinese, EU, Russia, India, Pacific Rim economies, etc. flat, then we could pay for the current debt. Well, not really because there would be no one left to buy from us.
Britt:
Not quite arguing with you, but I think there IS a possibility we can get out of this hole IF we stop digging - because everybody ELSE is so much worse off. If we're still the best place, then we can be the place where the innovation and wealth is created.
That, like Mark's belief that having hundreds of millions of people killed, displaced and sold into slavery, means that FDR was "right" since *we* came out of it fine, isn't a IMO, honorable plan.
I'm almost totally down on the "there is no hope" side of things. I just don't see politically that it is possible to cut the entitlement schemes before they ruin us all. One of the things that I do give W enormous credit for is trying to do something about Social Security. That showed the kind of foresight that you rarely see in politicians. Then the Dems blew on the dog whistle and out came the Grey Brigades to save "their" money. Can't touch Medicare or Medicaid, or welfare for similar reasons. So then what? Government has to shrink. Not freeze, or grow slower, but shrink. Except no one since Warren G. Harding has managed to pull that off. I don't think it can be done before we get into at least partial societal breakdown. The monkey on our back is just too big and mean to dislodge easily.
That law includes things like means testing for Medicare B and higher fees for wealthier people. Which are steps in the right direction, IMO. Social safety nets are something I'm opposed to philosophically, but practically are politically inevitable. Anything that moves entitlements from "everyone gets them, even those who don't really need them" towards a true safety net is a good thing. Especially when you consider the advances in prescription medication mean that it is often cheaper to give medicine for problems which required surgery 20 years ago. So if there was no Part D, you'd see people on Medicare who needed a medical problem fixed doing so with an expensive surgery because their out of pocket costs for surgery were lower then their out of pocket costs for medication. Even though the cost to the taxpayer would be lower with a prescription. So I think that was part of the goal of Part D: lowering total Medicare costs by allowing medicine to take the place of surgery in a lot of Medicare cases.
This comes back around again to the Grey Brigades: they own the country, politically speaking, because they exercise an absolute veto on touching Social Security or Medicare. They've been told that all those FICA taxes went into a piggy bank, and they believe it. Telling them that the piggy bank doesn't exist, that it's been raided for decades means nothing to them. Telling them it's impossible for X workers to support X retirees in the style to which they're accustomed does not sink in. They reject reality, because it's too horrible to contemplate. It will work for them, the cracks can be papered over for most of my lifetime, and thus the people who are now blocking the desperately needed reform will all be long dead when the turbine runs out of gas.
You know, this whole thing might be ok if the damn liberals had gone for a big family policy along with their Ponzi schemes. If Baby Booms had been the new norm, the pyramid schemes would have worked. If a combination of tax policy and propaganda had gone toward keeping families large, then we could pay for all this. As it is, we need to either cut the scams down to the bone, or import large numbers of taxpayers. Yet instead of headhunting the best and brightest from all over, the Democrats want to import 20 million peasants from Mexico to turn Texas blue and give them a permanent majority.
Oh, Marxy's been told this multiple times. I saw that little gem, but was on my phone, so by the time I got home the response to it on that epic thread would have gotten lost.
"But they have run much higher debt in the past and we've come through it just fine."
Yes, like the 40's through the mid 50's.
Taken from an accounting perspective you are comparing apples to rocks.
Debts due to a world war in which we financed half the materiel used to fight that war.
This was followed by a economic boom due to the fact that most of the worlds economies had been bombed into ruin and those that hadn't were indebted to us for loaning them guns and ships and tanks and bombs (or they were the soviets who couldn't run a profitable operation of selling pre-formed gold ingots).
From a business perspective we currently are in competition with every other economy in the world. And we have the disadvantage of much higher labor costs. So to an investor or loan officer our P&L sheet and debt to income ratio has to show a reasonable degree of solvency.
In the post war years that reasonable degree had a lot more latitude since the entire world needed widgets of all sorts, and we were the only source of the worlds widgets for the next five to fifteen years. From an investors point of view that monopoly looked pretty good.
The times have changed, the situation has changed and unless you are advocating that we start carpet bombing the industrial centers of Europe and Asia again you have to stop using this comparison. It just ain't valid.
I told him another time, don't know if it was here or there, and I can't find it now. DW told it to him on this post:
Mark, you know the circumstances after WWII, I don't know why you willingly act like you don't. The up and coming new kid on the block managed to survive a world war, with next to zero damage to its infrastructure or manufacturing capacity. Additionally, the magical appearance of Rosie the Riveter suddenly doubled our available work force just in time to capitalize on our assets. Manzi explained that in terms that are clear. Remember? Jim Manzi?
Funny thing is - well, not funny, funny - more like ahh, it's marxy funny, is that marxy never did so much as acknowledge any of these comments. Not a disjointed disagreement or a illogical refutation to be had.
He just keeps plodding on, post after post, spouting the same ole song and dance.
Funny thing is - well, not funny, funny - more like ahh, it's marxy funny, is that marxy never did so much as acknowledge any of these comments. Not a disjointed disagreement or a illogical refutation to be had.
He just keeps plodding on, post after post, spouting the same ole song and dance.
" Without a market to sell to we'd have crashed right back down. But that market was there, and it needed what we could make."
I'd just like to point out your own fallacy above. Products are paid for by production. Therefore, the fact that our economy entered a post war boom is not because the rest of the world was destroyed and "needed" to be rebuilt, but rather that with the end of the war, people in those countries were much more able to produce and trade with us. Without the ability of those countries to produce products of their own, there would be no trade.
In other words production comes before trade, many african countries have great need for many modern products, but since they fail to produce anything of value there is no market there.
It's a subtle but important difference, people tend to draw the wrong conclusion that war helped our economy, and that wars in general are good for an economy, but that is not the case. War is nothing but destruction, even when it leaves your country untouched, and people who think otherwise are falling for the "broken window fallacy" made popular by Bastiat.
OK, let me rephrase: Our economy entered a post-war boom because the rest of the world was pretty much wrecked, but could afford to rebuild, with us financing their rebuilding.
I am humbled and honored to have been quoted out of all those fine comments by the folks that I cited therein. Thank you, Kevin. I shall link you on my blog: http://www.thecompostfiles.blogspot.com and add you to my blogroll.
I've mentioned this in a previous post (regarding Markadelphias method of discussion) and I'll air it again.
How about "Unturing" to give it a title - Markadelphia has definitely failed the Turing Test (IMHO) as he's demonstraly replaceable by a random, left wing phrase generator. (The Dilbert website used to have a random Mission statement generator that put together random words to produce high minded sounding gobbledegook. Markadelphia is the same. so I conclude that he's actually a computer and not human).
So vote for Unturing as the adjective as he Unturs all the time ...
A major factor in the rebounce after WW2 was the effective removal of an entire productive generation from the workforce, in this case the welfare lines.
That was great for unemployment numbers, which must have been good for the government balance sheet.
Note:
All avatars and any images or other media embedded in comments were hosted on the JS-Kit website and have been lost;
references to haloscan comments have been partially automatically remapped, but accuracy is not guaranteed and corrections are solicited.
If you notice any problems with this page or wish to have your home page link updated, please contact John Hardin <jhardin@impsec.org>
JS-Kit/Echo comments for article at http://smallestminority.blogspot.com/2010/09/this-needs-comment.html (23 comments)
Tentative mapping of comments to original article, corrections solicited.
He doesn't stop because he's a troll.
We have different definitions for "troll." JadeGold is a troll. MikeB is a troll. Markadelphia is a Useful Idiot.
Yeah that's one of my favorite things to talk about. Honestly, if we went and bombed the Japanese, Chinese, EU, Russia, India, Pacific Rim economies, etc. flat, then we could pay for the current debt. Well, not really because there would be no one left to buy from us.
The world had 5 major industrial plants in 1937: American, British, Central European, Japan, and (being generous) the USSR. So by 1950 the following had happened:
British: bombed, then the remains were nationalized by the Labour government. Cue massive devaluation of the pound sterling and other economic bad things. Food rations continued until the mid 50s, IIRC.
Central European: Bombed flat, including the transportation network, then conquered, with half going over to communist control as the spoils of war.
Japanese: Bombed, then burned, then nuked.
USSR: Halfway destroyed by war, then communist mismanagement.
Meanwhile America did not lose a single piece of industry to enemy action, and they are the only place in the world to produce things. In 1948, something like 90% of everything new in the world was made in one of the states bordering the Great Lakes. The incredibly highly paid workforce that resulted was then considered the norm, when in fact it is an anomaly, the result of war's devestation. Attempts to codify the happy accident as a matter of law via various economic controls failed. There was a time, remember, when Detroit was considered to be one of the world's great cities.
And notice the utter lack of comprehension of the human cost that took for us to "end up in great shape."
Or, in other words, what it took for those interventions to succeed.
Also notice that the massive war related spending ended as the war effort ceased. Followed by paying off those debts.
Now, there's no end of spending in sight, let alone any consideration of paying down debts.
In short, the war spending was TEMPORARY, the Obama spending is (supposed to be) PERMANENT.
Here's a clue Mr. Scattergories: The two are NOT the same.
In fact some people think that the high standards of living experienced by the whole West since the end of WW2 are an accident of history rather than the norm. They occurred because the West was the only significative producer of many goods and service in the world.
Now that is not true anymore: there is competition from China, and SE Asia, and there are more rising powers such as India and Brasil. We are probably going towards a lowerinf of living standards in the West, and a levelling on the world scale.
Ah, the Cargo Cult of Keyneseans... "If we just spend as FDR did in 1932-1944... everything will be ok now."
He doesn't stop because there are no consequences for his actions here.
Well, the consequences are verbal, but the running gag here has been the punchline of an old joke:
"You're not here for the hunting, are you?"
Yeah that's one of my favorite things to talk about. Honestly, if we went and bombed the Japanese, Chinese, EU, Russia, India, Pacific Rim economies, etc. flat, then we could pay for the current debt. Well, not really because there would be no one left to buy from us.
Britt:
Not quite arguing with you, but I think there IS a possibility we can get out of this hole IF we stop digging - because everybody ELSE is so much worse off. If we're still the best place, then we can be the place where the innovation and wealth is created.
That, like Mark's belief that having hundreds of millions of people killed, displaced and sold into slavery, means that FDR was "right" since *we* came out of it fine, isn't a IMO, honorable plan.
But it might be the best we've got.
I'm almost totally down on the "there is no hope" side of things. I just don't see politically that it is possible to cut the entitlement schemes before they ruin us all. One of the things that I do give W enormous credit for is trying to do something about Social Security. That showed the kind of foresight that you rarely see in politicians. Then the Dems blew on the dog whistle and out came the Grey Brigades to save "their" money. Can't touch Medicare or Medicaid, or welfare for similar reasons. So then what? Government has to shrink. Not freeze, or grow slower, but shrink. Except no one since Warren G. Harding has managed to pull that off. I don't think it can be done before we get into at least partial societal breakdown. The monkey on our back is just too big and mean to dislodge easily.
One of the things that I do give W enormous credit for is trying to do something about Social Security.
Then WTF was with Medicare Part D???
"Compassionate Conservatism"
It comes before "Good Capitalism" in the dictionary, donchaknow.
That law includes things like means testing for Medicare B and higher fees for wealthier people. Which are steps in the right direction, IMO. Social safety nets are something I'm opposed to philosophically, but practically are politically inevitable. Anything that moves entitlements from "everyone gets them, even those who don't really need them" towards a true safety net is a good thing. Especially when you consider the advances in prescription medication mean that it is often cheaper to give medicine for problems which required surgery 20 years ago. So if there was no Part D, you'd see people on Medicare who needed a medical problem fixed doing so with an expensive surgery because their out of pocket costs for surgery were lower then their out of pocket costs for medication. Even though the cost to the taxpayer would be lower with a prescription. So I think that was part of the goal of Part D: lowering total Medicare costs by allowing medicine to take the place of surgery in a lot of Medicare cases.
This comes back around again to the Grey Brigades: they own the country, politically speaking, because they exercise an absolute veto on touching Social Security or Medicare. They've been told that all those FICA taxes went into a piggy bank, and they believe it. Telling them that the piggy bank doesn't exist, that it's been raided for decades means nothing to them. Telling them it's impossible for X workers to support X retirees in the style to which they're accustomed does not sink in. They reject reality, because it's too horrible to contemplate. It will work for them, the cracks can be papered over for most of my lifetime, and thus the people who are now blocking the desperately needed reform will all be long dead when the turbine runs out of gas.
You know, this whole thing might be ok if the damn liberals had gone for a big family policy along with their Ponzi schemes. If Baby Booms had been the new norm, the pyramid schemes would have worked. If a combination of tax policy and propaganda had gone toward keeping families large, then we could pay for all this. As it is, we need to either cut the scams down to the bone, or import large numbers of taxpayers. Yet instead of headhunting the best and brightest from all over, the Democrats want to import 20 million peasants from Mexico to turn Texas blue and give them a permanent majority.
Oh, Marxy's been told this multiple times. I saw that little gem, but was on my phone, so by the time I got home the response to it on that epic thread would have gotten lost.
I told him on his own blog:
http://markadelphia.blogspot.com/2010/08/take-look-at-this-video-that-was-sent.html
"But they have run much higher debt in the past and we've come through it just fine."
Yes, like the 40's through the mid 50's.
Taken from an accounting perspective you are comparing apples to rocks.
Debts due to a world war in which we financed half the materiel used to fight that war.
This was followed by a economic boom due to the fact that most of the worlds economies had been bombed into ruin and those that hadn't were indebted to us for loaning them guns and ships and tanks and bombs (or they were the soviets who couldn't run a profitable operation of selling pre-formed gold ingots).
From a business perspective we currently are in competition with every other economy in the world. And we have the disadvantage of much higher labor costs. So to an investor or loan officer our P&L sheet and debt to income ratio has to show a reasonable degree of solvency.
In the post war years that reasonable degree had a lot more latitude since the entire world needed widgets of all sorts, and we were the only source of the worlds widgets for the next five to fifteen years. From an investors point of view that monopoly looked pretty good.
The times have changed, the situation has changed and unless you are advocating that we start carpet bombing the industrial centers of Europe and Asia again you have to stop using this comparison. It just ain't valid.
I told him another time, don't know if it was here or there, and I can't find it now. DW told it to him on this post:
https://www.blogger.com/comment.g?blogID=10123622&postID=328800501850773542&isPopup=true
Mark, you know the circumstances after WWII, I don't know why you willingly act like you don't. The up and coming new kid on the block managed to survive a world war, with next to zero damage to its infrastructure or manufacturing capacity. Additionally, the magical appearance of Rosie the Riveter suddenly doubled our available work force just in time to capitalize on our assets. Manzi explained that in terms that are clear. Remember? Jim Manzi?
Funny thing is - well, not funny, funny - more like ahh, it's marxy funny, is that marxy never did so much as acknowledge any of these comments. Not a disjointed disagreement or a illogical refutation to be had.
He just keeps plodding on, post after post, spouting the same ole song and dance.
Funny thing is - well, not funny, funny - more like ahh, it's marxy funny, is that marxy never did so much as acknowledge any of these comments. Not a disjointed disagreement or a illogical refutation to be had.
He just keeps plodding on, post after post, spouting the same ole song and dance.
That would be Standard Response #1. It's his favorite.
" Without a market to sell to we'd have crashed right back down. But that market was there, and it needed what we could make."
I'd just like to point out your own fallacy above. Products are paid for by production. Therefore, the fact that our economy entered a post war boom is not because the rest of the world was destroyed and "needed" to be rebuilt, but rather that with the end of the war, people in those countries were much more able to produce and trade with us. Without the ability of those countries to produce products of their own, there would be no trade.
In other words production comes before trade, many african countries have great need for many modern products, but since they fail to produce anything of value there is no market there.
It's a subtle but important difference, people tend to draw the wrong conclusion that war helped our economy, and that wars in general are good for an economy, but that is not the case. War is nothing but destruction, even when it leaves your country untouched, and people who think otherwise are falling for the "broken window fallacy" made popular by Bastiat.
OK, let me rephrase: Our economy entered a post-war boom because the rest of the world was pretty much wrecked, but could afford to rebuild, with us financing their rebuilding.
They were a good credit risk.
I am humbled and honored to have been quoted out of all those fine comments by the folks that I cited therein. Thank you, Kevin. I shall link you on my blog: http://www.thecompostfiles.blogspot.com and add you to my blogroll.
Shalom.
I've mentioned this in a previous post (regarding Markadelphias method of discussion) and I'll air it again.
How about "Unturing" to give it a title - Markadelphia has definitely failed the Turing Test (IMHO) as he's demonstraly replaceable by a random, left wing phrase generator. (The Dilbert website used to have a random Mission statement generator that put together random words to produce high minded sounding gobbledegook. Markadelphia is the same. so I conclude that he's actually a computer and not human).
So vote for Unturing as the adjective as he Unturs all the time ...
Moshe: How about "Markaphasia"?
Mr. Ben-David, I selected your comment because A) you're new here, and B) your comment perfectly illustrated over three years worth of commentary.
Perfectly.
You're what's known around these parts as a "Primary Source." :)
And thanks for the nice post and link.
A major factor in the rebounce after WW2 was the effective removal of an entire productive generation from the workforce, in this case the welfare lines.
That was great for unemployment numbers, which must have been good for the government balance sheet.
Note: All avatars and any images or other media embedded in comments were hosted on the JS-Kit website and have been lost; references to haloscan comments have been partially automatically remapped, but accuracy is not guaranteed and corrections are solicited.
If you notice any problems with this page or wish to have your home page link updated, please contact John Hardin <jhardin@impsec.org>