Joe Thinks Obama’s an Appeaser, and FDR Caused The Great Depression

April 18th, 2009

Sigh.

I stepped into a pissing match over on my friend Mike’s Facebook page, and since I don’t feel right continuing to piss on his wall, I’ve moved it over here.

It all started with Mike posting this photo with the fairly innocuous and flippant comment, “This doesn’t look like a man shake to me.”

Joe Guerriero (who I don’t know) replied:

First a bow than a shake…with the wrong people me thinks…sorry Mike…the Chavez is a fascist thug!”

My comment (I couldn’t resist):

A bow and a warm handshake don’t cost anything (except politically among the macho natives here, and they don’t vote for him anyway). But the recipients–driven as they are by ego rather than reasoned calculation–actually think they’ve gotten something. Here’s to reasoned calculation, ego-free, rolling right over egotistical assholes.

Joe came back:

Don’t know you Steve but no need for name-calling but I guess it’s typical Obama-zombie behavior whenever someone disagrees with their what appears to be an increasingly socialist-leaning naïve agenda. Stop drinking the kool-aid and pick up a history book. Learn that appeasement has NEVER worked! Learn that most economists now agree that FDR lengthened the depression by a good 6 years due to his new deal tax and spend policies. Both are facts. My concern is that those who ignore history are in fact doomed to repeat it…peace…

So taking this up real-time…

no need for name-calling

Did you think I was talking about you? By “egotistical assholes” I was referring to Abdullah and Chavez. The earlier epithet, you’ll have to decide for yourself.

pick up a history book

That is excellent advice!

In the last twelve months I’ve read Shirer’s Rise and Fall of the Third Reich; Milton Friedman and Anna Schwartz’s A Monetary History of the United States, 1867-1960; Friedman’s Capitalism and Freedom; Krugman’s Depression Economics; Zakariah’s The Future of Freedom; Kennedy’s The Rise and Fall of the Great Powers; Halberstam’s The Best and the Brightest; Kenworthy’s In Search of National Economic Success, Adam Smith’s Wealth of Nations, Churchill’s six-volume history of WWII–that’s all I can remember off the top of my head–plus at least a couple of dozen research papers on economics and economic history. (Plus magazines, newspapers, and regularly following all the major econobloggers). Is that what you had in mind?

How about you? Hannity and Colmes?

Do you think Sarah’s read any of those? Do you think she should take your advice?

Go read Machiavelli and Sun-Tzu. The Very Last Thing you’ll see them recommending is swagger and big talk. The previous administration was the least Machiavellian–the crudest and clumsiest–we’ve seen in living memory.

By “appeasement” I assume you’re (rather predictably) referring to Chamberlain. Now understand: Hitler utterly gamed Chamberlain, right up the… But it wasn’t because Chamberlain talked to Hitler. It was because Chamberlain let Hitler game him. Obama’s made of decidedly sterner stuff.

Just in case you or other readers don’t in fact know what Chamberlain actually did at Munich, a link for you.

Do you see yourself therein?

There is actually no better forum for gaming your adversaries than in direct negotiations, while making all nicey nice. Look what Hitler did to Stalin. (Ouch!)

It’s damned useful, of course, even necessary, to have a big stick in hand that isn’t otherwise in use elsewhere. (Hitler blew it in just that way, diverting his troops in May/June ’41 with distractions over the coup in Yugoslavia and invading Greece instead of getting on with the Russian invasion.) In another few years, hopefully, we’ll have that unencumbered stick again.

On the notion that FDR extended The Great Depression, it’s really nothing short of loony. Read Friedman and Schwartz–the preeminent founders, poster-children, and evangelists for Chicago-school free-market capitalism. They’re unequivocal: if it weren’t for the Hoover administration’s churlishly stupid tight monetary and fiscal policies pre-’33, it would have been a recession not a depression, and it would have been over by ’33.

Every economist of every political persuasion–libs and cons, pubs and dems– agrees with Friedman on this.

Things turned up fast following FDR’s expansionary monetary/fiscal loosening in ’33–i.e.. employment down from 25% to 15% in two years, industrial production skyrocketing. But then he got deficit concerned and tightened in ’37 (combined with just plain misplaced concerns and policies at the treasury/Fed re: gold and bank reserves), and it surged back in ’38. Eventually loose money and the war put an end to it all, and the Great Prosperity began.

If you’re interested in learning more, you’ll find plenty of posts in the right sidebar that will give you the “facts on the ground.” Start with Banks: Who Needs ‘Em. It gives the numbers and graphs, and you’ll probably actually like what I have to say there.

  1. Joe Guerriero
    April 18th, 2009 at 15:48 | #1

    Steve,

    I was mobile. Best off Mike’s wall. One – apology. I thought you were calling me an “a-hole”. I’m glad you’re so well-read and applaud you on your selections. Haven’t read all but have read a few. Klugman, Halberstam and Smith – all great! I am particularly a huge fan of the Art of War. I’ve read it 10 times (no kidding…great lessons for all leaders).

    I don’t really care about Hannity, Colmes or Sarah. I understand gaming your adversaries in direct negotiations. Anyone who has ever been in a negotiation understands that there is always a good possibility of leaving something on the table or getting outright duped. In business, one expects they will not get everything they want. It’s a bit of a give and take. That’s okay. It’s called win-win. Maybe it should be called lose-lose. When dealing with tyrannts and thugs the only outcome is to have them stop being tyrannts and thugs. This is where lack of engagement is a very sound strategy. Liars and killers will lie and kill. It’s that simple. I am not convinced that this President is “made of sterner stuff”. Nothing he has done to date – like standing up to his own (and the other) party regarding “pork-time” in the recently passed budget – demonstrates “sterner stuff”. I seem to remember him saying something about going “line by line” when on the campaign trail.

    I don’t pay too much attention to Hannity, Colmes, etc., my feelings are the same regarding Chris Matthews. Seeing him bully an unprepared guest doesn’t turn me on. When Chamberlain, Hitler, Mussolini and Daladier signed the Munich Agreement transferring the Sudetenland to Germany, Benes protested the decision. Chamberlain told Benes that Britain was unwilling to go to war over the Sudetenland. People in Great Britain – influenced by a strong labor party and weary from WW1 – were relieved that they were being spared war but it’s a well-know fact that Churchill thought the British government lost the support of the Czech army which proved disastrous when Germany broke the Munich agreement in 1939 by taking over the rest of Czechoslovokia. It was only than that Chamberlain realized his mistake. Gamed? More like a corrupt and evil despot(Hitler) toying with a naive individual (Chamberlain) afraid of confrontation for political reasons. Not great leadership on Chamberlain’s part. Now don’t get me wrong, going to war doesn’t make one a great leader, but sometimes it is the only way to cut a cancer out (see US leads defeat of Germany and Japan in WW 2). Chamberlain appeased Hitler out of fear and we had to bail Britain out…with some help of course. I’m sure (I hope) Chris Matthews know this. He lucked into an unprepared guest.

    Regarding FDR, the New Deal and the Great Depression I’m not an economist so I can’t do the justice the following WSJ link can -http://online.wsj.com/article/SB123353276749137485.html

    Peace…

  2. April 19th, 2009 at 07:13 | #2

    Joe:

    >When dealing with tyrannts and thugs the only outcome is to have them stop being tyrannts and thugs. This is where lack of engagement is a very sound strategy. Liars and killers will lie and kill. It’s that simple.

    You’re saying, I think, that you (if you’re not a thug) can never win in a negotiation with tyrants and thugs. I just don’t know that that’s true. Sort of a faith-based belief, isn’t it? One counterexample comes immediately to mind: Quadaffi. (And no, invading Iraq is not what brought that about.) (Hitler/Stalin is not actually a good example on my side–though Hitler utterly poned Stalin–because that’s one thug gaming another.)

    >taking over the rest of Czechoslovokia. It was only than that Chamberlain realized his mistake.

    He didn’t *really* get it until Poland.

    >Gamed? More like a corrupt and evil despot(Hitler) toying with a naive individual (Chamberlain) afraid of confrontation for political reasons.

    Absolutely, naive. Political? Not purely. Like many of his fellow English, he remembered very clearly the horrible, horrible pointless war from only twenty years past.

    >going to war doesn’t make one a great leader, but sometimes it is the only way to cut a cancer out (see US leads defeat of Germany and Japan in WW 2).

    Obvious. Truly imminent, truly existential threats.

    >Regarding FDR, the New Deal and the Great Depression I’m not an economist so I can’t do the justice the following WSJ link can -http://online.wsj.com/article/SB123353276749137485.html

    I find this article to be disingenuous.

    They acknowledge right up front that “Some New Deal policies certainly benefited the economy,” reeling off all the truly landmark New Deal initiatives: “establishing a basic social safety net through Social Security and unemployment benefits, and by stabilizing the financial system through deposit insurance and the Securities Exchange Commission.”

    “Some.” Like, all the profound, defining initiatives that provided the foundation for the post-WWII Great Prosperity.

    Then they go after one thing–NIRA–which most economists agree was antiexpansionary and ill-conceived (and unconstitutional).

    They don’t even mention two other *huge* areas–public works (positive) and protectionism (negative). And they only mention the Really Big Sticks–monetary and fiscal policy–in passing.

    They act like NIRA was the sum total of FDR’s policy and The New Deal, dwarfing all the other pieces, and so blame “The New Deal” for what they themselves say was caused by one (in the big picture relatively small) aspect of that Deal.

    See what I mean about disingenuous?

  3. April 19th, 2009 at 07:32 | #3

    @Joe Guerriero
    On the substance of Cole and Ohanian’s assertions re: NIRA, whether you believe them depends on whether you accept their model and its underlying assumptions. And that gets bloody technical–well beyond my ken. The always-amazing Menzie Chin:

    “So, a lot hinges upon one’s feelings regarding the stickiness of prices. As a person who taught graduate students the Mankiw menu cost model from Mankiw and Romer’s, New Keynesian Economics (MIT Press, 1991), I’m on the side of nominal rigidities, and hence the model that re-establishes the conventional wisdom regarding the New Deal policies. But, if you feel that prices are fully flexible (i.e., somehow you’ve missed the fact that the prices at your local restaurant are not moving around day by day), then you should side with Cole and Ohanian’s perspective.”

    http://www.econbrowser.com/archives/2008/10/back_to_the_gre.html

    Phew!

  4. joe guerriero
    April 19th, 2009 at 19:04 | #4

    Steve,

    A bit of ouzo but here you go…

    I believe that killers and thugs are killers and thugs. Just comes from my perspective on the world and human behavior. If the show of US force didn’t get MQ to back down, what did? Self-survivial. Economic pressure and the threat of military. MQ is still complaining and negotiating for more foreign investment. The reality is that nobody really knows for sure why he renounced his nuclear program but I believe it was a combination of efforts mostly the “big stick”.

    Chamberlain – Czechoslovakia or Poland…doesn’t matter. The man appeased Hitler because of political reasons as well as the fact Britains were war weary. I agree. The parallels to our present situation are actually kind of eerie. Question – who is strong enough and powerful enough to bail us should we need it the way we bailed Great Britain out?

    Existential threats – does flying jets into the World Trade Center, the Pentagon etc., qualify as an existential threat? Does killing 3,000 plus innocent Americans count as an existential threat. Al Quaeda was operating terrorist training camps throughout Iraq. It was common knowledge. I just reviewed a video montage on the BBC last night where all the liberal democratic “lions” – Clinton, Kennedy, Biden, etc. – were saying Iraq had weapons of mass destruction and were aiding and abetting terroists and that we needed to deal with Hussein. The vids were from 1998-99 – before Bush was elected. What changed? Bush. The dems and the media were out for his head because they thought he stole the 2000 election. Also, why now has Obama pushed back the timetable for troop withdrawal in Iraq? Why does he now say we’ll need to leave 30-50,000 troops in Iraq for the forseeable future? McCain (horrible choice; worse campaign) was killed for making the same comment about troops staying much like they have in Japan and elsewhere…what are now considered plum assignments. Obama killed him. The press killed him. He was just stating the truth. Saw some dem strategist the other night on PBS. She said now that Obama’s in office he has access to info he didn’t have before. Talk about disingenuous! Didn’t the Obama campaign and the media ever consider that Bush had info others didn’t have. The dem strategist was about as weak as the guy Matthews interviewed!

    Regarding the New Deal and FDR. Never said that some good wasn’t accomplished. My point was that many economists now believe that some of his policies did in fact lengthen the depression. Of course, if you’re a supporter of big government, you’ll believe the New Deal was great. If not, you won’t. It’s that simple actually. Everyone can “spin” their position. Look at Medicare and Medicaid (thx LBJ). The actuaries totally blew the projections for these programs. To think the government can accurately project 30-40 years out is naive. These programs along with Social Security and unemployment continually teeter on insolvency. Look at what the CBO just said about the miss on Obama’s recently submitted budget. These guy have zero idea what they’re doing -both sides! I just believe what our framers believed – federal government’s role in our lives should be limited. We got into the trouble we’re now in as a nation because we leveraged ourselves (individually and collectively) to the hilt; we allowed people that couldn’t afford to buy homes to buy them; we created paper that made this momentarily less painful, falsely profitable and now disastrous – how does the federal government justify throwing us into greater debt as a nation as a better way to go? These folks spend too much, tax too much and don’t understand that business creates REAL jobs…not the Fed.

  5. April 20th, 2009 at 10:27 | #5

    joe guerriero :

    If the show of US force didn’t get MQ to back down, what did?

    Self-interest. Yes: “Economic pressure and the threat of military.”

    Yes: “negotiating for more foreign investment.”

    All implemented via years of patient diplomacy starting way before Bush.

    In any case, talking to him worked. QED.

    Existential threats – does flying jets into the World Trade Center, the Pentagon etc., qualify as an existential threat? Does killing 3,000 plus innocent Americans count as an existential threat.

    Compared to the imminent invasion of Britain and a plausible invasion threat of the U.S. homeland? No. Those incidents merit strenuous action. Invading Iraq, which had nothing to do with those incidents? Uh uh. That was done for political reasons that make Chamberlain look downright Churchillian by comparison.

    Al Quaeda was operating terrorist training camps throughout Iraq.

    Oh pulleeze. As Reagan/Reaganomics champion Bruce Bartlett said recently while ridiculing the tax tea parties, “People should remember that while they have the right to their opinion, they are not entitled to be taken seriously. That only comes from having credibility gained by the correct presentation of facts.”

    Read the people who actually know, and aren’t trying to prove something they want to believe, and you’ll see that your belief on this topic just isn’t true. If you want to know the truth, “the facts on the ground” are there to be picked up.

    Clinton, Kennedy, Biden, etc. – were saying Iraq had weapons of mass destruction and were aiding and abetting terroists and that we needed to deal with Hussein.

    All true. But they didn’t invade. Why? As Cheney said, it would be a “quagmire.” Reasoned judgment, not overwhelmed by ego, emotion, and political expediency (qua Chamberlain). (I didn’t feel the need for CIA analysis at the time to conclude that we’d end up with an Islamic fundamentalist regime in place of Hussein. Sure enough…)

    why now has Obama pushed back the timetable for troop withdrawal in Iraq?

    Pragmatism. Were you among those who was rabidly attacking as traitors anyone who even mentioned a timetable?

    McCain (horrible choice; worse campaign)

    Indeed. But–putting aside his wacky choice of Palin–compared to Palin he looks like a serious and judicious statesman. The whole Republican party is a cartoon (viz: McCain’s SNL QVC skit). People who have reasoned and judicious policy opinions make those opinions look ridiculous by parroting that party’s cartoonish, ridiculous talking points. A good alternative: read Bartlett for reality.

    Talk about disingenuous! Didn’t the Obama campaign…

    You can find a million points supporting this, some with some significant validity. But they don’t affect Ohanian’s disingenuousness. Red herring. Stay on topic.

    Many economists now believe that some of his policies did in fact lengthen the depression.

    Some of FDR’s policies (i.e. NIRA) were poorly conceived and executed. Alert the media. Major breaking news story.

    Ergo, “The New Deal Extended the Great Depression by Six Years.”

    Really, you get what I’m sayin’ here?

    Of course, if you’re a supporter of big government, you’ll believe the New Deal was great.

    I won’t go through it all here, but if you want strong arguments that somewhat larger government with more social programs and redistribution makes prosperous countries better off (both the rich and the poor), check out some of the posts in the sidebar. The evidence is pretty irrefutable. If you don’t want to hear it, fine.

    Everyone can “spin” their position.

    Yikes, you sound like those relativist poststructuralist academic weenies that conservatives (and I) love to vilify. See Bartlett quote on opinions, above.

    Thanks,

    Steve

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