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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (9021)	9/13/2001 8:08:49 PM
From: JMD	Read Replies (1) \| Respond to of 74559

Howdy Cobalt, re: "Good point about the indexes, but the economy really did turn around in 1933." Not to put to sharp a point on it, but NO, NO, AND NO. Most econometricians [an absurd name for economists who are particularly gung ho on quantitative/mathematical tools to advance the dismal science] argue that the bottom was not seen until 1937. They (sadly, I was once one of 'them')have some pretty compelling evidence on their side: national output and employment were both lower in '37 than in '33, for example. I'm not a stock market historian, but you may be referring to the DJ not reaching its nadir until '33, some 3 1/2 years following the Crash. Well as we all know, there is a disconnect between Wall Street and Main Street, and though the market may have stabilized after reaching bottom in 1933, the economy most certainly did not. I don't want to bore you or this board, but by every statistical measure you could shake a stick at, the economy was one sick puppy right through 1939. In fact, economic historians of the Marxist camp (or just the guys who hated Roosevelt) constructed some pretty fancy theories that FDR got us into WW2 because he realized that there was no other way to pull the economy out of a decade long recession except via the stimulus provided by defense spending. I am sure you know that the US had decoded the Japanese intention to attack Pearl Harbor well in advance, and yet somehow failed to get the information into the hands of the folks who most needed it. FDR sat on the vital message, says this school, to help his buddy Winston (by dragging the US into the war) and to help the US (to cover the failure of all his jump start programs--WPA, NRA, etc. etc.). I personally find this theory absurd in the extreme, but it cannot be denied that the economy (Main Street)was in worse shape at the end of the decade than it was at the beginning. FDR's fireside chats were great tonic for a nation much in need of emotional solace, and his economic stimulus programs were novel and bravura efforts to stem the tide. Majority economic opinion would probably hold, however, that although they kept the elevator from crashing right through the basement floor, they were almost completely ineffective in getting the economy turned around and moving in a positive direction. Like all juicy economic history arguments, the final answer can never be known insofar as WW2 "intervened" and completely obliterated the evidence trail. On the record, though, it is very hard to disagree with the notion that the Great Depression was only ended by the Great War-Chapter 2. But in no event were we near the bottom in 1933: the descent into economic hell had barely begun. regards, mike doyle