samboct
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A friend of mine sent me this post along with this cartoon.
Here's the author's comments.
Take a long detailed look at the cartoon below that appeared in Newspapers Nationally in 1934. As Yogi Berra
said it is "Deja vue all over again." Our present Administration has no sense of history and refuses to even consider it even when it is challenged to do so. The economic situation in this country although difficult could have been remedied and solved months ago by any astute, experienced CEO type and loyal American. If anyone thinks that this present leader is just having a period of bad luck and bad breaks as he lectures us all the time then you are dreaming. What we are seeing is a well planned destruction of American capitalism, freedom and culture by one very angry anti American man.
Please LOOK at the cartoon below.........(maybe above?)
Here's my response:
I'd say the author of this diatribe against Obama is the one who has no sense of history- and has also forgotten whatever economics and science he ever learned....
Here's a timeline of the previous Depression along with the actions that were taken. I agree with the author of the post- they do seem very, very familiar.
http://www.huppi.com/kangaroo/Timeline.htm
Here's a chart that shows things in a nutshell:
Unemp.: Unemployment rate
Tax Federal GNP Unemp.
Year Receipts Spending Growth Rate
-------------------------------------------------
1929 -- -- -- 3.2% < Hoover era, Great Depression begins
1930 4.2% 3.4% - 9.4% 8.7
1931 3.7 4.3 - 8.5 15.9
1932 2.9 7.0 -13.4 23.6
1933 3.5 8.1 - 2.1 24.9 < FDR, New Deal begins; contraction ends March
1934 4.9 10.8 + 7.7 21.7
1935 5.3 9.3 + 8.1 20.1
1936 5.1 10.6 +14.1 16.9
1937 6.2 8.7 + 5.0 14.3 < recession begins, May
1938 7.7 7.8 - 4.5 19.0 < recession ends, June
1939 7.2 10.4 + 7.9 17.2
1940 6.9 9.9
1941 7.7 12.1
1942 10.3 24.8
1943 13.7 44.8
1944 21.7 45.3
1945 21.3 43.7
What's clear is that as Roosevelt followed Keynes prescription of deficit spending, i.e. making Uncle Sam the first customer, the economy grew, as shown by the figures from 1934- which of course, was when the cartoon was published. So the cartoonist, after the terrible suffering of 1932-1933, decried deficit spending as a means of giving the country to the Reds. Unfortunately, deficit spending worked, and unemployment dropped. But that didn't stop the Republicans back then, and when Roosevelt in 1937 cut back on deficit spending, the economy tanked again. Does being a Republican come with a set of blinders?
Now, about my comments about science and economics. I'm not an economist, but I am a scientist. Science teaches us how to analyze problems- any problem, including economics. OK, science has remained largely mute about women other than to say that they're a much more complex system than men. There are four steps in science:
1) Formulate hypotheses.
2) Gather data
3) Analyze data.
4) Adjust hypotheses.
5) Optional- iterate as needed.
Note- it doesn't really matter whether your hypotheses are correct or not when you begin collecting data. The process works regardless. It also works for economics....
There are two competing economic schools of thought. First is Keynes, represented by Krugman these days, and sort of embraced by Democrats. Keynes theory is that when the economy tanks, the government becomes the first customer and must "prime the pump" so to speak. Based on the data of the Depression, Keynes theory fits what was observed. In 2008, Krugman, using a Keynsian framework, pointed out that the stimulus being less than a trillion (he thought $2.5T was called for) was too small a percentage of the economy to really reverse the unemployment trend, and at best, unemployment would hold even. In contrast to most of the noise out there from Fox snews, it seems to me that Krugman was bang on- that the economy didn't flatline, but it's still pretty moribund. Smarter spending of the stimulus wouldn't have hurt either.
Seems to me that Keynes economic theories have fit the data pretty well to date.
Let's look at the Republican side, who if they follow any economist, seems to be Friedman. Most Republican candidates with a few exceptions (Mitt is a sharp guy, and I suspect Huntsman is as well) seem to be too dumb to understand economics, so they just prattle on about whatever they think people want to hear, but Friedman's economic theories seem to fit what they espouse. Friedman was the one who pointed out that easy money grows an economy, and a combination of low interest rates and a tax break would stimulate the economy. Reagan tried this, and lo and behold, it seemed to work. However, Bush II tried this, and it's failed miserably. Why? Well, if you look at interest rates now, they can't go any lower. Corporations are awash in cash. There's been a tax cut that's helped the wealthy. But no real economic stimulus- we've had a so called "jobless" recovery, which is an oxymoron if there ever was one. Why? Because the middle class is what grows an economy, and the middle class has been squeezed till its on life support. Under Ronnie, the tax cuts did affect the middle class, so they went out and spent it, thus growing the economy. Under Bush II, the middle class doesn't have much money, didn't get much of a tax cut, and didn't do jack to grow an economy. Neither did the rich folks- who haven't done jack yet, but if you listen to the bleating of the Republicans, if we give them another tax break, that'll fix things.
If I were a cartoonist, I'd draw something which showed the Republican practicing voodoo with the budgets, and sacrificing the middle class chicken so that the blood drops into the mouth of a rich bitch...Bush 1 called Reaganomics "voodoo economics" and he was right then, and he's right now. Seems to me that we've all turned into zombies, and that the predominant religion of the US is now voodoo....
Cheers,
Sam
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A tale of two economists - 
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