UptonStellington

I'm looking to see what people's thoughts are on whether WWII brought us out of the Great Depression, and IF it did, WHY? The argument has become a dangerous one lately, as people are saying things like: Massive government spending for WWII brought us out of the Great Depression. And that was on a war. Imagine if we spent the same amount on something productive instead, like green technology or healthcare? One problem I have with the standard argument that WWII brought us right out of the Depression are that, as far as I know, it's not as if WWII started and things were going great all of a sudden. The bear market that characterized the Great Depression didn't even end until 1948 or so. But the bigger problem I have with this line of argument is that even IF WWII brought us out of the Depression, the United States then and the United States now are two different animals. As far as I know, before WWII, we were running a current account surplus, and though there may have been large deficits run during WWII, we had a manufacturing base and exportable goods and services to back that deficit up. In other words, we were running deficits with the aim of improving industrial capacity in order to be more productive. Today, we are already faced with massive deficits that have gone to finance not production, but consumption. And we'd be borrowing even more money to invest in things that would be only questionably productive.

What the? I'm from Nashua too! I didn't know there were others... Thank god for the Teletrash.

Has anyone read "Capitalism at Work"? It's all about Enron -- how its failures are always blamed on the free market, but how its downfalls were actually a result of political medelling (how do you spell that word?!) by people like Ken Lay. I actually came across this video on YouTube, where the author, who had worked as Lay's speechwriter, mentions the parallels between Lay and an Ayn Rand villain. If anyone has read it, I'd like to know whether it's worth the read....

Wait. I would think this last sentence is true to the extent that these goods are bought with debt. But if they are bought through the exchange of services -- we offer them financial / business services, etc., and we get goods in exchange -- I don't see what the problem is?

Hazlitt's book is great -- I wish they'd assign it to high school students. Jennifer, let me make sure I've got your take clear: If I want a good from Mr. Wen, I have to give Mr. Wen something else in return. Are you saying that what I've been giving Mr. Wen is not exactly as quantifiable as what Mr. Wen has been giving me? And further, that whatever I AM giving Mr. Wen is highly dependent on how I'm doing financially, whereas what Mr. Wen is giving me is valuable regardless of economic disturbances?

(Mods feel free to merge this with another thread, like ABCT) Since sNerd posted the YouTube video of Peter Schiff making his spot-on predictions for the recession, I've spent the last two days reading everything I can about the guy. Whenever he's on TV (CNBC had him on last Thursday and mentioned the popular YouTube videos), he defends the idea that we have to produce before we can consume, that our money is becoming worthless, etc. As an economics student, I'm constantly witness to professors selling the merits of a "service economy," and that the trend nowadays is for other countries to do the manufacturing while we do the services. But Schiff disagrees with that, constantly calling ours a "phony service-sector economy". In an interview, he said this regarding trade deficits: Can somebody clear this up for me? Don't we simply have the comparative advantage in the sectors Schiff named (on an international scale, in the financial and other professional services) -- do we really need to be the ones with industrial capacity?

Why did they experience the drop in value? ... If a gold standard were adopted for the US, I don't see why there would still be trading of gold in the same way there is right now, which is as an inflationary hedge.

I was talking with a bunch of people about presidential candidates and Ron Paul came up. Somebody said, "yeah, but how can you think a guy who wants to return to the gold standard is qualified to be president?" I asked him what he thought was so bad about the gold standard, and he said that the gold standard was what bankrupted the country. We talked a little bit about fiat money, but the conversation shifted and I never found out what he was really talking about. Regardless, I hear a lot of people with the same reaction to a gold standard -- that it bankrupted the country, etc. I remember one of my economics professors talking about this, too, and I can't remember what period he was referring to. Does anybody know? Why is there such popular resistance to a gold standard? ... people seem to have some idea of it being the cause of economic decline in the past. What part of history are they referring to? The Great Depression?

There's that. But more than that, I'll ask them how, exactly, do they think Greenspan as an advocate of free markets?

We're doing an Ayn Rand unit in one of my philosophy classes, and I can't wait to hear the professor or other people say next week, "Even Alan Greenspan, who always talked about how much of an influence Rand's ideas had on him, admitted, after 40 years, that there is a flaw."

Yes, monthly loans and leases in bank credit to commercial and industrial, real estate, and consumer. They have steadily gone up. Granted its from Cato, but there is this story that I just came across with the same data, as well: http://www.cato.org/pub_display.php?pub_id=9685

I don't know if someone had mentioned this earlier, I just skipped to the last page of this discussion, but commercial paper aside, it's curious how much talk there is of credit markets being frozen for Main Streeters and yet: http://www.federalreserve.gov/releases/h8/data.htm Am I missing something?

I second that question.

I think the greatest line so far has been, though I can only paraphrase Biden, "When we're talking about taxing and taking money from the oil companies to give to the American people, we don't call it 'redistribution.' We call it 'being fair.'" He had a look on his face as if he was legitimately offended that she tried to call it for what it is.

Ditto what everyone has said, for the most part. If I understand this, were you having a conversation about economics and rational choice, which lead you to this current debacle? She sounds like the typical psych student at my school (which pains me to say, I wish they weren't like this) -- always citing some statistic and context dropping. Regarding Hong Kong, who are these "experts" she's referring to? Until you can both agree that the people she's quoting are "experts," she is only appealing to authority. Another thing -- if acting rationally means acting in accordance with reality, hasn't our tendency to do so been amply demonstrated by the incredible growth in real wealth (since I'd argue that wealth demonstrates our ability to cope with reality) over the decades and centuries, not to mention the explosion of real wealth that occurred once people were left free to act in their own interests?