Re: To libertarians / Rand clones
 

[ QUOTE ]
Yes, paying someone $100 to dig a ditch and fill it back up increases GDP. Just giving someone the $100 for no work would not increase GDP. In this comparison, if you think that paying the guy is better for the economy than giving the money away, you're actually subscribing to the labor theory of value.

Wait, did I just say that giving the $100 away would be better for the economy? Yes. In that case, the laborer has the $100, plus he's still available to do someting actually useful.

[/ QUOTE ]

BTW, note that for the purposes of this discussion, I'm ignoring the crime of using taxation to fund this wild goose chase.

Re: To libertarians / Rand clones
 

[ QUOTE ]
[ QUOTE ]
Except that those computers, while they are depreciating, do work that people actually value.

[/ QUOTE ]

And in determining the raw value of economic production, where does the "what the people actually value" factor in? I don't believe it does.

[/ QUOTE ]

Which only shows that the GDP of hole-digging and war-making is irrelevent to the health of the economy.

[ QUOTE ]
I sure was pissed off when I bought a Gateway. It was a total piece of junk and brought no value to me. My consumption (C) of $2000 still factored into GDP, however. Just like the government spending (G) on 100,000 airplanes factored into GDP.

[/ QUOTE ]

You're still missing the point. If instead the government had merely taken your $2000 and bought $2000 woth of airplane, is the economy better off? Have you even "increased GDP" ? If the government prints enough money to buy its 100,000 airplanes, and the manufacturers of those airplanes bid up the price of computers to where you can't afford one and don't buy one, has the economy been "helped" ?

[ QUOTE ]
On a related note, many technology innovations and efficiencies came about from World War II as well, which also factor greatly into the GDP growth rate. And some would say such things as the entire airline industry came into existence because of World War II.

[/ QUOTE ]

Funding a massive war to reap technological benefits has to be the most inefficient R&D program possible.

Re: To libertarians / Rand clones
 

[ QUOTE ]
[ QUOTE ]
Is it +EV?

[/ QUOTE ]

I'd imagine to the freedom loving people of Western Europe, the Jews, the Gypsies, among others, yes, it was +EV. Long term economically speaking.

[/ QUOTE ]

See my previous comments about defensive warmaking.

[ QUOTE ]
And clearly to the United States it was +EV.

[/ QUOTE ]

Show me the calculation.

Re: To libertarians / Rand clones
 

[ QUOTE ]


[/ QUOTE ]So, just to clarify, after a war, the country is in worse economic shape?

[/ QUOTE ]

[ QUOTE ]
Given the general term "economic shape" this really isn't a matter of opinion. You know the dates of major US wars. Can you not simply look at a US GDP (the ultimate "general shape" indicator) trend chart and look at the dates following our wars and come to your own conclusion?

[/ QUOTE ]

[ QUOTE ]
I did this. What do you think my results were?

[/ QUOTE ]

Meaningless, in the absence of a better understanding of economics.

Re: To libertarians / Rand clones
 

[ QUOTE ]
[ QUOTE ]
So, just to clarify, after a war, the country is in worse economic shape?

[/ QUOTE ]

In worse shape *than it would have been in, had there been no war*.

Of course the country could be in better shape after a war, since war is not the only factor influencing the "economic shape" of a country. But, if there had been no war, it ought to be *in further "better shape" yet still*.

[/ QUOTE ]


[ QUOTE ]
This is a very important distinction. It is also (probably) not measurable (like so many things in economics).

[/ QUOTE ]

Luckily it doesn't have to be measured to be shown to be true. Like every economic truth, it can be logically deduced.

Re: Homer lunch
 

[ QUOTE ]
[ QUOTE ]
FDR ... did incalculable damage to this country.

[/ QUOTE ]

The evidence of ignorance spreading among the masses of Americans is right here, in this thread.

How much have you guys read about FDR and that era, aside from the texts of those already agreeing with your viewpoint ?

[/ QUOTE ]

I've read much about FDR. It is widely known, accepted, agreed upon, among economists that his policies were disastrous, catastrophic, evil in practice and effect if not intent, and that they brought enormous hardship, misery, suffering, and injustice.

FDR believed that the Depression was caused by falling prices, so he ordered Federal agents throughout the land to shoot ranchers' livestock and leave them rotting in the sun to drive up prices. I'll say it again. While people stood around in soup lines and starving because they couldn't afford to eat, FDR intentionally drove up the price of meat by having Federal agents decimate America's livestock population. And that's just ONE of THOUSANDS of bizarre anti-economic programs and policies that seem custom designed to destroy the economy which he put into place (many of which we still suffer from to this very day). If the [censored] hadn't finally died we'd still be in his Wonderful Depression. The guy was EVIL. And this guy is practically DEIFIED by the left and in government schools. It's revolting.

Yes, the level of ignorance among the masses in America is shocking.

And how much have YOU read about the man and his policies that doesn't agree with what YOU already believe?

A tiny fraction of The Truth about FDR.

Re: Homer lunch
 

Don't forget that he was responsible for the japanese internment. The man had no qualms whatsoever about violating civil rights. He was scum.

natedogg

Re: Homer lunch
 

[ QUOTE ]
[ QUOTE ]
FDR ... did incalculable damage to this country.

[/ QUOTE ]

The evidence of ignorance spreading among the masses of Americans is right here, in this thread.

How much have you guys read about FDR and that era, aside from the texts of those already agreeing with your viewpoint ?

[/ QUOTE ]

Since nearly any economist can tell you all about why FDR's policies were detrimental, and anyone with a rudimentary understanding of our constition can see that his internment of the japanese was a flagrant violation, I'm having a hard time thinking of something good he did. Nearly all of the FDR "new deal" reforms have been undone, precisely because of how bad they were. One of the few that remains is Social Security.

So please, Cyrus, enlighten us "uneducated americans". Tell us about how great FDR was.

natedogg

Re: To libertarians / Rand clones
 

Actually, the New Deal failed miserably to bring the US out of the Depression. WWII brought us out of the Depression.

Re: To libertarians / Rand clones
 

[ QUOTE ]
Show me the calculation.


[/ QUOTE ]

First, the US did not simply print off several hundred billion dollars in cash to pay for the war; at the time, it issued bonds. Second, there is a question at the end of this post, please answer it.

Primary economic indicators:

GDP:
1939: $92B
1945: $223B

Personal Consumption Expenditures:
1939: $67.2B
1945: $119.8B

Gross Private Investment:
1939: $9.3B
1950: $54.1B

Unemployment:
1932 - 23.6%
1933 - 24.9%
1934 - 21.7%
1935 - 20.1%
1936 - 16.9%
1937 - 14.3%
1938 - 19.0%
1939 - 17.2%
1940 - 15.0%
1941 - 9.9%
1942 - 4.7%
1943 - 1.9%
1944 - 1.2%
1945 - 1.9%
(and infact many economists would claim there was negative unemployment, given both the understatement of unemployment and the large amount of labor shortages in many of our industries at the time)

Total Employee Compensation:
1939: $48.1B
1945: $123.3B

Corporate Profits:
1933: -$0.3B
1939: +$6.2B
1945: +$20.1B

Inflation:
1939: -1.2%
1945: +2.3%
Inflation then remained below +2.0 well into the 1960s.

What happened between 1939 and 1945 that made our economy so ridiculously robust?

Re: To libertarians / Rand clones
 

As I said. Meaningless in the absence of a deeper understanding of economics.

Simply draft all the unemployed and there is no unemployment! Brilliant! Are you arguing to reintroduce the draft? Better yet, it would be cheaper to imprison them than to draft them, and our unemployment rate would be just as low.

And again with the GDP. Suppose the government emplyees a fifth of the workforce and buys thousands of intaglio presses upon which our workers are employed printing shiny new dollars day and night, with which they are then paid. What happens to the GDP? What do you think happens to corporate profits in the economy? Is the economy in any sense of the word "robust" ?

Inflation. You embolden 2.3% inflation like it's a good thing? Where are the inflation numbers from 1940 to 1944 I wonder?

Why do you think any of these numbers imply a "robust" economy? And to the extent that the economy was more robust post war than pre-war (which it was), why in the world do you attribute that change to the war, rather than the cessation of many Raw Deal policies, which took place at the same time. The Raw Deal was demonstrably horrible economic policy, it was finally being phased out, and yet you attribute economic growth to . . . the war?

Do you not understand the concept of "pent up demand" for consumer goods that could not be bought because of Roosevelt's war? Post war consumer demand and production will be elevated, but only because supply was artificially constrained during the war. There's no net economic gain because of the war. The idea is patently absurd.

Re: To libertarians / Rand clones
 

[ QUOTE ]
Simply draft all the unemployed and there is no unemployment!

[/ QUOTE ]

Strawman and absurd. All of the unemployed were not drafted. Nor when the war was over did unemployment skyrocket back into the 20's. Rather, the entire nation was put back to work, and in fact there were labor shortages, which means the economy is working at or beyond its full capacity. Not to mention you bring significant subjective judgement rather than objectively evaluating what was good or bad for the economy. Clearly we are analyzing what happened and not what should be done in the future.

[ QUOTE ]
And again with the GDP...

[/ QUOTE ]

More strawman arugment, coupled with your erroneous claim that all the government did was print money to pay for the war.

[ QUOTE ]
Inflation. You embolden 2.3% inflation like it's a good thing? Where are the inflation numbers from 1940 to 1944 I wonder?


[/ QUOTE ]

2.3% inflation is not only good, its excellent, on top of being vastly better than deflation that we were experiencing prior to the war. Don't have the exact numbers on me but the inflation numbers from 1940 to 1944 I know were below 3.0% each year, and inflation averaged about 3% right to 1970. Bernanke would kill to be able to see inflation average 3% for even the next 10 years. Again this is excellent, contrary to your fallacious claim that our government recklessly printed money and sent our inflation skyrocketing.

[ QUOTE ]
Why do you think any of these numbers imply a "robust" economy?

[/ QUOTE ]

Are you kidding me? Full employment, new industries, tons of new non-military jobs, new and increased technological innovation, low steady inflation, booming corporations and employee compensation. I can very easily attribute all of this to the war.

Can you very easily attribute all of this to the cessation of New Deal legislature while showing the war had nothing to do with it?

[ QUOTE ]
There's no net economic gain because of the war.

[/ QUOTE ]

All you've done is deny this. Clearly our economy was in vastly better shape both during and after the war as compared to prior, and the onus is on you to prove that the war had no economic implications (or negative implications) and rather that it was solely because of the removal of the New Deal (specify exactly which policies), and that the war and our overnight escape from the depression were merely coincidental.

Re: To libertarians / Rand clones
 

[ QUOTE ]
Are you kidding me? Full employment, new industries, tons of new non-military jobs, new and increased technological innovation, low steady inflation, booming corporations and employee compensation. I can very easily attribute all of this to the war.

[/ QUOTE ]

So why don't we just turn to a command economy, build tons of bombs and drop them all in the ocean? We could be building tons of tanks and planes, randomly destroying 75% of them, and the economy would boom, right? It's sooooo easy!

Re: To libertarians / Rand clones
 

All that needs to really be said is this. If war is so good for the economy, then why don't we just perpetually manufacture bombs and blow them up over the ocean? That way everyone will be employed in bomb factories and there will be a consistently high GDP.

This is stupid because GDP and the unemployment rate are both aggregates. They mean little regarding the actual success of the economy. See pvn's post with the ditch digging analogy.

[ QUOTE ]
2.3% inflation is not only good, its excellent, on top of being vastly better than deflation that we were experiencing prior to the war. Don't have the exact numbers on me but the inflation numbers from 1940 to 1944 I know were below 3.0% each year, and inflation averaged about 3% right to 1970. Bernanke would kill to be able to see inflation average 3% for even the next 10 years. Again this is excellent, contrary to your fallacious claim that our government recklessly printed money and sent our inflation skyrocketing.

[/ QUOTE ]

Yeah, they passed it on to the taxpayers.

[ QUOTE ]

Are you kidding me? Full employment, new industries, tons of new non-military jobs, new and increased technological innovation, low steady inflation, booming corporations and employee compensation. I can very easily attribute all of this to the war.

Can you very easily attribute all of this to the cessation of New Deal legislature while showing the war had nothing to do with it?


[/ QUOTE ]

1) High employment:

This means nothing unless people are producing something worthwhile. Again, the ditch digging analogy.


2) New industries and non-military jobs:

Which ones were created by the war?


3) Low steady inflation:

Again, the money had to come from somewhere. In this case it was the taxpayers wallets.


4) New and increased technological innovations:

Which ones? Certainly you don't believe that people actually benefit from the development of arms. Other advancements which actually aided consumers may have been created as a corollary, but wouldn't it have been less costly to develop these directly?


5) Booming corporations:

Again, those which produced products (metal, plastics, fuel etc...) which were bought by the government certainly gained. What about all of the other industries?


[ QUOTE ]
All you've done is deny this. Clearly our economy was in vastly better shape both during and after the war as compared to prior, and the onus is on you to prove that the war had no economic implications (or negative implications) and rather that it was solely because of the removal of the New Deal (specify exactly which policies), and that the war and our overnight escape from the depression were merely coincidental.

[/ QUOTE ]

Why is the onus on him? It can be logically deduced as to why war is detrimental to the economy. Your aggregates have proved nothing. Again, your knowledge of economics is very limited, you are looking at numbers without actually contemplating their true nature.

Re: To libertarians / Rand clones
 

I've provided you with specific logical explanations for how war spending can ONLY either come from funds that are then not spent elsewhere (broken window fallacy) or from printing money , which cannot increase the wealth of the country and can only redistribute wealth from the populace to, for example, arms manufacturers, while merely displacing production from consumer goods to military "goods." You have not refuted ANY of these points.

So, by what specific mechanisms does war improve the economy? How does a war make a nation wealthier (neglecting spoils, which I presume isn't part of your claim)? No handwaving about numbers before or after the war. I want to know how it works.

Because clearly, if war is so fantastic for the economy, all we need to do is maintain a perpetual state of war, yes?

Re: To libertarians / Rand clones
 

[ QUOTE ]
So why don't we just turn to a command economy, build tons of bombs and drop them all in the ocean? We could be building tons of tanks and planes, randomly destroying 75% of them, and the economy would boom, right? It's sooooo easy!

[/ QUOTE ]

[ QUOTE ]
If war is so good for the economy, then why don't we just perpetually manufacture bombs and blow them up over the ocean? That way everyone will be employed in bomb factories and there will be a consistently high GDP.

[/ QUOTE ]

While our economy would certainly be booming (as Tom and Riddick have so carefully explained), this wouldn't produce quite the same satisfaction as killing foreigners. We need honest-to-FDR perpetual warfare. Prosperity through conflict! Growth through destruction!

Re: To libertarians / Rand clones
 

[ QUOTE ]
So why don't we just turn to a command economy, build tons of bombs and drop them all in the ocean? We could be building tons of tanks and planes, randomly destroying 75% of them, and the economy would boom, right?

[/ QUOTE ]

[ QUOTE ]
you bring significant subjective judgement rather than objectively evaluating what was good or bad for the economy. Clearly we are analyzing what happened and not what should be done in the future.


[/ QUOTE ]

Re: To libertarians / Rand clones
 

[ QUOTE ]
If war is so good for the economy, then why don't we just perpetually manufacture bombs and blow them up over the ocean? That way everyone will be employed in bomb factories and there will be a consistently high GDP.


[/ QUOTE ]

[ QUOTE ]
I of course am staying entirely within the context of the Second World War.


[/ QUOTE ]

[ QUOTE ]
Clearly we are analyzing what happened and not what should be done in the future.


[/ QUOTE ]

Re: To libertarians / Rand clones
 

[ QUOTE ]
This means nothing unless people are producing something worthwhile. Again, the ditch digging analogy.


[/ QUOTE ]

Tanks, bombs, and planes were very worthwile in 1941 when three countries decided to declare war on us.

[ QUOTE ]
Which ones (industries) were created by the war?


[/ QUOTE ]

The computer industry, for one. The airline industry would be another. Was this a serious question?

[ QUOTE ]
Again, the money had to come from somewhere. In this case it was the taxpayers wallets.


[/ QUOTE ]

Half came from taxes, half came from bonds. How did this comment in any way address inflation which you quoted?

[ QUOTE ]
New and increased technological innovations:

Which ones?

[/ QUOTE ]

Again, are you serious? How about the the microwave, jet engine, radio communication, underwater communication, sonar, radar, ultrasonic waves and electromagnetic wave theory, submarines, improved antibiotics (penicillin), just to name a few off of the top of my head

I seriously have to stop reading your post after I just read that question. I might as well be explaining World War Two to a child.

Re: To libertarians / Rand clones
 

[ QUOTE ]
So, by what specific mechanisms does war improve the economy?

[/ QUOTE ]

You keep using the word "war" when I keep addressing "World War Two".

I have briefly and accurately explained, using statistics and standard economic indicators, how World War II pulled us out of the Depression and led to sustained economic health and growth. Not "war", but World War II. However, you refuse to accept GDP, GDP per capita, inflation, unemployment, technological efficiency, the growth rate of technological efficiency, national income, gross private investment, and consumption expenditure, as any indication of economic health and growth.

You also imply that the removal of "Raw Deal" policies was what brought us out of the depression, but refuse to elaborate any further.


[ QUOTE ]
while merely displacing production from consumer goods to military "goods." You have not refuted ANY of these points.


[/ QUOTE ]

I shouldn't need to refute it. Any intelligent person can surmise that the abysmal consumer good production during the Depression was displaced by an uncomparably greater amount of (necessary) military production, not an equal amount.

Re: To libertarians / Rand clones
 

[ QUOTE ]
[ QUOTE ]
So, by what specific mechanisms does war improve the economy?

[/ QUOTE ]

You keep using the word "war" when I keep addressing "World War Two".

[/ QUOTE ]

So, World War Two was not a war? If it was, in what magical way was it different from other wars? How about answering this question then: By what specific mechanisms did World War Two improve the economy?

[ QUOTE ]
I have briefly and accurately explained, using statistics and standard economic indicators, how World War II pulled us out of the Depression and led to sustained economic health and growth. Not "war", but World War II.

[/ QUOTE ]

[censored]. You haven't explained anything. You've waved your hands about and asserted that World War Two inproved the economy. I asked by what mechanisms it did so. See, that would constitute an explanation. Your argument is akin to seeing a pot of water sitting on the stove. Some ice cubes are dropped into the pot, and later the water boils. "The ice clearly made the water boil!" you cry. Absurd say I, providing an explanation of how ice can't make the water boil. You then provide me with temperature data from before the ice was dropped in and afterward, as though the two different temperatures explain the boiling of the water!

[ QUOTE ]
However, you refuse to accept GDP, GDP per capita, inflation, unemployment, technological efficiency, the growth rate of technological efficiency, national income, gross private investment, and consumption expenditure, as any indication of economic health and growth.

[/ QUOTE ]

For reasons that I have carefully explained and you still continue to ignore. I ask AGAIN: If I hire all the unemployed and put them to work printing dollars that I then pay them with, leading to low unemployment, increased GDP, and inflation, has the economy been improved or helped? If not, how can you POSSIBLY claim that such meaningless aggregates are an effective measure of economic health?

[ QUOTE ]
You also imply that the removal of "Raw Deal" policies was what brought us out of the depression, but refuse to elaborate any further.

[/ QUOTE ]

Why should I move on to that when we're stuck on the point where you can't propose any mechanism whereby World War Two could possibly have been good for the economy, nor can you refute my arguments that it could not have been.

[ QUOTE ]
[ QUOTE ]
while merely displacing production from consumer goods to military "goods." You have not refuted ANY of
these points.


[/ QUOTE ]

I shouldn't need to refute it.

[/ QUOTE ]

Brilliant! "I can't refute it, so I'll turn my nose up and claim I shouldn't have to."

[ QUOTE ]
Any intelligent person can surmise that the abysmal consumer good production during the Depression was displaced by an uncomparably greater amount of (necessary) military production, not an equal amount.

[/ QUOTE ]

Then "any intelligent person" should be able to propose logical economic mechanisms to show this. Which you apparently cannot do.

Re: To libertarians / Rand clones
 

Good post.

I think wars, including WW2, are necessarily detrimental to any economy simply because stuff gets destroyed and people get killed so the potential to make more stuff becomes reduced. Fairly straightforward and along your lines from what I can see.

A possible counter-argument, however, might be that the euphoric, optimistic attitude required to make a very strong economy came about because of the war. One could argue that the positive effects lasted much longer and therefore outweighed the negatives.

So if you're looking for a mechanism, it's:

- war destroys lives and other stuff, but when war ends there's euphoria which leads to optimism which leads to high motivation which leads to productivity which leads to a strong economy.

My counter-counter-argument would then be that it was not the war which caused the boom but the optimism and high motivation which could have been achieved in any number of other ways with a much lower cost.

In the case of WW2, though, the economic benefits are mostly an illusion because of the lack of backing of paper currency. All this flimsy worthless stuff floating around and mainstream economic theories assume it has value. Imagine what will happen when people realize it really doesn't have value! Yikes! [img]/images/graemlins/shocked.gif[/img]

Re: To libertarians / Rand clones
 

It sounds like the broken window fallacy. I'm not sure why Riddick is still arguing.

Re: To libertarians / Rand clones
 

I've laid out specifics as to WWII and the economy, and all you've laid out are strawman exaggerations. You claim my argument is weak because employment+technology+capital is not a macroeconomic mechanism, and that the economic indicators of such are entirely coincidental, nor do they indicate economic improvement to begin with. I'm going to pretend you are simply correct on all of those points and throw in the towel.

But now its time for you to get specific. What really happened that pulled America out of the Great Depression? What specific "New Deal" components that, when repealed, led to our economic surge in 1940? How did World War Two hurt the American economy?

Re: To libertarians / Rand clones
 

[ QUOTE ]
[ QUOTE ]
This means nothing unless people are producing something worthwhile. Again, the ditch digging analogy.

[/ QUOTE ]

Tanks, bombs, and planes were very worthwile in 1941 when three countries decided to declare war on us.

[/ QUOTE ]
‘Worthwhile’ was a bad word. I should have said ‘leads to prosperity’ or something of that nature.

[ QUOTE ]
[ QUOTE ]
Which ones (industries) were created by the war?

[/ QUOTE ]

The computer industry, for one. The airline industry would be another. Was this a serious question?

[/ QUOTE ]
So it is your assertion that these would not have been created in the absence of war?

[ QUOTE ]
[ QUOTE ]
Again, the money had to come from somewhere. In this case it was the taxpayers wallets.

[/ QUOTE ]

Half came from taxes, half came from bonds. How did this comment in any way address inflation which you quoted?

[/ QUOTE ]
There are three ways that the government can pay for things: taxes, new money (inflation), and bonds. Although inflation wasn’t high, the government was forced to raise taxes in order to get the necessary revenue. The other way they did this (as you stated) was through bonds. How do you suppose the government pays back this loaned money? This is done by passing it on to future taxpayers, or by printing new money. Both are bad.
[ QUOTE ]
[ QUOTE ]
New and increased technological innovations:
Which ones?

[/ QUOTE ]
Again, are you serious? How about the the microwave, jet engine, radio communication, underwater communication, sonar, radar, ultrasonic waves and electromagnetic wave theory, submarines, improved antibiotics (penicillin), just to name a few off of the top of my head

I seriously have to stop reading your post after I just read that question. I might as well be explaining World War Two to a child.

[/ QUOTE ]
Again, you believe that these would not have been developed (aside from submarines and the like) in the absence of war? I was merely asking that in anticipation of this particular response so I could make this point. In a market economy, developments will be made based on what people demand. Any such innovations which were developed during war time would have been developed outside of war time, should they have been demanded.



You have still failed to address the simple fact that it can be logically deduced as to why war is bad for the economy. As Borodog stated:
[ QUOTE ]
I've provided you with specific logical explanations for how war spending can ONLY either come from funds that are then not spent elsewhere (broken window fallacy) or from printing money , which cannot increase the wealth of the country and can only redistribute wealth from the populace to, for example, arms manufacturers, while merely displacing production from consumer goods to military "goods." You have not refuted ANY of these points.

[/ QUOTE ]

You keep relying on aggregates to make your point. Numbers mean nothing if you don't interpret them. Do you believe that WWII was special, in that by creating things to be destroyed during this particular period, people were magically better off afterward?

Re: To libertarians / Rand clones
 

[ QUOTE ]
‘Worthwhile’ was a bad word. I should have said ‘leads to prosperity’ or something of that nature.


[/ QUOTE ]

All goods in an economy don't need to "lead to prosperity", they simply need to be final goods which are consumed or inventoried. The ditch digging analogy has no relevance to military goods because a ditch is not a good and therefore isnt counted in production like military goods.


[ QUOTE ]
The other way they did this (as you stated) was through bonds. How do you suppose the government pays back this loaned money? This is done by passing it on to future taxpayers, or by printing new money. Both are bad.


[/ QUOTE ]

This is ridiculous. Corporations issue bonds, and they have to pay them back later. Are bonds bad for corporations?

[ QUOTE ]
Any such innovations which were developed during war time would have been developed outside of war time

[/ QUOTE ]

Ridiculous. The developments I outlined were demanded by military commanders, not civilian consumers. Civilian applications only came about after the previously unnecessary R+D had been done in war time urgency.

[ QUOTE ]
You have still failed to address the simple fact that it can be logically deduced as to why war is bad for the economy.

[/ QUOTE ]

I know that wars are generally bad for an economy. The 1939 economy was not a normally functioning economy.

[ QUOTE ]
You keep relying on aggregates to make your point. Numbers mean nothing if you don't interpret them.

[/ QUOTE ]

I interpret labor, technology, and capital to be inputs that lead to economic output. All three terms are described in the aggregate. And in an depression era when all three come together to produce very little, and suddenly, almost overnight, all three come together to produce a lot, oh nevermind it was just America naturally going through the business cycle, had nothing to do with any war.

Re: To libertarians / Rand clones
 

[ QUOTE ]
the potential to make more stuff becomes reduced.

[/ QUOTE ]

This is precisely opposite of what happened in 1940. Any economy's potential to produce "stuff" is entirely based on its labor, technological efficiency, and capital. All three skyrocketed in America because of World War II.

Re: To libertarians / Rand clones
 

[ QUOTE ]
Any intelligent person can surmise that the abysmal consumer good production during the Depression was displaced by an uncomparably greater amount of (necessary) military production, not an equal amount.

[/ QUOTE ]

Ah, so the key is to deprive the population for an extended period, then relieve the deprevation?

Do you refute that the depression started in the first place because of this sort of misguided tinkering?

Re: To libertarians / Rand clones
 

pvn, I am not quite as anti-government as you but i am not too far off. I have even specifically ordered "Socialism" from the Mises Institute to support them instead of Amazon.com. So please stop inferring what I do or do not advocate. I am merely interpreting what happened in 1940 that pulled our economy out of the gutter, and apparantly it was not World War II.

Re: To libertarians / Rand clones
 

[ QUOTE ]
This is ridiculous. Corporations issue bonds, and they have to pay them back later. Are bonds bad for corporations?

[/ QUOTE ]

No. I am shocked that you can't tell the difference. Corporations pay them back with THEIR money which they made consentually -- not that which they used force to attain. I am not paying for corporate debts, but I am paying for government ones. Of course, corporations also lack the ability to create money and inflate the money supply too.

[ QUOTE ]
Ridiculous. The developments I outlined were demanded by military commanders, not civilian consumers. Civilian applications only came about after the previously unnecessary R+D had been done in war time urgency.

[/ QUOTE ]

So if nobody actually wanted these innovations, then why is it such a great thing that they were developed?

Re: To libertarians / Rand clones
 

[ QUOTE ]
I interpret labor, technology, and capital to be inputs that lead to economic output. All three terms are described in the aggregate. And in an depression era when all three come together to produce very little, and suddenly, almost overnight, all three come together to produce a lot, oh nevermind it was just America naturally going through the business cycle, had nothing to do with any war.

[/ QUOTE ]

Same fallacious argument -- just because more was produced and more people were employed does not mean that the economy had improved. I think we have successfully proved that in the preceeding posts.

Re: To libertarians / Rand clones
 

[ QUOTE ]
just because more was produced and more people were employed does not mean that the economy had improved.

[/ QUOTE ]

TheDon,

Please do something that has not been done in this thread. Define economic improvement.

Re: To libertarians / Rand clones
 

Development and growth of the economy as a result of the actions of individuals. This way, people get what THEY want, not what government wants. In wartime, the government is causing growth as a result of their action. Ideally, the economy would grow free of this intervention.

Re: To libertarians / Rand clones
 

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Your answer: Development and growth of the economy as a result of the actions of individuals. This way, people get what THEY want, not what government wants.


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So when Pearl Harbor was attacked and Italy and Germany declared war on us, the people didn't want to build tanks and bombs?

Please, no dodging around the request. Please define economic improvement. I would invite anyone else who disagrees with me to do the same.

Re: To libertarians / Rand clones
 

They people could have defended themselves without the state. The government monopoly on defense prevented the market from providing it, though.

My definition stands. Namely, growth implies a creation of wealth, not a destruction of it. Individuals only desire the latter under very rare circumstances. Governments, however, seem to desire this in excess.

Re: To libertarians / Rand clones
 

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I've laid out specifics as to WWII and the economy, and all you've laid out are strawman exaggerations. You claim my argument is weak because employment+technology+capital is not a macroeconomic mechanism, and that the economic indicators of such are entirely coincidental, nor do they indicate economic improvement to begin with. I'm going to pretend you are simply correct on all of those points and throw in the towel.

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Neat trick. So you don't want to explain how hiring the unemployed, having them print money, and then paying them with it, is good for the economy, even though it has the same suite of features (increase GDP, lowered unemployment, inflation) that you claim indicate a robust economy? Nor are you willing to admit that you haven't provided a single mechanism whereby the Second World War could have made the nation wealthier? Nor that you have not refuted the logical mechanisms whereby I have explained that war cannot improve the economy, except in a superficial and illusory way? You're just going to declare that you're still right but you don't want to play anymore?

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But now its time for you to get specific. What really happened that pulled America out of the Great Depression? What specific "New Deal" components that, when repealed, led to our economic surge in 1940?

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I'll be preparing a post on this tomorrow. It is long. And the nature of your question obviously reveals that you still don't understand what we're talking about. There was no economic surge in 1940. Besides, if there were an economic surge in 1940, wouldn't that defeat your entire argument, since that was one to two years before we entered World War Two, our supposed economic salvation?

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How did World War Two hurt the American economy?

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You MUST be joking now. Come on. This is ridiculous. How about:

1) Massive destruction of labor
2) Massive waste of the factors of production
3) Shift of production from market to command economy, and all of the economic problems that ensue, i.e. the economic calculation problem.
4) Two words: Ration Cards

Those are just off the top of my head.

Your point about America being "attacked" is misleading. Roosevelt desperately needed to enter World War Two because he incorrectly believed, like you, that it would somehow magically improve an economy that his decade in office had only succeded in making worse. He maneuvered both Japan and Germany into attacking the United States with a series of provocations that virtually guaranteed "an incident," in the words of Winston Churchill. Among other overtly aggressive actions, he instituted an oil embargo against Japan, and ordered a US Navy destroyer to assist the British Navy in depth charging a German submarine. Roosevelt needed the United States to be attacked because the country was deeply isolationist and there was little support for embroiling the nation in yet another foreign conflict halfway around the globe. He engineered a long train of provocations that culminated in Pearl Harbor and got exactly what he wanted.

None of this can turn dead labor and wasted factors of production into an economic boon.

Re: To libertarians / Rand clones
 

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Namely, growth implies a creation of wealth

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Excellent, that is what I conclude as well. In fact, its what Adam Smith concluded. Adam Smith further articulated that the source of a nation's wealth is its ability to efficiently transform resources (inputs) into goods and services. It is the people who perform this transformation through their labor which is applied to land and capital. This is what determines a nation's economic production - Y(GDP) is a function of K(capital), L(labor), and resources(M). What this means to the people is income for which they can then purchase goods and services. But without jobs, people lack income. When people lack income, they cannot buy goods and services, and their quality of life plummets. This was clearly the case in the 1930s for many millions of Americans.

Something happened from 1940-1945 that brought tens of millions of new jobs for men in private firms contracted out by the government in order to apply their labor(L) to transform worthless metal (resources, M) into much more valuable goods (value added) such as tanks and planes (final output). In addition, 19 million women were brought out of the homes for the first time and entered the labor force to apply their labor and receive income as well. With all of these jobs, people once again had income, and plenty of it. This led to greater amounts of both savings and consumption than before as well. Of course, supplies of standard consumer goods were rationed, but the income was there none the less, and quality of life increased for the average American, as joblessness vanished entirely. On top of all of this, our ability to "efficiently transform resources" grew during this time period as well, as new processes for mass production were developed for everything from airplanes right down to penicillin.

So, clearly, as our increased capacity and efficiency to transform resources into output was more than fulfilled, our nation's wealth increased. There are several numerical indications of this, such as GDP, index-base 1939, in which it increased substantially. This is typically an indicator of economic growth, however. Economic health is usually defined in terms of unemployment, incomes, and quality of life. We also know that these indicators also improved greatly from 1939 to 1945. After a decade of economic depression, our economy was surging according to all standard economic indicators.

Now the $64,000 question. What happened following the economic depression of the 1930s that so greatly improved our nation's wealth? Clearly it was not WWII, since "wars cannot possibly be good for an economy, ever, period". What, then, was it?

Re: To libertarians / Rand clones
 

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So you don't want to explain how hiring the unemployed, having them print money, and then paying them with it, is good for the economy

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Not this tired old example again. Money is not a final good, it is not economic output. This strawman argument has no relevancy whatsoever.

Re: To libertarians / Rand clones
 

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There was no economic surge in 1940. Besides, if there were an economic surge in 1940, wouldn't that defeat your entire argument, since that was one to two years before we entered World War Two

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The economic surge began in 1940, along with our resurrected military draft (18,000 men in 1940) and our production of military goods. This is not up for argument.

For sh*ts and giggles I just ran a quick google search on economy, 1940 and found this from the Cambridge university Press.

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The United States economic surge started in 1940 and 1941, a prelude to the wartime "production miracle" which managed to maintain civilian consumption while growing the overall economy. Contributions to this came from increasing labour force participation and reducing private investment, while war financing followed the traditional approach of deficit spending until tax increases caught up. In evaluating the cost of the war to the United States, Hugh Rockoff takes a counterfactual approach, attempting to calculate what would have happened without the war. And he argues that the change in macroeconomic regime may have been the most important contribution of the war to subsequent prosperity.



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http://dannyreviews.com/h/Economics_World_War.html

Edit: and somehow I magically bypassed the profanity filter.

Re: To libertarians / Rand clones
 

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Your point about America being "attacked" is misleading.

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I was not misleading at all. Say what you want about Roosevelt or the propaganda that ensued, the people of America wanted revenge in a big, perhaps even racist way. They also came to realize the inevitability of our war with Germany