Rich, (01)
Thanks for the reference. I do have a very high regard for the
work of Milton Friedman in analyzing actual data. Note also that
the worst failures of the Federal Reserve were during the years
from 1929 to 1932 when HH was in power. Although the Fed is
independent of the executive branch, they are under the control
of Congress, which was dominated by Republicans in those days. (02)
And I am also very much in favor of free competition and letting
free markets determine prices. But the critical word is 'free'.
The worst enemy of free markets is monopoly. Government monopolies
are bad, but commercial monopolies are just as bad or worse. (03)
Please note that the Sherman Antitrust Law was promoted by a
Republican senator, signed by a Republican president, and most
vigorously enforced by Republican presidents Teddy Roosevelt
and William Howard Taft. Those were the days before monopolies
learned the most effective methods for buying politicians. (04)
Note how rapidly the price of telephone service fell after the breakup
of ATT and how rapidly new technology spread. ATT had developed fiber
optics, but they were very slow to deploy it because they didn't want
to disrupt their investment in copper wire. (05)
I worked at IBM during its monopoly days, and I saw very clearly how
IBM invented a lot of technology that was never deployed because it
would compete with their installed base. Just one example: Ted Codd
at IBM pioneered relational databases, IBM implemented a very good
relational DBMS that was widely used in research, but IMS was a
"cash cow", and the IMS managers vetoed every attempt to sell the
relational technology. So a tiny company called Oracle did, and
they are still the leader in RDBMS. (06)
Your buddy Ron Paul completely ignores these issues. (07)
> Roosevelt kept the depression going from 1932 until 1941 when it was
> ended by massive spending (08)
I certainly agree that FDR did not spend enough. There were several
reasons: the causal links were not well understood in those days,
nobody knew how much stimulus was needed, and the Republicans were
fighting every spending increase at every step along the way. (09)
Roosevelt's most important characteristic was a willingness to
experiment. Not all of his policies worked. When something
didn't work, he dropped it or scaled it back. That was one
of his most important characteristics. But his most important
achievement was to increase the price of gold from $20 an ounce
to $35 and get off the gold standard. Without that move, the
spending needed for WW II would have been impossible. (010)
I don't like to say nice things about Hitler. But note that he
ramped up massive spending in Germany as soon as he took office.
As a result, he got Germany out of the Depression several years
sooner than the US. Roosevelt did begin to spend money in larger
amounts when wars began in Europe and Japan. (011)
Note also the comments about "Austrian economics" in that article
you cited and in the comments at the end. The Austrians are well
aware of what the US does, but they also pay attention to Europe. (012)
> After the war, the rest of the globe was in trouble, especially
> Europe and Asia, which were forced to purchase their goods and
> services from the only industrialized country to escape the
> destruction – the US. Roosevelt had nothing to do with the recover. (013)
Please note that I kept saying "Roosevelt and Truman". After
the war, Truman instituted the G.I. Bill and the Marshall Plan.
Calling it the Truman Plan would kill any hope of getting votes
from Republicans. But Marshall was a respected war hero, and
his name made it acceptable. (014)
Truman established the policy that made the US the world banker
and the US dollar the international currency. Those ignorant
Tea Baggers (and I'm not calling them names, they *earned* the
epithet 'ignorant' -- even Republicans call them ignorant, except
when they're trying to get their votes) weakened the "full faith
and credibility" of the US government and caused S&P to reduce
the rating for US Treasury Bonds from AAA to AA+. (015)
But guess what happened. There was a period of uncertainty,
and investors wanted a "safe haven". So the market demonstrated
more sense than S&P: investors *increased* their purchase of
US Treasury Bonds. (016)
John (017)
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