Conservatives actually believe this

[cthulu2016]

Last edited Sat Jun 2, 2012, 05:58 PM - Edit history (3)

In the ongoing refutation of Keynes in favor of supply-side economics the conservatives have one big stumbling block. No matter how you slice it, World War II appears to have ended the Great Depression in America. And no matter how you slice it, government spending during WWII was massive.

But it turns out they have a theory about that. I see it in comments sections a lot. I think this is a fair statement of it:

In 1939 unemployment was over 20%. During World War II unemployment dropped to 2%. If Keynes was right this drop in unemployment caused by government spending should have created massive demand, but statistics show that Production of Consumer Goods and Consumer Consumption was up only slightly. It was only when FDR died that Truman's pro-business policies led to a surge in Domestic Consumption.

Okay, let's think about this. Can anyone think of a reason why domestic production of consumer goods increased only slightly during WWII?

Perhaps because the entire freaking industrial capacity of the nation was diverted to making things for the war. It's amazing that production of consumer goods increased at all! I would have guessed it declined. Almost every factory stopped making whatever it was making and switched to making bullets, bandages, planes, uniforms, etc..

And knowing that, can anyone think of a reason why domestic consumption of consumer goods increased only slightly during WWII? Well... firstly because you cannot buy things that are not being manufactured. And because everything was rationed. And because a few million men drawing government paychecks were not in the United States to spend them. Here's a mind-bender...even though the depression was over sales of automobile tires actually declined. Take that Keyenes! Actually,tires were rationed. People drove on tires with patches on patches on patches. I'll bet civilian miles driven dropped sharply too, since gasoline was rationed. Women making good money for the first time in their lives working in defense plants still had to draw lines on the back of their legs with a pen to simulate seamed stockings because all nylon went to parachutes.

Plus, all manner of domestic consumption was considered unpatriotic. A lot of workers' increased pay went right into war bonds, since there wasn't anything to buy anyway.


But what I wanted to get to is the third leg of the argument...

"Production and consumption of consumer goods did not pick up until FDR died and Truman's pro-business policies were implemented."

Is there any reason, aside from pro-business policies, that the production of consumer goods might have picked up under Truman?

THE WAR ENDED. Sheesh! The factories went back to making consumer goods. General Motors stopped making tanks and went back to making shiny new cars for people to buy. Nylon stockings became available. Aluminum cookware became available. Copper, which was used in all electrical devices, all appliances, all radios, etc. became available for use in products other than war machines. (Copper was so needed for the war that we made pennies out of steel one of the years.)


I swear, these folks are not even trying.

[longship]

1. R&K

Good argument.

[Lasher]

2. And then they have that problem with results of the GWB years.

Which was laissez faire supply-side economics on steroids. If neoliberal economic ideology is such a great idea, how could it have led to such catastrophic results?

[Confusious]

3. No, they're trying

Twisting their brains into pretzels to justify their failed theories, and to ignore the obvious, takes a lot of work.

[Jim Lane]

4. Yes... they're very trying. (n/t)

[fascisthunter]

15. .

[rfranklin]

5. Fannie Mae and Freddie Mac burst the bubble of Bush's mighty economic boom!

You can provide all the info about how 80% of subprime mortgages were privately written and derivatives that packaged the crappy mortgages and the response will be, "Well, Barney Frank forced them to!"

IN the same vein I was reading a Heritage Foundation recap of Bush's employment stats, which were the "worst ever" according to the WSJ. They just left off the last year of employment figures! Made Bush seem like a job dynamo.

[rucky]

9. The double stupid in that statement

is that they blame Barney Frank / ACORN / the Community Reinvestment Act

the trouble is, mortgage brokers were not subject to the CRA mandate, and they originated over 70% of the subprime loans

[booley]

18. The illogic boggles the mind

I mean lets boil it down to what is required for Conservatives to be right on this..

It means that in a political system where money equals power (and even cons agree with this)...

....those with the least amount of money were able to politically get their way at the expense of those who have LOTS of money..

....and were able to do this not once but repeatidly for decades.

It's Orwellian. I think they really do believe the weak bully the strong and see any attempt at leveling the playing field so those at the bottom have a chance as an example of this.

[dinopipie]

6. The stupid it burns!

One cannot nor will be able to reason or compromise with 'people' that stupid, unfortunately that is the GOP base today.

Conservatives, Teahadasts and their allies we can't live with em any longer and we can't shoot em so what is the solution?

[SnowCritter]

7. K & R

Well said!

[salin]

8. factor in rationing programs, due to the diversion of manufacturing

that also dampens consumption.

[Cosmocat]

10. With all their flag waving Bullcrap

you would THINK the republicans would factor this in.

Fact is, the entire country, in actually being forced to SUPPORT the war effort, was limited on pretty much any possible domestic good. You couldn't buy a new set of tires because all new rubber had to go toward THE WAR.

[link:http://history1900s.about.com/library/photos/blywwiip125.htm|

[Scootaloo]

26. Allow me to explain.

Here's what you do. You take all that stuff in the OP and follow-ups. All that stuff about wartime production vs. consumption, all that stuff about wartime economies, all that Keynesian theory, and look at it. it's a lot of stuff, isn't it? It requires you to do some thinking, and presumes that you understand some basic principles of economic theory in general.

Now you take that, and you present it to a bunch of people who, very fervently, believe that having the middle name of "Hussein" makes a man a terrorist.

You would have an easier time getting your cat to read James Joyce aloud than you are going to have trying to get economic thought of any complexity beyond "RICH GOOD POOR BAD!" through a conservative's head.

[Cosmocat]

27. yeah

I know.

I am no genius, but simple common sense runs against 99% of their BS.

But, somehow, it squares with them.

[Scuba]

11. Critical thinking is not a Republican value.

[TahitiNut]

12. There is no learning disability so severe

... as the outright REFUSAL to learn from the facts that are plain for all to see. It staggers all reason that these people are so profoundly, abjectly, and extremely STUPID that they somehow see some insane "virtue" in adhering to myths and falsehoods so blatantly corrupt.

I have a "theory." Prions. The "Mad GOP" analog to "Mad Cow." It's gotta be in their water.

[WriteWrong]

22. I'm developing a (literary, not scientific) theory that certain thoughts create prions...

...the real reason listening to Rush, Glenn Beck, Stormfront, etc. is so bad for people. Some thoughts are just so sick and twisted that they require sick and twisted proteins to remember them....

...and then conventional prion theory takes over.

Laurie Anderson was wrong. Only SOME language is a virus.

[Wounded Bear]

13. Never underestimate their ability to cherry pick data....

and use selective memory.

Could it be that unemployment dropped to 2% because nearly 10 million people were employed by the armed forces?

Nahhhhh! Couldn't be!

And when in the hell did Truman become a conservative hero?

[malthaussen]

14. I had a brief argument with a capitalist about the USSR once

His contention -- wait for it -- was that if Communism were superior to Capitalism, then the USSR would have been far ahead of the US by the time of our discussion (circa 1985-ish). Think about that a second.

1) The USSR lost somewhere in the range of 20-25 million people in WWII, or roughly 10% of the population, and the most
productive 10% at that.
2) Also in WWII, the most industrially-advanced areas of the USSR were overrun, razed, and looted to the point of virtually erasing whatever progress had been made since the Revolution. This includes factories, dams, infrastructure,
housing -- you name it.

In contrast, the US was hardly touched by the war. Sure, we lost a lot of good young men. But not even a tenth of the number the USSR lost -- a country of comparable population. Yet they should have been "ahead" of us?

Needless to say, he never responded to my critique.

-- Mal

[fascisthunter]

16. they pretend to believe it, but are just full of shit

it's why I think most of them are touched in the head.

[shcrane71]

17. Repubs aren't trying. Often, I wonder if Repugs are the way they are because

it would cost them a job, or promotion, or make them less desirable in the job market.

But when someone is retired and still a Republican, I just don't get it. You can stop pretending to be stupid, and start thinking critically again.

[lumberjack_jeff]

19. Morons. Ask them if they know what this is.

[TrogL]

20. Conservatives would love to co-opt Keynes

The Conservative Prime Minister follows many Keynesian policies and tries to pretend they aren't.

[DearAbby]

21. Mom spoke a lot about RATION COUPON books

They rationed everything for the war effort.

[pansypoo53219]

23. BUTBUTBUT you must BELIEVE in supply side + the religion on ronny reagan.

it's faith based economic religion now. like mormonism or snake handling.

[SheilaT]

24. I used to read old Life Magazines.

Two different universities I attended had bound issues going back to issue number 1 in November of 1936. Over a period of several years I read every issue, sequentially, through the end of March, 1945. It is as if I lived through those years.

I learned at least as much through the advertizing as I did through the articles. All during WWII, many, perhaps most of the ads, served only to remind people why they could no longer purchase all sorts of consumer things, but that they'd be able to after the war. There were even ads for television, saying things like: after the war is over you'll be able to watch your favorite performers, like Bob Hope and Bing Crosby, on television.

There were also ads telling housewives how to make sheets last indefinitely, because they were almost impossible to buy now. As for cars. sometime in early 1942 all automobile production stopped completely in this country. All the car manufacturers switched over, in amazingly short time, to building things like tanks instead. There were NO model 1943 or 1944 cars at all. I'm not even sure there were very many 1945's.

Because so many fewer consumer goods were available, people were essentially forced to save. They were also greatly encouraged to do so by all of the campaigns encouraging people to buy War Bonds. Millions upon millions of dollars were used to buy them, since people couldn't purchase cars or too many clothes or much in the way of furniture. Housing production virtually ceased. For a couple of years after the war there was a serious housing shortage in this country.

Another interesting thing is that by the end of 1944 it was obvious that we were going to win the war. It was just a matter of time. And starting in late 1944 people started cashing in their war bonds. There was this enormous pent-up demand for all sorts of consumer goods, and THAT'S a huge part of why our economy took off and just grew and grew for the next couple of decades.

I could go on, but I'll stop here. I really, really learned a lot from reading the old Life Magazines.

[raccoon]

28. Great post. Post some more on the subject any time you feel like it. nt

[laundry_queen]

25. They have never been able to refute Keynes .

They keep saying they have. They keep saying "Keynes has been debunked". Like everything else they figure they can say it a million times and hope that everyone just starts believing them. And the dumb ones will.

[librechik]

29. all manufacturing during WWII, right down to alarm clocks, went to the war effort.

In essence, there were no consumer goods during that period. After the war, with Europe devastated, there was a huge need for everything to rebuild society. We had practically no competition from other states post war, because they had no infrastructure. Big boom for us!