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On November 30th, 1899, at Sixteenth and Folsom Streets in San Francisco, Berkeley defeated Stanford 30-0 in the Big Game. The most famous trophy of the game was the Axe, which had been introduced in the baseball Big Game that spring. But with this victory, the second in a row for Cal football, Mayor James Phelan of San Francisco also awarded Berkeley a finer and more substantial trophy, a lifesize bronze statue called “The Football Players”, which stands today in a grove toward the west side of campus, on the way up into the university from downtown Berkeley.
Douglas Tilden was born in 1860, and attended the California School for the Deaf in Berkeley. He went to New York and then to Paris for further studies. He finished “The Football Players” at the end of seven years in Paris — note that, apart from being French, the players are dressed for rugby rather than American football. He did several other public sculptures in the Bay Area, including the “Baseball Player” in Golden Gate Park, the Mechanics’ Monument on Market Street downtown, and the California Volunteers’ Memorial at Market and Dolores. The monuments are bombastic in the style of the day, and hard to look at seriously now. (My daughter likes the Volunteers’ Memorial, not because she’s passionate about the Philippines War but because the horse has wings.) But the “Football Players” does something quite different than any of these, turning the conservative academic style to recognizably human ends — the composition, angles of the limbs, etc, harmonize with the gazes and the points of contact between the bodies, making a vivid if prettified image of male friendship and physical intimacy.
Photo by Flickr user marymactavish used under a Creative Commons license.
As Paul Krugman says,
Krugman deals with her wages argument there. But she gives half her column to the unemployment statistics story again, apparently in the hope that if she makes it seem complicated and controversial, it will look as if she’s got it right. Let me spend some virtual column inches on this one more time.
Amity Shlaes lives in New York. She has a unique advantage: in many cities, access to a world-class research library, if one exists at all, is open only to members of a university community. But in New York, the Public Library is a world-class research library.
Suppose like Amity Shlaes you’re in New York. Suppose further you’re a sufficiently honest and competent researcher wishing to find out historical statistics of US unemployment in the 1930s. What would you do? You would go to the New York Public Library—for the purposes of this story it doesn’t matter whether you
goes go to the main reading room on 5th Avenue and 42nd Street or the Science, Industry, and Business Library on Madison and 34th. Both are free and open, both easily accessible by a variety of major subway lines, and both have convenient hours that extend into the early evening in case you’re tied up during the working day.
If you go either to the main reading room or the SIBL you will find—and if you do not, a research librarian will be happy to show you—the current edition of Historical Statistics of the United States on open shelves—you don’t even have to page it from the stacks and wait for it.
If you open it up and look under B, “Work and Welfare”, then under Ba, “Labor”, then under “Employment and Unemployment” for a historical series on unemployment, you will find David Weir’s series from Research in Economic History, and if you read the footnotes, you will understand why Weir’s revision is regarded as superior to earlier versions. If you’re really curious, you might want to read the relevant issue of Research in Economic History to see how the debate proceeded; there’s a long forum there that includes Stanley Lebergott and takes in the work of Christina Romer (economic history is a small world). Unfortunately it looks as though NYPL doesn’t have the 1992 volume, so you might have to go somewhere else to do it.
But at this point you’re in possession of the relevant information. And if you’re not in New York or otherwise near a major research library, or maybe you don’t want to undertake this experiment yourself, you can read a summary of what you’d find here. Where I pointed out, quite politely, and in respect of which I point out, quite politely again, if you have got this far and you now choose to use a different series than the ones in HSUS, you are not doing what a sufficiently honest and competent researcher would do.
Shlaes spends a lot of time on the bona fides of Stanley Lebergott, who compiled the series that’s now considered pioneering, yet flawed. This is foolish ad hominemism; Newton was a pretty impressive fella, but Einstein improved on his physics.
And Shlaes’s method is by now suspect. It led her to praise the Bush administration’s competence in the wake of Katrina and then to acknowledge the administration’s incompetence but to blame it on the president’s wise respect for federalism. It led her to agree with Phil Gramm about our current crisis being “mental” and America being a “nation of whiners”. And it led her, as a correspondent points out by the email, to this prediction:
A house is inherently more lovable an object than cold metal or a stock certificate and so it is harder to part with. This means that the housing market cannot be as volatile as the others. In other words, while house prices may sag and sag, they will not pop.
She wouldn’t be worth responding to, you know, if she didn’t have free access to the op-ed pages of major newspapers, to the airwaves of PBS and even Comedy Central. But she does. It’s a mystery.
PS: Michael Cembalest says in his summary by email,
For the anti-FDR crowd that believes that WPA/CCC workers were not really employed: that would mean that the pre-war decline in unemployment to 10% by 1941 is even larger and more impressive, and that fiscal stimulus did an even better job. Another anti-FDR myth asserts that employment only improved via government workers; a chart decomposing civilian, government and emergency workers shows that all 3 contributed meaningfully to the employment gains of the late 1930s. I have relatives that despise FDR but can’t remember why; this phenomena seems to infuse a lot of the ideologically-based research against the fiscal policies of that era.
PPS: It also doesn’t matter that, per Shlaes, Barack Obama may have had Lebergott’s series in mind when he referred to unemployment in 1932-33. The president-elect is not, so far as I know, offering his services as an expert commenter on the subject.
PPPS: I took so long to write this, what with the patience and the reasonableness, that DeLong got in first, claiming Shlaes has ventured into “flunking the Turing Test territory.”
Today is the 66th anniversary of the worst nightclub fire in American history. On November 28, 1942, Boston’s Cocoanut Grove — located just south of the Common — erupted in flames that killed hundreds within a mere 15 minutes. The club was stuffed that Saturday night with sailors on shore leave, young men from other branches who were preparing to head overseas for the war, as well as football fans who’d watched Holy Cross dismantle Boston College, 55-12, earlier in the day.
The fire began innocently enough, when a busboy — trying to replace a light bulb — lit a match while fumbling about in the dark, looking for the socket. Though he believed he’d extinguished it, the smoldering match accidentally set fire to a cluster of artificial palm fronds. As it turned out, the bulb he was trying to replace had been removed by a young couple who were making out at one of the tables in the Melody Lounge, one of several large rooms in the club.
The busboy survived; the fate of the couple could never be determined.
One of the most popular attractions in the city, the Grove could not have been rigged better for a catastrophe of this magnitude. To deter freeloaders, the club’s owners had sealed off most of the exits, going so far as to weld them shut. At the time of the disaster, there were only two functioning public entrances to the club. One was a pair of doors that swung inward, while the other was a single set of revolving doors. Both exits quickly choked with bodies when the fire — propelled by leaky refrigerator gas, flammable decorations, drapes and furniture that filled the club — surged from one room to another and up the stairwells to the building’s top floors.
Everybody panicked. I knew there was a door across the dining room, but about 150 people were headed for it, and everybody was pressed together, arms jammed to our sides. The flame came down the side of the dining room like a forest fire, and within minutes, the stage was consumed with fire. Before I could get out, I got pushed through a door and fell head over heels downstairs into the kitchen and landed on other people.
At the foot of the stairs, I was lucky enough to get on my feet. Everybody was scrambling, trying to break doors to the stock room. I said forget it, they don’t go outside. I saw a heavy lady, Mrs. [Katherine] Swett, the cashier. I said, ‘Take the money, let’s go,’ but she said, ‘I can’t leave the money.’ Later, I saw a big person burned to death, and it was her.
Amazingly, some of the club’s employees tried to make sure that fleeing patrons settled their bills and paid for their coats at the check stand. During the recovery effort, officials reported that dozens of corpses had been robbed.
The final death toll eventually reached 492 — roughly half of the night’s patrons. The owner of the Cocoanut Club, Barney Welansky, served four years in prison for negligent homicide. Released in 1946, he died several weeks later of cancer.
Shortly after the fire, the city council passed an ordinance that banned “Cocoanut Grove” from ever being used to name another building in Boston.
(Fire-related trivia: The next time you pass through a set of revolving doors, take note of the flanking set of conventional hinged doors. Those became standard after the Cocoanut Grove fire…)
In the summer of 1968, Charles Schulz—born yesterday in 1922—decided not to take the path of least resistance. In the first months of the Presidential race, the politics of Peanuts were as inscrutable as ever:
Though I clearly know absolutely nothing about the state of history education, I feel pretty certain that if my son continues to learn about Rosa Parks, he’ll eventually find a career suppressing free speech, blowing up ancient monuments, stoning promiscuous women, and harassing ethnic and sexual minorities.
The president-elect at St. Columbanus school in Chicago today.
On this day in 1986, President Ronald Reagan announced that rogues in the White House had secretly diverted money from arms-for-hostages trades with Iran to the CIA’s rebel army in Nicaragua.
Investigators for Attorney General Ed Meese found the so-called “diversion memo” in the offices of National Security staff member Lt. Col. Oliver North. North had tried to destroy all evidence of the diversion, but his shredder had jammed. When he came back the next day, he found investigators in his office. After they left with the memo, he returned to shred some more.
As all devotees of the Iran-contra affair know, North had been running two secret operations out of the Reagan White House. He had sold arms to the government of Iran as part of a scheme to win the freedom of American hostages in Lebanon; and he had taken this money, along with other funds, and given it to the contras fighting the communist government in Nicaragua. Both operations broke American law, and the diversion of funds raised the specter of an executive branch violating – shredding? — the Constitution.
As details of the two operations surfaced in the press, Meese started an “investigation” of the charges. He was severely criticized for failing to secure North’s office at the outset.
The diversion of funds was considered the worst part of the Iran-contra affair. Republican lawmakers like Senator Warren Rudman of New Hampshire said they would vote to impeach and remove the president from office if it could be proved that he knew specifically of the diversion. No documentary evidence ever surfaced showing that he did. Of course, few documents had survived North’s shredding party.
As the details of the scandal came to light, Reagan’s approval rating went into free fall and Americans’ faith in their government dipped to Watergate-era levels. Skeptics found it difficult to decide which part of Iran-contra scared them the most: the government-within-a-government, the contempt for democracy, or the bald-faced hypocrisy of a tough-talking administration willing to sell arms to the ayatollah and his terrorists. For many Americans, though, the scandal had one clear message: government officials routinely lied and broke the law.
Ezra Klein asks if the Great Depression is relevant:
Romer does seem to be an expert on the Depression. She even wrote the Encyclopedia Brittanica entry on the subject. This is a point you frequently hear in Ben Bernanke’s defense, too: He’s also an expert on the Great Depression. But can this really be so useful? It’s hard to believe that a complex financial crisis in 2008 is so similar to a complex economic crisis in 1929 that you need an incredibly subtle understanding of the latter to effectively apprehend the former. Presumably most economists know enough not to repeat the basic mistakes of the 1930s, and the question is which economists know enough to avoid the possible mistakes of the 2000s. Is there any real reason to assume otherwise?
Granting that I have a vested interest in the position that knowledge of history is relevant, here’s the specific case I’d make on behalf of Romer (and Bernanke) and then the general case.
(1) The Specific Case. The Great Depression remains unique in degree and perhaps in kind. We want to keep it that way. Inasmuch as the present crisis bears some resemblance to the early phases of the Great Depression we want experts of that unique catastrophe to be on the lookout for ways to halt the slide into disaster.
Specifically, Bernanke and Romer have studied how the financial crisis of the late 1920s turned into the broader economic crisis of the early 1930s. It looks like this is where we are now, with the financial crisis beginning to affect consumer spending.
People generally know that this happened, but Bernanke and Romer have specific ideas about why, and are familiar with the historical data supporting those theses. Assuming they have pretty sharp minds they should be able to spot related trends in the current data and formulate or recommend policy accordingly. Which leads to …
(2) The General Case. Ezra’s concluding question seems to boil down to, now that we have the social science, why do we need the social scientists?
Well, to some degree you don’t, of course. The whole point of social science is to draw general conclusions from specific data, and those general conclusions should be able to predict further findings. So Bernanke and Romer sift through the data, and produce a model that explains what happens, and the model should have predictive value no matter who applies it.
But that “incredibly subtle understanding”, which comes from poring over the data, is potentially quite valuable, especially in a complex crisis that may not unfold exactly like those of the past. Someone who’s familiar not only with the model—the “basic mistakes”—but also with the data that went into the model will know all of the caveats and qualifications that don’t make it into the general statement.
And such a person would be the best qualified person to catch exceptions and nuances in current flows of information, so as to say, “wait. We don’t want slavishly to follow the model, here, because….”
For the same reason, I hope the people crafting the president-elect’s infrastructure-investment program have a good empirical understanding of how the New Deal infrastructure-investment programs did and didn’t work. If you want to do more than derive the basic benefit of just paying people to dig holes and fill them again—that is to say, if you want lasting infrastructure as well as short-term stimulus—you need to take into account the weirdnesses of American federalism, the business of contracting and hiring, and the existing state of plans for infrastructure development. It would be good to know the details of how that panned out last time.
I’d already decided on “teledon” as a replacement for “doofus” for this kind of thing, and then lo and behold, I am opening act for a real-live teledon, my erstwhile colleague Niall. Those who like this sort of thing will enjoy listening here as I crack wise based on Keynes’s wit.
Also, jftr, the thing that sticks out to me about Geithner is his Bretton Woods/international economics experience.
Christina Romer, the appointee-designate (or whatever) as director of the president’s Council of Economic Advisors is said to have argued, in her influential article “What Ended the Great Depression?” [JSTOR link], that “expansionary monetary policy was the key to the partial recovery of the 1930s” and therefore, “monetary policy is key.” And indeed Romer does argue this, but contrary to a variety of panicky emails that have shot through my inbox, her argument is not inconsistent with the president-elect’s stated plan for fiscal stimulus. Why?
Romer’s argument goes something like this:
(2) Yet there was significant recovery during the 1930s, both as to economic growth and to job growth.
(3) So we have a mystery: where did the recovery come from? Did it come from the ordinary operations of the economy? No; there was an inflow of money from outside.
(4) Why was there an inflow of money? Not because of the Fed—it wasn’t cooperative. But by stabilizing the banks and devaluing the dollar, Roosevelt’s administration set policy that drew overseas investments into the US.
(5) This money came from overseas at first because of the devaluation, but it came in quantity later because it needed someplace safer to go than a Europe menaced by Hitler. Other countries’ misfortune was America’s good luck. (Which means you can’t necessarily say that there would have been a recovery without the war; the inflow of overseas investment owed partly to the war.)
(6) Romer’s conclusion then is that “the rapid rates of monetary growth were due to policy actions and historical accidents.”
She’s very clear throughout that deliberate policy choices were key, and she thinks the deliberate policy choice of FDR to devalue in 1933/34 was most key.
But there’s nothing particularly prejudicial there against fiscal policy. Nor an argument about the superiority of monetary policy. But an empirical case that owing to planning and luck, monetary policy worked in the 1930s.
And just now we haven’t stabilized the banks quite as the New Deal did in 1933.
On this day in 1963, Jack Ruby shot accused presidential assassin Lee Harvey Oswald on live television, thus providing material for thousands of conspiracy theory books (including mine).
Ruby, the owner of a strip club in Dallas, said he was distraught by the tragedy of the John F. Kennedy assassination, and especially by its effect on Jacqueline Kennedy. He had visited the Dallas police station a couple of times during the 48 hours since Kennedy had been shot, milling around with reporters. On November 24, he wandered into the city jail basement just moments before the police moved Oswald to the county jail. As the prisoner moved past, Ruby lunged forward and shot him in the stomach:
Ruby’s murder of the man who had earlier shouted “I’m a patsy” caused millions to suspect a wider plot. Although the government’s official report on the assassination dampened speculation for a time, by the mid-1970s upwards of 90 percent of Americans believed in a conspiracy. The list of potential villains includes the Soviets, the CIA, the FBI, the secret service, the military-industrial complex, the mafia, Fidel Castro, anti-Castro Cubans, the Masons, the Jews, the Federal Reserve bank, aliens, J. Edgar Hoover, Richard Nixon, and Aristotle Onassis.
Ruby (born Jacob Rubenstein) had his own conspiracy theory: that anti-Semites would falsely accuse him of Kennedy’s murder and use his alleged guilt to justify a new holocaust. He told the Warren Commission that they had already begun their work and were torturing and killing Jews in Dallas. He died of cancer in 1967.
A friend recently asked Eric and me for a list of ten history books that would allow an interested but non-expert reader to “understand America.” Leaving aside all of the obvious caveats, my list, which runs through the era of Reconstruction (sort of), can be found below the fold. I’d love to hear your thoughts on this question.
One more thing, when Eric presented his five choices, he quibbled with some of the particulars on my list. Which made me cry. So, if you want to see his list, you might be able to prevail upon him to share. Even though he’s notoriously very selfish.
[Editor’s note: zunguzungu, long-time commenter and friend of the blog, has stepped up with a guest post today. Thanks for this. We really appreciate it.]
Henry Morton Stanley pretended to have written something in his diary on November 23rd, 1871. Perhaps he did, though the pages in his diary are torn out, so we can’t know for sure. The event he claimed to have recorded — but probably didn’t — also probably didn’t happen, or at least not the way it’s usually “remembered.” He most likely didn’t say “Dr. Livingstone, I presume?” on meeting the older doctor (Tim Jeal says so in his new biography), and he didn’t even meet him in the jungle at all. He met him in a town, as this image from How I Found Livingstone illustrates:
As Claire Pettitt put it in her excellent Dr Livingstone I Presume?: Missionaries, Journalists, Explorers, and Empire, it’s a phrase we remember without really remembering why, and pages torn out of a diary are an apt figure for the ways that forgetting what really happened have been the first step in making the event meaningful. For example, while Welsh-born Stanley would eventually give up the pretense of being from Missouri, he was, at the time, widely recognized as an American figure allowing the event to be contemporaneously interpreted by reference to an Anglo-American partnership that was going through a rough patch. As Pettitt illustrates, news of his discovery literally competed for column space with news of the negotiations in Geneva where the issue of British support for the Confederacy was being officially resolved, and this was symptomatic more broadly: Stanley’s narrative of the American finding a revered English abolitionist (though he was actually Scottish) in the jungles of Africa did a similar kind of work as the diplomats in Geneva in re-cementing a sense of Anglo-American moral identification. Read the rest of this entry »
In the NYT, you’ll see the eminently reasonable and decent Tyler Cowen explain, “The New Deal Didn’t Always Work, Either.” It’s a good thing nobody’s arguing that, then, isn’t it? Here’s a few quick points.
(1) As Tyler points out, and as I say in my book, the New Deal featured some notable errors. Everyone’s favorite to hate is the National Recovery Administration, which (as Tyler puts it) “sought to cartelize industry, backed by force of law.” Even if it had functioned it would probably have ended up increasing both prices and wages, leaving no net improvement in purchasing power; in the event, it didn’t function. It was unpopular with the public and Congress, tasked with investigating itself, discredited and almost discarded by the time the Supreme Court declared it unconstitutional.1
Here’s the point to note: I’ve seen nobody argue, nor does Tyler cite anyone arguing, that, as a historical matter, NRA was the New Deal’s big success, nor that as a lesson of history, we should try NRA again.
(2) As Tyler points out, and as you’ve read here, “New Deal fiscal policy didn’t do much to promote recovery.” Just so: which is what Keynes was explaining, what Krugman argues, and what has been the understanding of the subject since E. Cary Brown’s work back in the 1950s: the lesson of New Deal fiscal policy is that Roosevelt was too conservative about its use.
When Tyler says, “we shouldn’t think that fighting a war is the way to restore economic health”—well, good thing nobody sane thinks that. The point of Michael Cembalest’s graph is not “war good” but “fiscal stimulus good”—you can have fiscal stimulus without war, and indeed fiscal stimulus is much more effective—and also morally defensible, we should note—without killing off your young and productive workers.
Here’s the point to note: I’ve seen nobody argue, nor does Tyler cite anyone arguing, either that we should repeat note-for-note the New Deal’s use of fiscal policy or that we should wage a war because it will allow less restrained fiscal policy. The point is that we should learn the lessons of New Deal fiscal policy and not be as conservative as FDR was in the 1930s.
(3) Tyler says, “The good New Deal policies, like constructing a basic social safety net, made sense on their own terms and would have been desirable in the boom years of the 1920s as well.” Absolutely right. Indeed, we can go further: they would have been desirable in the late nineteenth century, when other countries were enacting such policies, and they would have been desirable in the early twentieth century, when Theodore Roosevelt and Woodrow Wilson saw some early such measures into law over the objections of conservatives. And, as Tyler says, they would have been desirable in the 1920s. Funnily enough, the party in power in the 1920s was the non-TR version of the Republican Party, which had no interest in such policies. Inasmuch as these policies had been desirable for decades and blocked by political opposition, it was eminently sensible for the New Deal Democrats to enact them in the 1930s, because who knew when there would again be a majority in favor of them.
Here’s the point: Tyler thinks such policies are good, universal healthcare is probably one of them; it would be eminently sensible for the Obama Democrats to enact it now, because who knows when there will again be a majority in favor of it.
I’m pleased to join forces with Tyler against the wicked NRA-revivalists when they show up, and against the now actually existing opposition on the right, who would fight against these clear conclusions.
1The standard work on NRA is Hawley, The New Deal and the Problem of Monopoly, which lays out the case I’ve given here; even newer work such as the excellent Meg Jacobs, Pocketbook Politics, which emphasizes some of the useful, non-cartel aspects of NRA, acknowledges these core problems.
shadowcook made me read this.
The academy has more than its fair share of people like Alexander McPherson, the UC-Irvine biologist who refuses! to go through sexual harassment training– training the UC is obligated to provide under state law. Now he’s thinking of retiring rather than complying with university regulations.
Read the rest of this entry »
Huh. As far as initialisms to revive, ERP is a good one—the Marshall Plan was a notable success. President-elect Barack Obama:
The news this week has only reinforced the fact that we are facing an economic crisis of historic proportions. Financial markets faced more turmoil. New home purchases in October were the lowest in half a century. 540,000 more jobless claims were filed last week, the highest in eighteen years. And we now risk falling into a deflationary spiral that could increase our massive debt even further….
There are no quick or easy fixes to this crisis, which has been many years in the making, and it’s likely to get worse before it gets better. But January 20th is our chance to begin anew….
I have already directed my economic team to come up with an Economic Recovery Plan that will mean 2.5 million more jobs by January of 2011 – a plan big enough to meet the challenges we face that I intend to sign soon after taking office. We’ll be working out the details in the weeks ahead, but it will be a two-year, nationwide effort to jumpstart job creation in America and lay the foundation for a strong and growing economy. We’ll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels; fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead….
… what is not negotiable is the need for immediate action. Right now, there are millions of mothers and fathers who are lying awake at night wondering if next week’s paycheck will cover next month’s bills. There are Americans showing up to work in the morning only to have cleared out their desks by the afternoon. Retirees are watching their life savings disappear and students are seeing their college dreams deferred. These Americans need help, and they need it now.
The survival of the American Dream for over two centuries is not only a testament to its enduring power, but to the great effort, sacrifice, and courage of the American people. It has thrived because in our darkest hours, we have risen above the smallness of our divisions to forge a path towards a new and brighter day. We have acted boldly, bravely, and above all, together. That is the chance our new beginning now offers us, and that is the challenge we must rise to in the days to come. It is time to act. As the next President of the United States, I will. Thank you.
You may remember this post. Well, it seems that Mayor Cory Booker is still luxuriating in this nation’s racial deliciousness. By the way, for those of you who watch Colbert regularly, does he break character more and more often these days? And is this a byproduct of the changing political landscape?
Via our BFFs at postbourgie.
Surely there’s some reason* that nobody’s shaking President Bush’s hand, right? Does he have a cold or something? Also, as much as I loathe our dear leader, I’m finding it even harder to stomach the media’s decision to begin reporting on what an ass the man is now that such stories no longer matter.
* Beyond the obvious, I mean.
I think I’ve worked it out. Keynes had a commitment to the idea that:
1. All government actions play by the same rules.
2. “Public works and other investments aided by Government funds or guarantees” help the economy recover according to the Principle of Sufficient Stimulus.
Anti-New Dealers saw that a) the 1938 recession followed a cutback in government spending as described in (2) above, and b) an increase in government spending during the second world war brought the economy out of the depression. The implications of these observations led them to worry that they might be heading into Keynesianism.
Eventually, they came up with the Principle of War Spending, which states that
government spending on the war aided the economy because it was necessary spending.
Another way to phrase this would be to say that the reason war spending helped the economy is because.
The Principle of War Spending and the Principle of Sufficient Stimulus are both independent fundamental principles. Therefore, neither principle can follow from the other – one cannot say, for instance, that war spending is a form of stimulus and then conclude that war spending helped the economy recover by the Principle of Sufficient Stimulus (rather than by brute necessity) – and neither can contradict the other.
But because it was war spending, not stimulus spending that ultimately got the country out of the depression, the existence of the PWS forces a reconsideration of the PSS: maybe no stimulus spending would have been sufficient. Furthermore, this also implies that not all government actions play by the same rules.
O brave new blog, that has such people in it.
Maybe Keynes’s letter, with my interjections, proved too much for you: Michael Cembalest, Chief Investment Officer of J.P. Morgan, sends out this chart, which shows much the same information in graphic form.
It’s all there in the graph’s title, really. Thanks to Michael for permission to post.