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View Diary: The Great Depression Pt. IV (187 comments)

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  •  The post-WW2 economy was an historical anomaly. (15+ / 0-)

    We shouldn't set up the post-WW2 (1945-70) economy as the standard by which economic progress is judged, as that was an historical anomaly.  The U.S. was the only industrialized economy that hadn't been bombed to dust during the war, and thus in 1949 the U.S. accounted for over 50% of the world's GDP.  That was never going to last once the world's other industrial economies rebuilt, and even less so now since huge new industrial economies (China and India first among them) have joined the club.

    Indeed a big part of what's gone wrong since 1970 has been the U.S. trying to sustain an anomalously high standard of opportunity.  If you were male, white, and willing to work in the 50s and 60s, you could have a comfortable, middle-class lifestyle, because you had no competitors at home or abroad.  As one of my professors put it to us back in the 1980s, "You've been sucking at the sugar tit of history and didn't know it."

    •  You are right. Every time is different. (2+ / 0-)
      Recommended by:
      4Freedom, fernan47

      We can look at the New Deal for inspiration and some ideas, but we should remember that then was then and now is now. We need to pay attention to the parameters of our world which includes more competitors, globalization (for better or worse), and different political and environmental crises.

      No more nonsense, please.

      by ohiolibrarian on Thu Jan 08, 2009 at 08:54:14 AM PST

      [ Parent ]

      •  Not to forget that the New Deal was proffered as (1+ / 0-)
        Recommended by:
        HighSticking

        a bone for the masses.

        Communists and socialists abounded during the era. FDR policies were watered down compared to the rhetoric and proposals of firebrands like populist Huey Long.

        It took much social pressure to enact New Deal legislation. The current level of social suffering hasn't generated the level of discontent necessary to implement current populist demands for less war and more social and infrastructure spending.

        Liberty cannot be preserved without a general knowledge among the people - John Adams

        by 4Freedom on Thu Jan 08, 2009 at 11:40:28 AM PST

        [ Parent ]

    •  Why should the fact that other economies (2+ / 0-)
      Recommended by:
      NCrissieB, pragmatic optimist

      have grown make US workers poorer?  The average productivity of US workers has grown much faster than median wages.  If the shares of GDP were distributed now as they were in the 50s and 60s, the average worker would be better off.

      Sometimes I think that conservative economists seeking "Pareto optimality" would prefer to have GDP be 1 percent greater even if that meant 1 person got all of the wealth.  It does not work that way.  First of all, wealthy people do not put as much of their money back into the economy as poor people.  After years of trying to cut wages, all of the sudden business wonders why demand is down.  Debt managed to paper over the demand problem for a while, but now we have hit the wall.  Meanwhile, the wealthy did not want to invest much of their in the production of goods and services, since consumer demand was stretched to the limit, so they ended up creating these financial bubbles investing in paper money games.

      Even more important is that all dollars do not have equal value to all people.  The difference between being poor and being middle class is much greater than the difference between having 100 million dollars and having a billion dollars.  In terms of "marginal utility", just going by overall dollars is very misleading, so an "optimal" economy is not the total number of dollars, but the total number of people who have access to goods and services.

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