Those who repeat History are doomed to fail to remember it

>> Sunday, February 15, 2009

It's been reported that one of Ohio's members of the U.S. House of Representatives expressed concern last Tuesday that the stimulus package that eventually passed this week could cause another Great Depression, just like the programs created by Franklin Roosevelt. Representative Steve Austria has an interesting grasp of causality--perhaps he's aging backwards like Merlin or that Benjamin Button dude. From the Columbus Dispatch's Darrel Rowland:

"When (President Franklin) Roosevelt did this, he put our country into a Great Depression," Austria said. "He tried to borrow and spend, he tried to use the Keynesian approach, and our country ended up in a Great Depression. That's just history."

Congressman Austria went on to explain at some length about how the First World War led to the assassination of Archduke Franz Ferdinand after the invention of the atom bomb had precipitated World War II. He also told the reporter that his favorite movie of all time is Memento and that he'd love to see a sequel to "that Revenge Of The Sith sometime."


Nathan Sunday, February 15, 2009 at 8:09:00 AM EST  

On the plus side, he has recommended the formation of a blue-ribbon Congressional committee to investigate that new-fangled Evolution theory. "I believe there is no evidence that man is declining into monkey-dom, but only time will tell," he said.

Asked if he thought funding for the committee might be a little too open ended, he scoffed, "That's ridiculous. I believe we'll have our answers in less than 6000 years. A few billion at most."

In other news, scientists are predicting that within the next 60 years, home computers will grow to such sizes that home-owners will be adding entire wings just to house the massive CPU's of the future. "We see this as a major benefit to the home improvement industry. Anyone who doesn't invest early is an idiot. I mean, talk about a no-brainer."

John the Scientist Sunday, February 15, 2009 at 9:42:00 AM EST  

Here, Eric, the neocon is correct and the leftists wrong.

The New Deal did prolong the depression by half a decade at least. Economic pain is best felt acutely and up front, and attempts to ameliorate it reduce the pain at any point in time, but spread the pain out over a much long period. integrating the curve of negative economic impact reveal a greater area under the curve when government intervention is large.

The best description of this effect is "The Forgotten Man", which examines the negative effects of the New Deal on recovery.

Greg Mankiw (in my opinion, our greatest living economist, and not just in my opinion, in Warren Buffet's and Charlie Munger's too) ripped the typical leftist position to shreds here:

My view: When evaluating political leaders, it is better to trust "the moot mathematics of economics" than "the impression of recovery."

John the Scientist Sunday, February 15, 2009 at 10:09:00 AM EST  

Also, other businesspeople with both real business experience and a historical perspective agree that another aspect of this stimulus bill is problematic:

Bill Lane, government affairs director for Caterpillar, which has just laid off nearly a fifth of its 112,000 work force and is the tenth largest US investor in Britain, warned it was a dangerous step.

He said: "We are the first to recognise that if the US embraces Buy American then the whole notion of buying national will mestastasise and limit our ability to take part in overseas projects.

"We are students of history. A major reason a very deep recession turned into the Great Depression was the fact that countries turned inward."


"We would be a primary beneficiary of any type of infrastructure project in the US, but at the same time we are one of the country's largest exporters," he added.

This is always what happens when you give Congress the authority to spend that much money. If they were any good at real economics, they'd be in the private sector making money, not making their living spending other people's wealth.

If governments could spend their way to prosperity, the USSR would have lived up to its promise of a worker's paradise. The pernicious idea that the New Deal was somehow responsible for recovery has been taught so long people forget what a disaster it was in the ideas of critical contemporaries (and int he eyes of most economists, even the leftist ones, today).

Eric Sunday, February 15, 2009 at 11:09:00 AM EST  

Well, see John, if he'd said what you said, I'd disagree with him (and you, Mankiw, Buffet and Munger) but I wouldn't make fun of him.

Re-read the quote.

The possibility that Rep. Austria may have been attempting to parrot a controversial-but-coherent revisionist historian stance (which you're citing) that he didn't quite understand, as filtered (probably) through some talking-points-memo or radio-talk-show-host doesn't make his statement more intelligent, it makes it even less intelligent, John.

Leanright,  Sunday, February 15, 2009 at 11:45:00 AM EST  

I have a question: Obama states that his package (he he) will save 3.5 to 4 million jobs.

How is that even a measurable statistic? Why not just say it saved 500 million jobs? After all, Nancy Pelosi stated that the US is losing that many each month!

Eric Sunday, February 15, 2009 at 12:29:00 PM EST  

Honestly, Leanright: I don't have the wherewithal to answer that. If anybody who has read the package and is better at math than I am would like to defend/contradict the President's numbers, have at it.

Leanright,  Sunday, February 15, 2009 at 12:40:00 PM EST  

Well, I'm not so naive that I think the entire plan is the responsibility of Obama, but a similar plan was tried in Japan, and they never got out of their recession. Hopefully it will work, but really, there hasn't been any backtesting to show how it will.

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