Liberalism: Do You Agree We've Had Enough of It? Message Board

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Politics : Liberalism: Do You Agree We've Had Enough of It?

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To: chartseer who wrote (98778)	1/21/2011 8:02:10 PM
From: TimF	of 224786

No I'm not forgetting anything. When those millions start working they get paid, they buy things with that pay creating demand. But the money for the pay has to be taken out of the economy in the first place reducing demand elsewhere. If that wasn't enough of a reduction in demand rationing also reduced demand. WWII wasn't real recovery in any way except for unemployment (with millions being sent over to fight you where going to have lower unemployment). The real recovery was after WWII. Consumer demand had been suppressed by the war (no new cars, the old cars going without replacement parts that you mentioned etc., all the goods people wanted more of but where rationed etc., people had built up savings (war bonds etc.), so they could spend. The worst of FDR's economic policies where gone. The rationing was gone. The consumer economy that had been messed up in the 30s, and suppressed in the first half of the 40s came to life. The downside was the time and cost to shift from producing to meat military demand to producing to meet civilian demand. This (like after WWI) caused a recession, but it wasn't as bad as the economic statistics make it look. A lot of the officially recorded 12.7% drop in GDP was just wringing out the distortions of war policies from the statistics. Unemployment was never high during this recession, considering both of those points I'd say it was a very mild one (and it was over in the fall of '45, so it was a short one as well), even though the officially recorded drop in GDP (or probably GNP was used then) was over three times as large as our last recession. I know because I was there and not only saw it but lived it for myself. That tells you what happened to you and those around you. If your very observent and dig in to what's happening in other places, it also might give you a leg up on what's happening in the broader economy, but it doesn't really tell you why things are happening in the broader economy. Late 45 to the next recession (53) probably wouldn't have been the boom time it was without the war preceding it. Without the war you wouldn't have had the suppression of the civilian economy, so you wouldn't have had the bounce back either. But more growth in the late 40s doesn't mean a higher standard of living in the late 40s, if the extra growth later on was the result the civilian economy being held back in the early to early-mid 40s.

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