Posts Tagged ‘great depression’

On today’s show we are talking to John Tamny.  John is editor of RealClearMarkets, Political Economy editor at Forbes, and a senior economic adviser to Toreador Research and Trading (www.trtadvisors.com). He is author of the new book Popular Economics: What the Rolling Stones, Downton Abbey, and LeBron James Can Teach You About Economics (Regnery).

Recently Robert Wenzel of http://www.economicpolicyjournal.com spoke with Jack to give the listeners the basics of Austrian Economics.

http://www.economicpolicyjournal.com

http://www.amazon.com/The-Fed-Flunks-Federal-Reserve/dp/1312047232

Please check out this episode where we discuss FDR, The New Deal, The Great Depression… and Calvin Coolidge:

 

If you pay attention to financial media even the slightest bit, you have no doubt heard the talking heads freak out over the prospect of deflation. Bloomberg, CNBC, Fox Business, Wall Street Journal, you name it… they all mindlessly repeat the bloviations of Bernanke, Yellen, Krugman, etc. that what we need is for people to spend (not save), to borrow, and for prices to rise. All of this is wrong.

To give you a real basic econ lesson, this attitude is largely inspired by the economist John Maynard Keynes. Bernanke and company are devout Keynesians. They believe an economy is built on consumption and is stimulated by spending. Paul Krugman is outspoken in his conviction that the US does not carry enough debt. That $18 trillion is not nearly enough. He believes we need to spend much, much more and that increasing the debt does not matter in the least. I sh%t you not. These are the people running our economy. Bernanke, Yellen, Jack Lew, the financial media, republicans and democrats alike all believe we must spend our way out of this funk we’re in. And as Shaq once said, “Don’t fake the funk on a nasty dunk.” That literally means nothing, sorry.

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We must consider the source when we consider the things we were taught growing up in public (government) schools. In a hypothetical true free society where government did not monopolize the school system, we would be much more likely to learn a fair and accurate presentation of facts. This is true of any subject but is most applicable when we’re talking about history. History is largely in the eye of the beholder. There are facts and dates that cannot be debated. But history is more about the why than the when. This is where the perspective of the presenter comes into play. Take 9/11 for example. Depending on who taught the subject, one may get very different explanations as to the cause. A pro-government leaning teacher may say we were attacked because the terrorists hated our freedom and our wealth. They attacked us out of jealousy basically. Another, more impartial teacher may say we were attacked as retaliation for our incessant meddling in the Middle East. Same event, same dates, same number of dead, but very different explanations of the most important lesson: the cause.

The standard account of the Great Depression we got (and still get) growing up illustrates just one of many inaccurate portrayals of historical events regurgitated in government schools. The popular, public school account goes something like this: the unfettered capitalistic, animalistic excesses of the 1920’s resulted in a horrific crash in 1929 that led to the Great Depression. And the do-nothing Herbert Hoover allowed the Depression to continue and worsen while the masses were starving. Roosevelt, with all of his grand programs, put Americans back to work and eventually pulled us out of the Depression. (more…)

More genius from David Stockman:

Stockman Article