BioTube wrote:Money is nothing - the massive amount of resources squandered on blowing Europe back to the stone age are what's actually important. No matter how much money you have, you can't make anything without the needed raw materials.
Seemingly, you can. I don't see why would we should entirely forgo plausibility and some confirmation in lieu of contradictory evidence, either.
Wikipedia mentions a second panic in 1819, with the "panic" of 1815 being described more akin to stagnation.
Stagnation can be equivalent to loss when the population is growing, but I don't know if that was the case then. Discounting a 5 year long depression (later in that century) that was rather deep is arbitrary, though.
There were no recessions before FDR - "recession" was nothing more than whitewashing a depression to avoid the connotations of another Great Depression.
Regardless of whether or not something is called a recession of a depression, they were still longer and more frequent before monetary policy (or FDR). We have longer cycles of boom, and shorter busts. That said, improperly regulated monetary policy is
dangerous. I can't find a list of different recessions and their depth. I found one that compared 5 recessions including the 1920 recession, though. It was deeper, but by only about 7% or 8% than the ones that came before it (which were 30% or so, if I recall). I'm going to look through my history to find this again. I do not know for sure about depth of latter century recessions, though that would be important.
Clearly, the current recession is
bad monetary policy. Good monetary policy does exist though, and it includes the stimulus and bailouts that prevented this from being the second Great Depression. The question is whether the inherent fallacies of government that lead to imperfect monetary policy means monetary policy at all is beneficial or not.
Except most depressions don't compare to the one we're in - the current state response most closely matches the Great Depression, which doesn't bode well.
If state response is actually harmful, which was the issue of contention in the first place.
[quote[1921's depression was also over almost as soon as it began(with Hoover's interventionism notably restrained); without specifics, I can't comment on the other depressions you're talking about.[/quote]
Hoover intervened in both cases. His attempts to fix the Great Depression failed, though.
Tell that to Krugman.
I wish I could tell that to Krugman. He has an ego like Texas though, so I doubt he would listen anyway.
My point was that the deflationary spiral would predict that continually falling prices would cause buyers to postpone purchases, causing prices to fall more, etc in complete and utter defiance of how human beings actually think.
Ok, that is probably true. I agree that economists who focus on "rational" humans are wrong. It's clearly wrong even from lay understanding, but beyond that the brain and behavioral research refutes it as well. I also see how the idea of the deflationary spiral is not in conjunction with that.