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To be clear, conservatives absolutely do have an economic policy agenda. They favor lower taxes, less regulation, government spending cuts, more domestic energy production, school choice, free trade, and low inflation. They often cite these policies as ones that might alleviate recession and speed recovery. They favor these policies now, they favored them in 2008, and they favored them in 2004.

That is, conservatives favor the same set of economic policies when the economy is weak and when it is strong; when unemployment is high and when it is low; when few homeowners are facing foreclosure and when many are. The implication is that conservatives believe there is nothing in particular the government should do about economic cycles.

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Originally posted by kpo:
Very good article:

http://www.businessinsider.com/conservatives-have-no-idea-what-to-do-a
bout-recessions-2013-12#ixzz2ngv5fJ4P

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To be clear, conservatives absolutely do have an economic policy agenda. They favor lower taxes, less regulation, government spending cuts, more domestic energy production, school choice, free trade, and low inflation. They often cite these policies as ones that might alleviate recession and speed recovery. They favor these policies now, they favored them in 2008, and they favored them in 2004.

That is, conservatives favor the same set of economic policies when the economy is weak and when it is strong; when unemployment is high and when it is low; when few homeowners are facing foreclosure and when many are. The implication is that conservatives believe there is nothing in particular the government should do about economic cycles.

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Well conservatives, is it true?

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So what policies do the GOP of today (or libertarians) have to deal with recessions? Any? Or are economic downturns just something to be accepted and fatalistically endured?

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No conservatives seem to want to address the question either.

Also not surprising.

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Originally posted by kpo:
The article is about modern conservatives and their policies (or lack thereof) for dealing with recessions. However, the point applies just as well to libertarians, like yourself.

It should be noted that Republicans in the past have embraced Keynesianism (notably Nixon, but also Bush2, who spent money in his 2002 stimulus) - which no Republican could get away with today.

So what policies do the GOP of today (or libertarians) have to deal with recessions? Any? Or are economic downturns just something to be accepted and fatalistically endured?

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For the last five years, liberals have promoted three main economic policies to shorten or ameliorate the Great Recession and speed the recovery from it.
•Deficit-financed spending to compensate for demand gaps in the private sector.
•Easy monetary policy to raise inflation and support demand.
•Mortgage modifications to reduce foreclosures and support consumption.

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Originally posted by Geezer:
Conservatives support "...lower taxes, less regulation, government spending cuts, more domestic energy production, school choice, free trade, and low inflation. They often cite these policies as ones that might alleviate recession and speed recovery." So they apparently think this is what to do to about recession, and have been pretty consistent for a while.

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So first, it does look like Conservatives have ideas about what to do about recessions, but it's a passive response

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Originally posted by M52NICKERSON:
Those are not conservative ideas for daeling with a recession those are just the conservative ideals they push all the time. These are the conservative ideas to everything.

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Originally posted by Storymark:
Its like he deliberately missed the whole point.

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Originally posted by SIGNYM:
GEEZER, this past recession wasn't just "a recession", it was the WORST recession since the Great Depression.

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Libertarians today had no more notion of what to do with it than fiscal conservatives of 1929 knew what to do with the Great Depression.

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The whole point of studying the Great Depression was because it was different from recessions of the past, it didn't fit into anyone's theories (even Marx') where bust is followed by boom, but showed every evidence going on forever at a new equilibrium of deeply suppressed economic activity. Libertarian theory STILL hasn't taken it into account, and you personally look like you refuse to take it into account as well. Since you are a student of history, it seems to me that you should look into this economic phenomenon more deeply, and develop something more than a "passive (ie non-)response".

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Originally posted by Geezer:

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Originally posted by Storymark:
Its like he deliberately missed the whole point.

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I get the point. For liberals, it's always "WE HAVE TO DO SOMETHING NOW!!!! THROW MONEY AT IT!!!!".

Conservatives figure that if you have a working system, it'll self-correct. Apparently, the recessions during the conservative administrations shown above did self-correct - generally in less than a year.


"When your heart breaks, you choose what to fill the cracks with. Love or hate. But hate won't ever heal. Only love can do that."

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Now if you could show that recessions didn't go away during conservative administrations, and did go away during liberal administrations, that might support the point of the cited article. However, that doesn't seem to be the case.

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FDR continued to do so until WWII came along and finally boosted the economy out of the Depression.

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Originally posted by Geezer:
But as noted above, recessions ended when conservatives were in power, in about the same length of time as when liberals were. Something ended these recessions. If not the conservative administrations, then tell me what?

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Originally posted by Storymark:
And by self-correct, you mean pad the pockets of the already wealthy, while decimating the working class.

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Ha! What was this if not massive government spending?? And it was for economically useless things like bombs that would explode on the other side of the world. But you admit, it stimulated the economy. Pretty much the definition of Keynesian spending!

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Originally posted by kpo:
Look, it's conventional wisdom that economic performance is cyclical - it goes up and down all on its own. So please stop making this point about recessions going away under conservatives. The question is, can government ease the pain of the downturns, and speed recovery? And should it? Liberals have answers, and ideas, to these questions.

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Do conservatives, or libertarians?

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Ha! What was this if not massive government spending?? And it was for economically useless things like bombs that would explode on the other side of the world. But you admit, it stimulated the economy. Pretty much the definition of Keynesian spending!

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Originally posted by Geezer:

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Originally posted by Storymark:
And by self-correct, you mean pad the pockets of the already wealthy, while decimating the working class.

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I'd ask for a cite for that, but that'd be pretty pointless.


"When your heart breaks, you choose what to fill the cracks with. Love or hate. But hate won't ever heal. Only love can do that."

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Some conservatives and libertarians believe that with less government involved in business, recessions wouldn't occur, or would be weaker. If you don't break it, you don't need to fix it. Supply-siders favor tax cuts to promote capital investment.

Some blame the "Great" recession partly or wholly on the government monopoly given to Fannie Mae and Freddy Mac, allowing them to create the housing bubble.

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Originally posted by SIGNYM:

BTW GEEZER, there was a huge recovery under FDR from 1930-1936. By the spring of 1937, production, profits, and wages had regained their 1929 levels.

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But in 1936, the Federal Reserve had tightened the money supply, and the US Treasury had insisted in budget cuts and increased taxes to "balance the budget". As a result, the economy took a swift downturn in 1937.

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Your reading of the Great Depression, and the lessons to be learned from it, is superficial at best.

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And you will probably shut your eyes and stuff your ears to the painfully obvious lessons of reality.

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Originally posted by Storymark:
Only pointless because you choose not to deal with information that doesn't fit your pre-conceived notions, maybe - but sorry, Grampa, its not ME who dissapears when asked for cites.



http://economix.blogs.nytimes.com/2013/09/10/the-rich-get-richer-throu
gh-the-recovery/?_r=0

http://tcf.org/work/workers_economic_inequality/detail/a-tale-of-two-r
ecoveries/

https://www.stanford.edu/group/recessiontrends-dev/cgi-bin/web/resourc
es/research-project/wealth-after-great-recession-who-lost-who-recovered-and-why

http://www.mercurynews.com/business/ci_24065108/wealth-gap-widens-rich
est-1-percent-earn-biggest

And seriously - are you pretending that it didn't happen?

Are you fucking serious?

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Originally posted by SIGNYM:
OK? If you're going to make a point, stand with it.

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Not per wiki

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By the spring of 1937, production, profits, and wages had regained their 1929 levels. Unemployment remained high, but it was slightly lower than the 25% rate seen in 1933. The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 percent and production of durable goods fell even faster.

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Once again, the data on wiki shows a slight downturn, but not much and not long. Cites for your claim would be nice.

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Yep. they tried this after getting so far in debt, and with so much deficit spending going on to support the economy, that things would have broken down one way or another.

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My point is that no one has shown that liberals throwing money at recessions has had any greater effect on them than conservatives letting them self-correct.

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Originally posted by Geezer:
My point is that no one has shown that liberals throwing money at recessions has had any greater effect on them than conservatives letting them self-correct.

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Originally posted by M52NICKERSON:

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Originally posted by Geezer:
But as noted above, recessions ended when conservatives were in power, in about the same length of time as when liberals were. Something ended these recessions. If not the conservative administrations, then tell me what?

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Having conservatives in power does not mean they went with conservative ideals. Just look at Reagan in the begining he cut taxes and spending but truned right around started to raise taxes as well as increase spending which grew the national debt. The only differnce between Reagan's policies and liberal ones what what he threw money at.

GW Bush had a very light recession but as the unemployment rates went up he increases benifits for the unemployed...again not very conservative.

I do not fear God, I fear the ignorance of man.

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Originally posted by SIGNYM:
Funny, I quoted wiki myself.

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By the spring of 1937, production, profits, and wages had regained their 1929 levels. Unemployment remained high, but it was slightly lower than the 25% rate seen in 1933. The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 percent and production of durable goods fell even faster.

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BULLSHOID! I've disproved this several times already- charts, graphs, cites- the works. Are you as incapable of learning as rappy?

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Many of the EU nations which wound up in debt didn't do so until AFTER they hemorrhaged money into their overextended private banks. In 2006, government external debt in Spain was 17%, in Ireland was 20%, and in Portugal 48%. Hardly a problem and much MUCH better than England or the USA. Greece was the exception, at 86%. Please get that into your head, I really don't want to have to refute your STUPID IDEAS any more.
http://stats.areppim.com/stats/stats_gvtdebtxgdp_02x11_piigs.htm

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The Maastricht convergence criteria demand Euro zone members to keep government debt under 60% of GDP. By the end of 2010, PIIGS were well above the benchmark (ECB Fiscal Dashboard) :
•Portugal : 93%
•Ireland : 96%
•Italy : 119%
•Greece : 143%
•Spain : 60%

This huge public debt comprises loans by domestic and foreign creditors. Although high debt entails serious issues irrespective of the nationality of the creditors, the portion of debt borrowed from non-residents — commercial banks, governments or financial institutions — poses a particular problem. While domestic loans may be paid in local currency to resident creditors upon whom the government holds strong bargaining power, external debt, including interests, must be paid in the currency in which the loan was made to creditors capable of harsh financial retaliation in case of non-compliance.

A big chunk of PIIGS public debt is owed to non-resident creditors. As shown in the chart, this portion is above or close to the Maastricht mark in several countries of the PIIGS area. The long term trend of the external public debt follows an upward path, with annual average growth rates going from 5% to 19% (doubling time of 14 to 4 years), generally higher than GDP growth rates.

A debt crisis occurs when a country with a weak economy is unable to produce and sell goods and generate a flow of profitable returns strong enough to repay external debt. The International Monetary Fund (IMF) is one of the agencies that keep track of the country's external debt and drive the recovery process in coordination, in the case of PIIGS, with the European Central Bank (ECB) and the EU Commission. The debt crisis stroke in sequence Greece (23 Apr 2009), Ireland (21 Nov 2010) and Portugal (6 Apr 2011), after they had employed a number of subterfuges to turn around Maastricht rules, hide the real situation of their national accounts, and escape the consequences of their finances mismanagement. Unfortunately, since 2009, in an environment of widespread GDP stagnation and correlated poor export performance, government external debt pursues its rise in Portugal, Ireland and Spain, and keeps at high levels in Greece and Italy, sending an advance warning of an increasingly severe situation to come.

Most of the external government debt consists of the so-called "sovereign debt", in other words bonds issued by the national government in Euros or a foreign currency, in order to finance the issuing country's economy. To repay this debt, governments count on a flow of government revenue fed by taxes on a growing GDP and a positive trade balance. However, the misuse of funds in wrongly selected projects, such as the financing of onerous military expenditure in Greece, or in contributions "à fonds perdu" or at non-economic conditions to rescue failing financial and non-financial industries, as it is the case in Ireland, Portugal and Spain, or to finance projects whose payback is complacently valuated, can impair exports and weaken GDP. The hoped for fiscal revenue will abort, making it difficult to repay sovereign debt. Such a risk translates into higher interest rates and credit freezing, further worsening the debtor's situation.

A default happens when the borrower government fails to pay interest or principal on schedule, whether because it is unable or unwilling to do so. In face of the debtor's default, the only recourse for the lender, unable to seize the government's assets, is to renegotiate the terms of the loan. A country that defaults on its sovereign debt will have difficulty obtaining a loan in the future, a serious threat to a modern and open economy. The rescue plans requested by Greece, Ireland and Portugal and imposed on them by the IMF, ECB and EU are aimed at preventing these countries from defaulting.

Notwithstanding the positive words and wishful thinking of the overseers and monitors delegated by IMF & partners, the outlook for PIIGS does not justify much optimism. Short of a strong turnaround of the world economy inducing a booming demand for exports from these countries, it seems technically unfeasible to overcome their debt situation by applying the range of financial disciplinary measures that seem more adept to cripple the economy and kill the patient while claiming to cure the illness.

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And European banks, when they came close to failing, had nothing to do with government debt.

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There was a huge real estate bubble in Ireland, Scotland, and England. What are you going to blame THAT on... Fannie and Freddie??? [/snicker]

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My point is that you have direct comparisons- Before and after in the case of 1935 to 1937, and side-by-side in the case of the EU and the USA today. But if you keep bringing clearly erroneous "facts" to the table with that old rhetorical dodge "some say", you'll muddy the discussion. Which is probably your point.

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You'll be out? How convenient for you.

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Originally posted by m52nickerson:
Conservatives have not let recessions self correct. Of the recessions you posted under conservative Presidents all had some type of stimulus brought about.

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Originally posted by Geezer:
So you're saying that the article that says that Conservatives have no ideas what to do about recessions is wrong?

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And this is supposed to be a victory for Liberal reaction to recession/depression? After nearly eight years, the unemployment rate was slightly lower than 25%

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So show me where you "proved" it.

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Did you even read this cite?

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The Maastricht convergence criteria demand Euro zone members to keep government debt under 60% of GDP. By the end of 2010, PIIGS...

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And the 1929 to 1937 comparison that shows a still lousy economy, high unemployment, and inability to sustain stability after nearly eight years of throwing money at the problem is considered a good example of liberal ideas?

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Then again, when you cite Keynesian economists, isn't that just "some say"?

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And all it did for you was give you time to think up insults.

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So you're saying that the article that says that Conservatives have no ideas what to do about recessions is wrong?-Geezer

Yes that is what I'm saying. Conservatives, at least some of them, know what to do and that is not be conservative.-Nick

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And it only took ten years of liberal ideas and a world war that left 50 to 80 million people dead to work. Not what I'd call a success story.

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Originally posted by m52nickerson:

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Originally posted by Geezer:
So you're saying that the article that says that Conservatives have no ideas what to do about recessions is wrong?

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Yes that is what I'm saying. Conservatives, at least some of them, know what to do and that is not be conservative.

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According to Keynesian economists, a combination of deficit spending and the lowering of interest rates slowly led to economic recovery.[63] However, conservatives insist that the significantly lower tax rates caused the recovery.

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Originally posted by SIGNYM:

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And this is supposed to be a victory for Liberal reaction to recession/depression? After nearly eight years, the unemployment rate was slightly lower than 25%

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Yes, because following the "free market" path is what caused the crash in the first place. And, as WWII demonstrated, it's not the the answer wasn't government spending, its just that the answer was MORE government spending.

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So show me where you "proved" it.

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http://www.fireflyfans.net/mthread.aspx?tid=49834
This time, read with comprehension.

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Did you even read this cite?

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The Maastricht convergence criteria demand Euro zone members to keep government debt under 60% of GDP. By the end of 2010, PIIGS...

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Thank you for proving my point. The crisis - which began in 2008- didn't START with EU government debt. But that's where is wound up... with governments hemorrhaging money to prop up private banks. Again, next time read with comprehension.

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And the 1929 to 1937 comparison that shows a still lousy economy, high unemployment, and inability to sustain stability after nearly eight years of throwing money at the problem is considered a good example of liberal ideas?

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Ok, let's expand the comparison- 1920 to 1930, Yep, after a full decade of "free market" economics, the economy was in great shape. (not) Yanno, like 2000 to 2008.

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The Roaring Twenties was a decade of great economic growth and widespread prosperity driven by recovery from wartime devastation and postponed spending, a boom in construction, and the rapid growth of consumer goods such as automobiles and electricity. The economy of the United States, which had successfully transitioned from a wartime economy to a peacetime economy, boomed and provided loans for a European boom as well. However, there were sectors that were stagnant, especially farming and mining. The United States augmented its standing as richest country in the world, its industry aligned to mass production and its society acculturated into consumerism. European economies had a more difficult readjustment and began to flourish about 1924.[3]

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Then again, when you cite Keynesian economists, isn't that just "some say"?

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What is the difference between saying "Keynesian economists say..." and "Some say..."? The difference is after "Some say" you can fill in literally anything at all. Some say the moon is made of green cheese. Well, yeah, somebody, somewhere might have said that... maybe.

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Originally posted by Storymark:
Did Geezer actually just ask the difference between a specific refrence to a school of thought, to a deliberately vague catch-all like "some people?"

Damn.

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Originally posted by Storymark:

http://economix.blogs.nytimes.com/2013/09/10/the-rich-get-richer-throu
gh-the-recovery/?_r=0

http://tcf.org/work/workers_economic_inequality/detail/a-tale-of-two-r
ecoveries/

https://www.stanford.edu/group/recessiontrends-dev/cgi-bin/web/resourc
es/research-project/wealth-after-great-recession-who-lost-who-recovered-and-why

http://www.mercurynews.com/business/ci_24065108/wealth-gap-widens-rich
est-1-percent-earn-biggest

And seriously - are you pretending that it didn't happen?

Are you fucking serious?

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Originally posted by kpo:

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And it only took ten years of liberal ideas and a world war that left 50 to 80 million people dead to work. Not what I'd call a success story.

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Everyone has different pictures of what caused the great depression, what prolonged it, and what improved things. 'Ten years of liberal ideas' is a lie. Many other non-liberal policies were tried in that time, which liberals point to as having exacerbated things.

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The bottom line is that the picture is murky, murky enough for both sides to claim that the other side's policies were primarily/entirely to blame (as you're doing). For this reason I see debates about the great depression amongst lay people as pretty pointless.

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However. You admit yourself that WWII boosted the US economy out of depression. I don't think you realise the significance of this admission. WWII was like an acid test for Keynesian policies - massive government spending on mostly non economically useful things. If you concede that WWII boosted the US economy you concede that Keynesian policies work. And then perhaps you need to go back and re-evaluate your whole understanding of the great depression, and what policies made it worse, and what policies alleviated it.

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So liberals credit deficit spending, like they always do, and conservatives credit tax cuts, as they always do. Who's right?

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I'll drop it if SignyM does.

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If you consider having a world war with tens of millions of deaths an acceptable price for ending a depression, this might be a valid point. However, the Keynesian solution did not work for the first 10 years of the Great Depression. But you don't want to debate the Great Depression, so why bring it up?

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Originally posted by SIGNYM:


BTW GEEZER, there was a huge recovery under FDR from 1930-1936. By the spring of 1937, production, profits, and wages had regained their 1929 levels. But in 1936, the Federal Reserve had tightened the money supply, and the US Treasury had insisted in budget cuts and increased taxes to "balance the budget". As a result, the economy took a swift downturn in 1937. Your reading of the Great Depression, and the lessons to be learned from it, is superficial at best.

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Originally posted by Geezer:
So liberals credit deficit spending, like they always do, and conservatives credit tax cuts, as they always do. Who's right?

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Originally posted by Geezer:

July 1981 – November 1982: 14 months (Reagan)
July 1990 – March 1991: 8 months (Bush I)
March 2001 – November 2001: 8 months (Bush II)
March 2003 – May 2004: 14 months (Bush II)
December 2007 – June 2009: 18 months (Bush II and Obama)

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I'd appreciate a cite for the non-liberal ideas tried, and their effect.

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Regarding the policies of President Hoover, economists like Barry Eichengreen and J. Bradford DeLong point out that President Hoover tried to keep the federal budget balanced until 1932

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In June 1937, the Roosevelt administration cut spending and increased taxation in an attempt to balance the federal budget.[94] The American economy then took a sharp downturn, lasting for 13 months through most of 1938.

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Calls for greater government assistance increased as the U.S. economy continued to decline. He (Hoover) was also a firm believer in balanced budgets (as were most Democrats), and was unwilling to run a budget deficit to fund welfare programs.

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In June 1930, over the objection of many economists, Congress approved and Hoover reluctantly signed into law the Smoot–Hawley Tariff Act. The legislation raised tariffs on thousands of imported items. The intent of the Act was to encourage the purchase of American-made products by increasing the cost of imported goods, while raising revenue for the federal government and protecting farmers. However, economic depression had spread worldwide, and Canada, France and other nations retaliated by raising tariffs on imports from the U.S. The result was to contract international trade, and worsen the Depression.[110]

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If you consider having a world war with tens of millions of deaths an acceptable price for ending a depression, this might be a valid point

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Originally posted by SIGNYM:

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So liberals credit deficit spending, like they always do, and conservatives credit tax cuts, as they always do. Who's right?

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You figure this out by applying the scientific method, and the logic of cause and effect. You DON'T figure this out by being an ideologue.

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Originally posted by SIGNYM:
Oh, and please read my previous post, and my linked post, with comprehension this time. Because this will be approximately the 10th time I've repeated the same concepts since 2007. And I'm getting a little irritated with I didn't see it! and Signy didn't say so! and Let Signy prove it!.

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Originally posted by NewOldBrownCoat:

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Originally posted by SIGNYM:


BTW GEEZER, there was a huge recovery under FDR from 1930-1936. By the spring of 1937, production, profits, and wages had regained their 1929 levels. But in 1936, the Federal Reserve had tightened the money supply, and the US Treasury had insisted in budget cuts and increased taxes to "balance the budget". As a result, the economy took a swift downturn in 1937. Your reading of the Great Depression, and the lessons to be learned from it, is superficial at best.

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Thanx , Sig. That is the conventional theory of how the history went. I was gonna post that same point in refutation of Geezer, that's how I remembered learning it when I studied 20th Century history.

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Originally posted by kpo:
You do realise that the first three years of the great depression a Republican was in charge? Have you only read revisionist libertarian history that told you Herbert Hoover was a liberal, or something?

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When the Wall Street Crash of 1929 struck less than eight months after he took office, Hoover tried to combat the ensuing Great Depression with government enforced efforts, public works projects such as the Hoover Dam, tariffs such as the Smoot-Hawley Tariff, an increase in the top tax bracket from 25% to 63%, and increases in corporate taxes.[3] These initiatives did not produce economic recovery during his term, but served as the groundwork for various policies incorporated in Franklin D. Roosevelt's New Deal.

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Non liberal policies:

1. Balanced budgets during an economic downturn

Both Hoover and Roosevelt were keen to keep a balanced budget, even while the economy had not recovered. From Wiki:

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Regarding the policies of President Hoover, economists like Barry Eichengreen and J. Bradford DeLong point out that President Hoover tried to keep the federal budget balanced until 1932

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In June 1937, the Roosevelt administration cut spending and increased taxation in an attempt to balance the federal budget.[94] The American economy then took a sharp downturn, lasting for 13 months through most of 1938.

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Calls for greater government assistance increased as the U.S. economy continued to decline. He (Hoover) was also a firm believer in balanced budgets (as were most Democrats), and was unwilling to run a budget deficit to fund welfare programs.

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This can all be seen from this graph, which shows that US debt was flat for most of the GD - in other words no deficit spending - against what Keynes pleaded for.

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2. Protectionism

Again, from Wiki:

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In June 1930, over the objection of many economists, Congress approved and Hoover reluctantly signed into law the Smoot–Hawley Tariff Act. The legislation raised tariffs on thousands of imported items. The intent of the Act was to encourage the purchase of American-made products by increasing the cost of imported goods, while raising revenue for the federal government and protecting farmers. However, economic depression had spread worldwide, and Canada, France and other nations retaliated by raising tariffs on imports from the U.S. The result was to contract international trade, and worsen the Depression.[110]

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So you see, the idea that the GD was just 10 years of unrestricted liberal policies is a disingenuous libertarian fantasy.

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Now. Back to the graph above. When did the US debt explode, and deficit spending really begin? The onset of WWII right? As I've been telling you - that's when Keynesianism really kicked in.

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What exactly about WWII do you think ended the GD?? You think it was all the killing, and destruction? You think European bombing raids, gas chambers and ground offensives spurred US economic growth?

You're pretty confused here aren't you.

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