3 years ago: Rendering unto Krugman

3 years ago: Rendering unto Krugman June 28, 2013

June 28, 2010, on this blog: Rendering unto Krugman

But knowing their hypocrisy, he said unto them, “Why are you putting me to the test? Bring me a dime and let me see it.”

And they brought one. Then he said to them, “Whose head is this — FDR’s or Herbert Hoover’s?”

They answered, “Roosevelt’s.”

And he said unto them, “Right. So shut up. Have you morons already forgotten the 20th Century? When the choice is between imitating what worked and what really, really didn’t work, why are you pretending it’s terribly complicated?”

And after that, no one dared to ask him any question.

P.S.: The archive links for the original Blogger site are unreliable, but 11 years ago today — June 28, 2002 — I posted the first few entries of Slacktivist 1.0 (a regrettably neo-lib take on Cleveland’s school voucher program, followed by a few still-relevant Pat Robertson jokes). And here we are, 11 years, three blogging platforms, thousands of posts, and nearly 3/16 of a book review later. Time flies.

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  • By god. This is the stupidest argument I’ve heard since the argumentum ad baculum.

    What does having one’s face imprinted on a coin have to do with the success of one’s policies? Is not charisma the more reliable indicator of having one’s face imprinted on a coin? Besides, Herbert Hoover was the first president to attempt any sort of government-sponsored economic stimulus and led Congress to raise the top income tax rate from 25% to over 60%. Also, since when was correlation causation?

    Also, is not the dime the most meager of coins?

  • Steve Buchheit

    Happy blogging anniversary. I wonder if Hallmark makes a card for that?

  • Happy Blogiversary, Fred! I wish you eleventy more!

  • AnonCollie

    If you’re honestly that slow that you can’t see the point of deliberately rewriting a scripture story for satire’s sake, you’re really in the wrong place.

    Hoover’s efforts were based purely on a business-centric point of view. He trusted that with proper stimulus, the economy would rebound. But this is the Great Depression we’re talking about. Business is all well and good, except when people are having their homes taken out from under them, when there are no jobs to be had, and when they’re starving to death.

    FDR’s New Deal helped revitalize this country far more than any thing Hoover did, and he lead us through the majority of WWII. Fred is pointing out that instead of being cautious like Hoover, we should be bold like Roosevelt.

  • Of course I understood this was a rewriting of a story from the Gospels. I’m not that slow.
    Supporting raising the top income tax rate from 25% to 63% isn’t being cautious.
    It’s just the opposite of “cautious”.

  • Kubricks_Rube

    This is the stupidest argument…What does having one’s face imprinted on a coin have to do with the success of one’s policies?

    This is very clearly not Fred’s argument. His actual point is “When the choice is between imitating what worked and what really, really didn’t work, why are you pretending it’s terribly complicated?” FDR’s face on the dime is being used as a reminder that this debate is not new or even unsettled.

  • It only really “worked” in 1945-6, when FDR was dying/dead.

  • Kellandros

    Um no; despite the standard myth preferred by Conservatives that it was World War II that pulled us out of the Great Depression, we can easily see the economy improved greatly well before that point.

    ” If one defines economic health entirely by the gross domestic product, the U.S. had gotten back on track by 1934, and made a full recovery by 1936, but as Roosevelt said, one third of the nation was ill fed, ill-housed and ill-clothed. See Chart 3. GNP was 34% higher in 1936 than 1932, and 58% higher in 1940 on the eve of war. The economy grew 58% from 1932 to 1940 in 8 years of peacetime, and then grew another 56% from 1940 to 1945 in 5 years of wartime. The unemployment rate fell from 25.2% in 1932 to 13.9% in 1940 when the draft started.”
    http://en.wikipedia.org/wiki/Economic_history_of_the_United_States#Relief

  • I don’t deny there was an economic recovery between 1933 and 1940. However, as you said, it was nothing close to a full recovery-unemployment was still high.

  • Happy blog-versary as well! And nice reframing of the parable of rendering unto Caesar. :)

  • The blame for that can be laid squarely at the feet of orthodox economic thought at the time, which stated that governments should balance their budgets at the earliest opportunity, Spurred by that, the US government began cutting spending in 1937, which, because of the fragile nature of the ongoing recovery, promptly undid most of the previous four years of work.

    This penny-wiseness resulted in emergency new spending amounting to the billions of extra dollars to stanch the flood of newly-unemployed. :/

  • led Congress to raise the top income tax rate from 25% to over 60%.

    While not in line with Keynesian economic thought now or at the time, it is a truism that if you need to raise taxes, you should do so on those most able to afford it, which was the wealthy. Hoover was, while not by any means the bold experimenter that FDR turned out to be, at least smart enough to realize where he needed to get the money to keep the government going.

    Also, going back as far as the 1800s, it has often been an ad hoc remedy to economic panics for governments to put in place public works projects to put some people back to work (if only because the alternative is usually a revolution).

  • All that was necessary was a catalyst to bring about a slowing in the
    pace of credit expansion. This was provided by the stock market. Heavy
    regulation in the years leading up to 1937, including heavy taxes and
    legal impediments on inside trading, reduced incentives to invest in the
    market.

    At this point their “explanation” fails. As a general rule ~99% of the market trading volume is not new issues and instead is simply asset swaps among investors speculators.

    As such, the stock market cannot have been the transmission mechanism, contrary to the Mises Instiute’s ~ZOMG BRILLIANT~ discovery, for sagging fixed capital investment.

    What is far more simple and direct as an explanation is from Keynes: A drop in aggregate demand fed directly into a drop in fixed capital investment, which in turn turned a recovery into a recession.

  • arcseconds

    Did you actually think Fred thought the face on the coin proved something about economics, or was trying to convince the reader that it did?

    If you did, you misunderstood, which means, well, your reading comprehension needs a bit of work.

    If you didn’t, you pretended you did in a mendacious piece of sophistry. And a clumsy one, to boot, because everyone can see through it.

  • If Roosevelt’s face wasn’t on any coin, Fred’s little story would have never worked. So yes, until proven otherwise, I still think Fred thought the face on the coin proved something about economics.

  • arcseconds

    he wouldn’t have been able to use that particular parable.

    But so what?

    The point is (obviously) not that ‘FDR’s head is on the coin, therefore his economic policies were correct’, or that ‘I can use a bible parable here so therefore his economic policies were correct’.

    but rather that ‘FDR is remembered for something, what was that again? Oh yes, pulling us out of the Great Depression’.

    That depends on people understanding why FDR is remembered, of course, and also accepting it. You clearly don’t accept it, but presumably you do understand that this is the received view on the matter.

    So your points about what could possibly wind up with someone’s head on a coin are beside the point. We’re not talking about an abstract someone here, we’re talking about FDR, and we know why he was remembered.

    There. That should all be clear to you now. You didn’t understand the use of the parable, you thought the coin was used as evidence rather than as a symbol. The thing to do now is to argue your case where the real substance of Fred’s post lies.

  • BaseDeltaZero

    There’s also the fascinating way that it amounts to ‘no, government spending in the New Deal didn’t end the depression. Even *more* government spending in WWII ended the depression.’
    It only works if you use the money to kill things, you see.