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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Joan Osland Graffius who wrote (99264)	6/19/2003 5:41:11 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 132070

Joan, There was no doubt in his mind that the Iraq war was an attempt to try the world war II trick of getting the nation out of economic trouble. He felt Iraq was attractive because it could kill both the oil price problem and get the effect WWII gave the economy. It is a popular myth that it was WWII that was responsible for the recovery from the Depression. The death of FDR and the resulting end of much of his domestic economic policy was far more important. Regards, Don mises.org "Another myth that has held steady about the 20th century is that war--and its evils of taxation, inflation, slavery, destruction, and mass murder--cured the Great Depression in economic activity of the 1930s, not only in America, but in Europe as well. This warped view concedes the legitimacy of the New Deal's interventions to artificially raise prices and wages by restricting supply, which is the sole reason why the effects of the crash of 1929 lasted for over a decade and became known as the Great Depression. However, many Keynesian-trained mainstream economists and intellectuals believe that war is good for many things. In fact, it appears as a magic elixir that solves so many political problems: voter and patriotic apathy; the alleged threat posed to civilization from low taxes, high savings, and decreased state spending; and the dangers unleashed should the public lose the desire to carry the military-industrial complex on their backs. Commentators from Robert Bartley, the Wall Street Journal editorial page, and Larry Kudlow (who wrote, "The shock therapy of decisive war will elevate the stock market by a couple-thousand points"), to Paul Krugman and John Kenneth Galbraith, are only a few examples among legions who believe war has economic benefits to society. This can be traced to the miseducation they received from mainstream economics training. These mainstream commentators on the ups and downs of the economy interpret these events through their training that the business cycle is a natural unavoidable phenomenon of the free-market system of savings, investment, production, and consumption. In response to consumer failure to maintain sustainable levels of spending, which they cite as the cause of recessions and the Great Depression, their prescriptions to prevent another Great Depression require welfare- or warfare-state spending, preferably both. Unfortunately, this is the mainstream view of the history of the 20th century, taught by professors and repeated by columnists and pundits far and wide, and the unfortunate effect of this interpretation of history is that the same mistakes are repeated again and again...." "...Whether or not war as economic tonic is the motive, the excuses for this conclusion are wrong. The mainstream view is that the Great Depression was caused by a decade-long collapse in consumer spending, and the lesson drawn from this ever since is that if consumers aren't willing to spend for some unknown reason, the state must tax, borrow, spend, and inflate in order to spend on their behalf. That opinion is based on the wrong interpretation that the welfare-warfare-state planning of Roosevelt's New Deal "saved" capitalism from itself, and the Second World War, with its systems of controls, rationing, and superpatriotism, ended the Depression. The actual solution to the Great Depression would've been, not foreign intervention and world war, but rather, the ending of the New Deal's domestic "war" on the economy...."