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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (211039)	6/15/2011 10:31:56 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 361069

What happened in '37-38? FDR's one Obama moment, when he tried to balance the budget in the middle of a Depression. Pawlenty’s 5 Percent Growth Solution Makes Historical Sense By Daniel Gross Daniel Gross is economics editor at Yahoo! Finance. Tuesday June 14, 2011, 4:16 pm EDT finance.yahoo.com Former Minnesota Governor Tim Pawlenty, now a candidate for the Republican presidential nomination, has been getting a lot of grief for his promise that the U.S. economy could grow five percent per year for 10 years if only we follow his program of big tax cuts, spending reductions and deregulation. The claim has raised eyebrows across the spectrum. After all, $15 trillion economies simply don't grow that rapidly over such long periods of time. Pawlenty argues that "we've done it before" and "the same can happen again."Between 1983 and 1987, he pointed out, the economy grew at an average rate of 4.9 percent, and between 1996 and 1999, the economy grew at an average rate of 4.7 percent. Sticklers will point out that growth in those impressive periods was less than five percent, and that these two golden periods combined didn't last 10 years. Pawlenty's response has been to accuse the doubters of not believing in America. "And this idea that we can't have 5 percent growth in America is hogwash," as he put it in last night's debate. "It's a defeatist attitude. If China can have 5 percent growth and Brazil can have 5 percent growth, then the United States of America can have 5 percent growth." (Sticklers will point out that poor countries such as China and Brazil can grow by 5 percent with relative ease because they're poor.) But here's the thing. The U.S. has shown an ability to grow at more than five percent a year for several years in a row. And it did so at a time when many people doubted the capacity of the U.S. to reinvent itself and recover its economic footing. It's surprising that Pawlenty doesn't talk more about that period. The Commerce Department has GDP numbers that go back to 1930. Click here and then select "Annual" in the options section. The data show that between 1930 and 1933, the U.S. endured four straight years of horrific contraction. The economy shrank by more than a quarter. But then look what happened. The panic stopped and growth resumed at an impressive pace. As follows: 1934: 10.9 percent 1935: 8.9 percent 1936: 13.0 percent 1937: 5.1 percent By 1936, the U.S. economy had regained the ground it lost during the devastating 1929-33 period. In 1937, the economy slipped into a sharp recession and shrank 3.4 percent. But it returned to growth, and the economy enjoyed several more years of extremely rapid growth. 1939: 8.1 percent 1940: 8.8 percent 1941: 17.1 percent 1942: 18.5 percent 1943: 16.4 percent 1944: 8.1 percent By 1944, the U.S. economy was twice as large as it was in 1930 and almost three times the size it was in 1933. The decade between 1934 and 1944 marked a truly remarkable period of growth. Of course, a big chunk of the above-trend growth can be ascribed to World War II, which supercharged America's productive capacity. But the U.S. didn't enter the war until the end of 1941, and the gains before Pearl Harbor were quite impressive. So, yes, the U.S. economy has indeed shown an ability to grow at an average of five percent over a 10-year period. The problem for Pawlenty, and for many other modern-day politicos who believe they know the secret to rapid growth, is that all this growth came under Franklin Delano Roosevelt. In the 1930s, as Roosevelt and his allies saved American-style capitalism from its own gaudy excesses and pathetic failings, Republican opponents, business interests and trade groups stomped their feet. They accused FDR of being a Socialist, of burdening the economy with regulations, of scaring investors by fomenting uncertainty, of hampering investment by instituting a new safety net, of placing restrictions on a bankrupt Wall Street and banking system. These crazy Keynesian schemes would never work. Why, they would turn the U.S. into a weak clone of the U.S.S.R., unable to compete in global markets, lead, or stand up to external enemies. (Plus ca change. . .) Of course, the exact opposite happened. In the 1930s and 1940s, the U.S. economy (and its stock market) got back on its feet, rediscovered its capacity to grow, expanded and then led the world to victory over Fascism. Alas, nearly 80 years later, it remains an article of faith among most modern-day Republicans that the New Deal was a colossal economic failure, that the story of the period from 1933 to 1948 was one of economic malaise, and that the Great Depression didn't end until the U.S. entered World War II. So even as Pawlenty proclaims that he can offer America a "better deal," he's unable to acknowledge the precedent of the New Deal. That's too bad. Pawlenty is right. People have underestimated the capacity of the U.S. to grow in the past, and they are likely to do so in the future. Don't let anybody tell you that it's impossible for the U.S. economy to grow at a five percent rate for a sustained period of time. All you need is an FDR. Subscribe to Daniel Gross's RSS feed here. Follow him on Twitter: @grossdm. Email him at grossdaniel11@yahoo You can find his columns here. His most recent book is Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation.

To: Wharf Rat who wrote (211039)	6/15/2011 1:55:09 PM
From: koan	Read Replies (2) \| Respond to of 361069

My son in law who is usually "Cool Hand Luke" emailed me he got tenure today and attached the letter. The only other time he went out of character was after an inspiring lecture he attended by Roger Penrose and he phoned me on his cell phone from Oregon in the middle of the night-lol. He is usually very reserved. It is sort of amazing, but I remember years ago when everyone was so worried about the ozone hole and he said he thought the hole would close. And sure enough it is. RE GW he says 99% of the big scientists believe in it.

To: Wharf Rat who wrote (211039)	6/16/2011 9:43:02 AM
From: Bread Upon The Water	1 Recommendation Respond to of 361069

One can take Obama to task for the facts as they exist today if, one correspondingly, offers his own solutions to these same facts. BUT, one cannot, legitimately, contrast the situation of today to that of bygone era when everything was different. The attitudes, culture, technology, global dynamics, political margins--all diffferent. If one could time travel back to the middle ages and offer answers that included todays approaches to the problem(s) of that time chances of being killed are good because of the perception of some otherness. The answer has to work in the totality of the context and you are taking the answer you propose out of the context in which it worked. Granted that is far fetched, but the extreme dramatizes the point more efficiently. So I do not accept the political model (FDR) you propose nor the growth rates for the late 30's and early 40's (the Pawlenty article) as a valid approach. Nice to have some history in these discussions though.