We need a new FDR. Reagan and his pro greed cabal in the federalist society ruined this country. We need another New Deal that puts the rich back in their place. Where is the progressive champion for the current generation? Luigi shows the fake culture wars are stale, the time has come for the people to start fighting back in the very real class war we all have been losing for decades, which just culminated in a foreign billionaire openly buying the presidency and everyone acting like thats fine and normal. Either the people take a stand against the capitalists now, or they never will have the chance again.
He did some good but not nearly enough. He was not able or willing to completely abandon Neoliberalism and thats what has to happen now. Besides, Biden still thought bipartisanship was viable, he was too old and out of touch for todays society and was ill prepared to handle the attacks from conservatives because he basically refused to fight back. We need a fucking fighter, Biden was not capable of that when we needed it most. Trump should be in prison, not being re-elected. All his coming destruction is Biden's fault too for appointing do nothing Merrick Garland to AG. Trump will undo or destroy everything Biden accomplished on behalf of the working class, what a shit legacy.
The relatively populist Dem party--along with its recent pro-America industrial policy accomplishments like CHIPS and the IRA--is ultimately no match for FOX News and its lesser competitors. November's IPSOS poll found that 85% of conservative voters get some/most/all of their news from FOX; and that 80% of these believed that because of Biden and the evil Dems, unemployment and crime were at all time highs; inflation was still as high as it was 3 years ago; and that we are already in a recession.
Until and unless FOX News--and RW media in general--can be required to swear off "alternative facts" in favor of actual journalism, Billionaire Oligarchs will remain our masters.
The media also failed us because it has been compromised by the rich. There is no way to undo this that I can see since apparently punishing these fucking organizations for rampant lying isn't allowed in America. You can't have a functioning democracy if people can't even agree on what the problems are because half of them are lied to on a daily basis. The morons of this country deserve to be well informed too, its not their fault very smart evil people are intentionally manipulating them to trick them into voting against their interests. Most consetvatives are just ignorant, not evil. The rich corporate class are, as always, the real evil ones who justify all of this in service of their bottomless greed.
There's already considerable conservative pushback against attempts by social media to cull mis-/dis-information. GOP talking heads call it "a conspiracy to silence conservative voices." Which is total hogwash.
Until/unless Dems can reframe this as a "Move to stop blatant lying by media" by returning some form of the Fairness Doctrine, or buffing libel law, the facts-free RW media will keep the GOP in power.
More like moneyed privilege. The ultra-rich tend to behave the same irregardless of race, religion or ethnicity.
A few like Carnegie, McKenzie Scott, and the Gates give back in a meaningful way. The rest are obsessed with accumulating more to fill an bottomless pit of psychological need.
No. That was a different Jon Margolis. I met him in 1976 when he saw some campaign literature for Fred Harris with my name on it. He retired from the Tribune and moved to Vermont, where he wrote for a small weekly. We communicated once or twice before his death, two or three years ago.
We need a Bernie Sanders. What a colossal tragedy that Sanders was thrown under the bus by his own party in the 2016 primaries, abetted all along by the illustrious New York Times.
It is a bit of an over statement to say Sanders was thrown under the bus by his own party when he didn't become a member of that party until he decided to run for the presidency.
I don't think sanders would have won becausr Americans are heavily propagandized morons afraid of what they think communism is but I wish he had been allowed to fail on the national stage, because his message would still have reached most Americans and might have led to furthrr change in the future. Now we will never know.
Sanders did win in a way. Biden's 2020 plank included most of Sanders' : $15/Hour, Free College, and creating jobs.
But a GOP House ensured that most of his agenda went unrealized. He and the Dems *barely* got Infrastructure passed--over fierce GOP opposition. Then they only got IRA passed over even stronger GOP opposition by making sure most of the proposed projects were in GOP districts. Ditto for CHIPS.
If we manage to not get utterly thrashed when the Chinese declare war in a few years, our survival will be due to Biden and those three Dem bills.
Sanders couldn't win the primary elections - he was rejected by ordinary Democratic voters. And this year, Harris outperformed Sanders in Vermont. In fact, Sanders has had a harmful effect.
You are understating the case. Hillary won the primary over Bernie by a whopping 12 points. She 55% of the vote to his 43%. The media did not make the size of her win clear but it was huge.
His supporters damaged him too. Booing a competent longterm senator at Dem county convention when she entered the hall. Nasty to hardworking elected and older Dems.
I agree, but even more that they were booing our first chance at a female president. I and my friends were furious about that. I respect Bernie but his supporters don’t realize he has the luxury of representing a very liberal state which gives him the freedom to take stands other elected Dems would get booted out for and which would cost them a national election.
I am an independent. Democrats at least live in the same reality as you and I. Conservatives believe obvious lies and nonsense is actual reality so I could never support any of them. Both parties are in the pockets of the rich, but at least the Dems can actually govern and the economy always improves under them . Cant say the same for Republicans, their presidents are a national embarressment. First Bush, then Trump, its like they intentionally go out to find the stupidest most amoral person in the country and then decide to make them president. Makes no sense. At least Mccain was a decent person at least.
Trump said “In California, they raised [the minimum wage] up to a very high number, and your restaurants are going out of business all over the place. The population is shrinking. It’s had a very negative impact.” This was, as usual for Trump, a blatant lie. The opposite is true: the number fast-food jobs went up after the minimum wage was increased.
I read back in 2006, that voting for a Republican for president was tantamount to voting FOR a recession, choosing to hurt the economy, which hurts ordinary people. If you live in Iowa, is your family’s welfare impacted by a woman in California having an abortion? Are you impacted by a transgendered kid in Oregon getting medical care if you live in SC? Such total bullsh*t.
Yes, we need fighters. Biden showed us what's possible, and TFG 2.0 will again show us (hopefully his base will notice) why we can never again let the presidency be bought or stolen! We're in a second gilded age, and we need to define the right wing billionaires as EXTRACTORS of money from our economy, NOT job creators! Their trickle down economics theory has got to be put down, permanently! That the Dems didn't do that back in the 70's when Reagan started using it again, is why I'm an independent, NOT a Dem. I was shocked when I learned the Will Rogers quote.
"The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands".
The repubs have played this tune before, and the Dems never noticed, or cared to counter it. We have to do away with this trickle down crap once and for all, and perfect our Democracy before we lose it entirely!
> Give it to the people at the bottom and the people at the top will have it before night, anyhow.
That seems to be the problem with the Democrats: the rich still get richer but the mode changes. The problem is the plutocrats and until that's fixed it's just arranging deck chairs on the Titanic.
Really? I would suggest that the razor-thin margin Trump won by refutes that thesis. Never mind the gross distortions of the Electoral College, as much as he and his minions crow about his 'mandate', he barely won re-election.
yes, I think perhaps the fear that the 'other' will get something good from the government may be the basis for the antagonism to the type of social net enjoyed in Northern Europe.
I really hate the caveat that a politician is “not perfect” which is routine in media world. There is no such creature as a perfect person/politician so why do we feel we need to keep saying that?
Biden did as much as possible given his congressional opposition. Every president is limited to varying degrees, by the political, economic, and cultural realities of their time. Sometimes I regret that, as in Biden’s case. Sometimes I’m relieved that strong opposition exists, as I am for the next 4 years.
Democrats succeeded beyond their wildest dreams to make it safe for people to vote their grudges and prejudices instead of their wallets. SS Medicare, unemployment insurance, etc. Gave people the luxury of indulging their grievances. Just like in 1928.
True enough. Biden was atrocious at messaging. He seemed perfectly happy to let Trump blame him for fucking the economy up when he actually fixed it and Trump broke it. Trump also premptively took credit for anything good Biden has done because why not and he said nothing. His weakness created an opening for the fascists and they took it.
The only message that could work for Democrats is one that adopts the Republican “values” by promising to punish people that the majority of white voters don’t like, namely black Americans and other marginalized groups. It’s not the messaging. It’s the message. Unfortunately, 77 million voters want what Trump offers. This is a character flaw in American culture.
Only made possible by the facts-free RW media. That first created, and then endlessly repeated a chorus-line of flat-out economic and racist lies.
But it's all a massive bait-and-switch: Big Business oligopolies, duopolies and monopolies charge us 10-20% more; while they collectively ensure we're paid 15-25% less. The RW media then tells you that the reason you're poor is because the evil Dems let in a torrent of brown-skinned people to steal your job and your vote.
I disagree that Biden was bad at messaging. He travelled around the country giving speeches about the things he was accomplishing but those speeches got very little media attention.
The media did the same to Hillary in 2016. Her rally speeches were almost never covered, let alone televised, while Trump’s and even Bernie’s got a lot of coverage. As a result post election surveys showed most voters could name Trump’s and Bernie’s top issues — trade and immigration for Trump, healthcare for Bernie — but most could not name Hillary’s. In fact she was the one who spoke the most about creating more and better jobs along with specific proposals to create them. (Biden has implemented some of them.)
Even worse the media deliberately twisted Hillary’s words to make her look callous about the working class:
“Hillary Clinton’s “coal gaffe” is a microcosm of her twisted treatment by the media
People fail to recognize and remember how obstructive the republicans in congress are. The failure to enact progressive policies is not always that the Dems didn’t try, but that they didn’t have enough elected officials to counter those on the other side. We must get more democrats elected.
"Neoliberalism" means nothing. There is a whole nostalgia for FDR, who was elected on a platform of balancing the budget and governed in alliance with the most despicable Jim Crow criminals.
-Champion and implement a robust industrial policy, a national healthcare system with cost controls, and increase taxes heavily on multi-million dollar income gains
Vigorously pursue white collar criminals in banking, law, finance, healthcare, warfare, and technology...and mete out real jail time as consequences
-Put a nail in the coffin of identity politics and cultural warfare, and
-Communicate vigorously and wholeheartedly their intentions and accomplishments...
...they will continue being the ass-slaves and whipping boys and girls of the Republicans.
Here's the problem with Biden. He may have tried to enact policies like FDR but he didn't govern like him. FDR harnessed the power of new media to talk directly to his constituency in order to convince them of the wisdom of his policies. President Biden with couldn't or wouldn't do so.
FDR had radio, a then new medium, ready to hand. Biden had nothing like that, he was confronted with such a disparate and atomized media 'ecosystem' no one sensible pretends to fully understand it.
Biden didn't even have Air America, the radio network elite Democrats let be destroyed. Thom Hartmann has a tale to tell about that.
Hartmann's story, in brief, is that Air America didn't own its stations. The fear was the leases could be cancelled, which he says they were, by any "organized money" that wanted them off the air. Therefore they went to DC to try to raise capital from D donors to buy their stations. DC politicians decided to leave it to 'the market'. One of them was Hiliary Clinton, iirc.
To be fair to President Biden, FDR didn't have Fox News (or the Gateway Pundit, etc.), or social media to deal with. Even though his time also had its very loud and influential malcontents (looking at you, Father Coughlin), most of the population at least had a basic shared reality. Now, those on the right are in a bubble which is incredibly difficult to penetrate.
His biggest problem was messaging. He did a lot of great shit that nobody knows about because he didn't go out and beat the drum bragging about them like Trump so low info people assume he did nothing to brag about. Tgose sorts of bragging rallies are crass and the dems act like they are beneath them but they work. Trump is going to take credit for all the jobs the infrastructure bill is creating and many people will believe it because Biden himself didn't take the credit first. Once again the dems go high to their own doom.
As I posted above, Biden did a ton of speeches around the country at the sites where new projects created by his programs were but he got almost no media coverage for them. The one event — out of many — that did get coverage was at the site of the new bridge over the Ohio River — because Mitch McConnell was there.
It's not as simple as that, though Biden remarked he f'd up by not putting his name on the stim checks his legislation, the American Rescue Plan, authorized.
Biden did a lot of events. He walked a UAW picket line, had UAW President as his guest at the next SOTU, had him stand and be recognized, congratulated him on the success of the strike, said it was a model for the future. 'The middle class built America, and Unions built the muddle class' was a frequent line. He attacked 'trickle down' at every opportunity. It's as if the country shut its eyes and ears to it all.
Biden did all that and the UAW president still backed Trump. Greed and stupidity will be the downfall of this nation. We are repeating the fall of Rome step by step.
You need to pay MUCH closer attention. The President of the UAW Shawn Fain, spoke at the first night of the DNC. He had endorsed Harris within days of her candidacy, noting she'd visited a UAW pixket line in 2019. Most other union leaders followed, they'd already endorsed Biden. Check NABTU Biden endorsement on You Tube.
You may be thinking of Teamsters Presudent, Sean McBride, who spoke at the RNC. Given Teamsters had recently had a sucessful strike against UPS, this was disgraceful. My own union, IUOE, endorsed Harris, record manhours and membership.
My father told me a story from his boyhood in Florida of watching FDR on a moving train. One of his playmates remarked with disappointment, "He don't shine!".
Absolutely Biden started on the right path. And Harris was right to open the conversation on housing, which is a huge problem. What we really need is a Marshall Plan on housing. That would pump money into the economy and solve a crucial need that is pushing inflation. But the housing needs to be free of those algorithms that are pushing prices up. We need the free market to work and increased supply to push prices down.
I think 2008 drove most of the small time speculation builders out of business. Another thing to think about is that in a few decades our population will start to decline. That will free up a lot of housing.
The state laws allowing auxiliary dwelling units may eventually help for low income people.
However, I read that 40% or more of the homeless are mentally ill. We need a variety of programs to support people with truly disabling conditions. No one wants to rent to a person who screams and curses at the zombies or lights up a can of gas because they're a robot and need gas to breathe.
That means 60 percent of homeless people are citizens who were failed by our government and can no longer afford homes. Maybe focus on them and not on the 40% that supposedly can't be helped because of mental illness.
Not necessarily. A similarly large percentage are addicted to drugs, with considerable overlap between those two pathological groups. For some, mental illness drove them to drugs, and others developed mental illnesses from their drug use.
Sorting these two populations off the streets through some kind of reimagined institutional care would help a lot. A lot of the old mental institutions were nightmarish, and we surely know a lot more about care and treatment now. But where is the will to go about it in effective but humane ways. I hear too much crude moral judgment and demands that they yank on their bootstraps, when it's plain that they have neither bootstraps nor the strength to pull them.
The crisis on our streets is an indictment of unresponsive government obsessed with capitalist striving at the expense of everything else. Musk is evidence that big money is thoroughly both out of control and increasingly in control of decisions that should depend on the consent of the governed.
Luigi is a murderer and a coward. He's also a hypocrite because he has his capitalist family supporting his legal effort. Dude, this is America. We like capitalism. The Marxist vile you are spouting has been tried and failed here many times over the last century. It's just talk, and it's anti-American. All it does now is cause us to lose elections. Obama was our "new FDR", but the Bernie crowd rejected his approach to progress because it's a lot easier to stand on the sidelines and bitch than to roll up your sleeves and fix the system from within (like Obama did). What we need is a new Obama.
In fact, Obama with his pathologically persistent "Republican Accommodation Syndrome" and neoliberal economics surrounded himself with finance and Wall Street ideologues (even though they called themselves Democrats) and had a destructive response to the Great Recession, bailing out the banks and Wall Street while unable or unwilling to bail out Main Street (5 million Americans lost their homes) which is still angry enough to elect Mr. Trump.
Even the ACA is a poor policy for health care. It essentially helps expand health insurance by using taxes to pay/subsidize commercial health insurance companies with no attention to system reform or cost control.
Democrats tried to pass national health insurance since Truman, and Obama got closer than anyone else. He deserves a lot of credit and all the destructive complaining only helps Republicans.
Whatever, typical brainwashed capitalist drivel. You have no idea what marxism is and I am not even a Marxist. I am a democratic socialist that wants universal healthcare and strong workers rights like every other modern cpuntry on Earth but ours. Its fucking embarrassing how poorly we take care of people in this country considering how rich we are. Its pure greed. The only reason America is still a third world country is because bootlickers like you would rather vote to give all our tax dollars to the rich than take care of your fellow citizens. What is wrong with you? Why do you hate your fellow citizens and wish them to suffer on behalf of the rich? Hope you lose everything in the coming depression Trump is planning. Obama bent the knee to wall street and bailed out the banks that crashed the global economy, he was no friend of the working class. Can't wait for the revolution, things will only get exponentially worse with assholes like Trump and his idiot supporters like you in charge.
...Obama fixed the system from within? How? How is it fixed? What did Obama do to fix it? This is such a baffling thought to me that I genuinely need to hear it's justification.
Well, for starters, Obama won two elections. All this Bernie crap sounds good in comments on Substack posts, but it's just a bunch of words that sound good to a vocal minority of the public. Obama did the hard work of reaching out to voters, listening to them, and building trust. He knew that you couldn't change shit unless you had earned the power to do it. This is America. That's how democracy works. We had our revolution 250 years ago. We don't need another one. What we need are leaders who have the courage to jump in and get shit done.
While popularity is generally a prerequisite of changing a system (how else will people go along with your vision?), it's not a guarantee of action, and we saw little action from the Obama administration to legitimately reform the system. The guy had a filibuster-proof majority in the senate, and nothing fundamentally changed other than Healthcare (still through private insurers, of course, but now required to purchase! Can't piss off corporate america too much). Wall Street got a slap on the wrist for crashing the economy, bribery was made legal by the Supreme Court and he barely talked about it (as a beneficiary of that bribery himself...), and he talked a big game on global warming and then expanded our oil drilling and made us the number 1 oil producer in the world.
He ran as a change candidate in 2008, and was wildly popular for it. Contrast with 2012, and he was basically your average Democrat in terms of popularity (it's only been in the years since he's left office that we've gone back to deifying him.)
We need to go back to the person Obama promised us he would be.
The big (and many small) health insurance companies skate just to the legal side of outright fraud. For twenty-five years as a healthcare provider most of my grey hairs came from dealing with them. They're monsters, pure and simple. If I was a patient in agonizing pain trying to get treatment authorization. I'd definitely be rooting for Luigi.
We need a new *us.* Assuming for a second we get some Great White Knight to save us pure-hearted maidens from twirly mustached villains, within a generation we'd be right back where we are now. The billionaires will be right back to cackling while sucking our blood. Also, I don't see rich men turning "class traitor" like FDR was accused of doing. It's all on us, and it's like the great Tina Turner sang "We don't need another hero."
This would assume the average voter knew what they were doing and what policies would actually benefit them and the nation. They famously don’t, at least not in a voting majority, or they don’t vote in their self interest if they did. I don’t think voters can really be relied on to get us from here to there, because they don’t know how to operate the vehicle.
This is well known. We’ve been relying on the Republic to save us, but its fatal flaw is that when we leave the driving up to a small number of legislators, it is very cheap to buy them and hijack the whole train. The entire political donor sphere is on the order of 1/1000th the size of the federal budget. The leverage is insane.
The only alternative is technocracy / the Deep State, but we just elected someone who wants to dismantle it wholesale, and make the entire apparatus a political function for sale at reasonable prices.
I expect there is a Nobel prize out there for the economist who wants to study the pricing models behind buying influence. It is the issue of our times.
Democracy is wildly imperfect, but it does act as a VETO. Without democracy you have to go to force of arms to change course. Most voters are ignorant, but they do have the ability to say...this sucks lets do something else.
Influence is certainly the issue of our times, but an economist doing Nobel-worthy work in the area would certainly expose the importance of influence on prestigious academic awards, and thereby self-disqualify.
I mean, the need is the need. We need to move in the correct direction and help ourselves. If we don't then we can't expect any one to step up. If we're not able to help ourselves for whatever reason, we're off to the proverbial glue factory.
Takes years to overcome a shock as big as the great depression. You can't automatically snap your fingers and everything is magically better. Investing in infrastructure especially takes time. Only children and conservatives don't understand this.
Would be interested in your thoughts on the effects on the post war economy of the release of pent up demand. We entered WWII after years of economic depression and it’s resultant low consumption rates, then during the war I’ve heard that consumer buying was also depressed (but other than food rationing I’m not sure why?) After the war it appears, when the GIs got home all that pent up demand and self-denial was let loose. Love your ‘column’ here. I feel like I’m learning so much. Thank you for making it free, at least for now, it helps.
But the civilian economy grew immensely during the war: houses, roads, infrastructure, were all built and millions of people earned far better wages than from before the war or even from before the depression.
The government spent money to build factories and employ workers.
Not sure where you’re getting your info about the war years. Able-bodied men of military age were mostly in the military; women filled many of their positions. But roads and cars had to wait for the postwar boom driven by unspent savings and enormous pent up demand. Resources went to war production. Moreover unspent earnings went into war bonds which boosted savings that postwar fueled consumption in the Truman and Eisenhower years.
Of course there was rationing and there were shortages, but people had food and shelter and saved money on top of that. There was still significant unemployment before the war and wages were mostly terrible. If you read about Kaiser's plants in CA, built on bulldozed agricultural land - workers poured in to get wages that were far in excess of the farm worker jobs that had been available. And the women got wages too - as did soldiers. I think Americans have forgotten how low the standard of living was during the depression and even before.
Rationing of meat, butter, tires, much of it needed for the war effort feeding armies and civilians as far away as the USSR and China and much of it needed for our soldiers too.
People planted Victory gardens, saved bacon grease for bombs, kids held scrap drives for metals to recycling.
There was a lot more rationing than just for food. Think, for example, of automobiles and even tires. (The war effort needed the metals and rubbers for weapons-building.) Gasoline, shoes, etc. ... IOW, virtually everything. https://www.nationalww2museum.org/war/articles/rationing-during-wwii
A lot of the rationing and materials drives were superfluous. They were intended to give everyone a sense of community. If we're all in this together then we will all accept sacrifices. We forgot this lesson in VietNam, with negative consequences.
Of course WWII WAS different, so no 1:1 correspondence.
Lot of the Ruhr Valley in Germany their industrial base was bombed to smithereens. The Soviets had no compunction about leveling cities and towns they invaded. And the Nazis torched earth policy leaving the USSR and Eastern Europe was as bad or worse.
There was a lot of damage to their industrial base, but not as much as one would expect given how badly Germany was bombed. It isn't (or wasn't at the time) so easy to bomb away entire industries, since they didn't have precision bombing back then. During the war, the germans managed to resume production quickly after the bombings, which is remarkable considering how intense the bombing was.
Much of the Allied bombing was against German cities, which meant that the Germans managed to maintain a high level of war production until very late in the war. Hitler wanted to destroy the entire industrial base for Germany as the german forces withdrew, but his orders were not carried out in full.
According to some estimates, 75-80 % of German industrial capcacity was intact or repairable after the war.
"Despite the scale of material damage, industrial equipment and plants survived the war remarkably intact. Even in Germany and Italy, the two main targets of Allied strategic bombing, industrial fixed capital grew by 20% and 30%, respectively, between 1936 and 1945. Power-generating capacity was also enlarged and needed little repair."
"The air operations inflicted heavy damage on German cities, infrastructure, and industrial centers, destroying about 20% of the German industrial capital and residential housing stock (Albers, 1989)."
To add to this….the social component. During the Depression, individualism didn’t work; we needed community to live and survive and many built it. Same during WW2. Being in a community with rations would help one fair better than being alone. Community was necessary. Add to that how FDR had a Democratic Congress the whole time. That helped.
But in the end, community was valued. I wonder if that sense of community and interdependence made the economy so successful…..everyone cared about each other and created policies and practices to support it.
As I mentioned in my post somewhere in here, the end of WWII unleashed the huge pent up demand and war savings (which you have to discount for inflation.) More importantly, there had been dramatic technological advances made during the war and, more than most appreciate, during the Depression.
Dogs don't get up in your face if they don't understand. Dogs don't carry giant chips on their shoulders. Dogs don't think the world owes them a living.
"Dogs learn." I think this is the most important point. MAGAts have a block against learning anything - no matter the proof provided - that goes against what they are told by Cheeto and Fox and other RW sources. According to them, it's lies, fake news, propaganda from the Deep State, etc. Ironic and an example of projection on a national scale since the Republican party, as now constituted, is built completely on (as someone said in "Elf"), a "throne of lies."
A 'follow the money' approach is where I begin which is to say economics but social and cultural factors can take over. And they can take over when they're out of sync with laissez-faire which isn't a doctrine or theory but its abdication since the effects of 'leave it alone' depend a lot on where you start out. Where did we start out? Having a lot of Europeans turned loose on a continent of unexploited natural resources, a hugely distorted environment.
This isn't a model. It was a one-off.
We've been living in a bubble from the start. The American economy is a frat party. Somebody else pays the bills and we've been drunk the whole time and still are, taking massive energy subsidies for granted. And now we've elected frat boys to run everything, and Bluto as president. Drink until you die, never grow up and let someone else clean up. This certainly became the national ethos with Bush. Screw it up, call daddy. You can rely on the old man's money.
More friction would have been good. Pushback from the parents. Junior can't have another car after crashing the Cadillac. Too little friction is a distortion that has to be counteracted. With trade, for example. So it's about balance, which is a hard political sell. Comparative advantage makes sense on paper but it's not a reflection of cultural and political reality. Free trade is good, up to a point. In our case a typically puritanical, all-or-nothing approach won.
A bad idea.
But even then workers, who we knew were going to get ravaged, could have been protected. They should have gotten Scandinavian levels of social benefits. We could have afforded it. But, this is America, and that is 'communism,' so the rich took it all. Now, in their infinite greed, they're plundering the past, liquidating physical and social capital. Human (our) lives are on the table, which isn't as new as we'd like to think. And they're plundering the future.
Comparative disadvantage rules at the polls. A politics of vengeance and retribution.
Citizens with grudges (I wonder why, maybe a lack of social welfare) are voting against their interests because people they don't like, notably minorities, are hurt worse. Prejudice isn't only bad morality it's bad economics. Same thing true of society as your stocks, if you have some -- diversity is stability. Republicans learned in '08, though, that they had such complete control they could get the society, otherwise known as the suckers, to pay for their mistakes.
So we're back at the frat party and boom and bust. Go, Bluto-baby! Drill, baby, drill! This is so sick it's hard to see, but good economic practice is getting dragged around by the hair stone-age style.
Brilliant point: “ Things demand a lot on where you start” — the fact America was a cosmically wealthy mother lode of natural sources.
Robber barons and robber bullies (#TraitortRump) [ never refer to a monster with a deferential title: look up “ mere exposure effect” ] have bullying and lapping up the lucre for a WHILE.
America is not Sweden, which is barely as big as Michigan and, until very recently, culturally homogeneous. As Joseph Schumpeter observed, “. . . . it is absurd for other nations to try to copy Swedish examples; the only effective way of doing so would be to import the Swedes and put them in charge.”
Couldn't agree more Dr. Krugman: I've always responded to "the war got us out of the Depression, not the New Deal" argument by pointing out that this argument actually only AFFIRMS the New Deal. After all, what was the New Deal if nothing less than an effort by government to stimulate economic growth and full employment through public spending and investment? And if that's what The New Deal was, what was WWII? It was (among a lot of other things such as a life and death struggle to defeat fascism) yet another example of the same thing -- government spending and investment that stimulated economic growth and full employment. When seen is this light, the war was NOT an alternative to the New Deal, but rather the largest public works program in US History: In short, an EXTENSION of the New Deal that only affirmed the Keynesian model implemented in 1933. Dwight D. Eisenhower -- a Republican no less -- also seems to have tacitly understood this when he threw his support behind The Federal Highway Act. Oh, and in the meantime we also happened to have strong unions, high marginal tax rates, government oversight of the free market, and high federal spending, while simultaneously the economy grew by leaps and bounds, tax receipts increased, the rich still got a lot richer, and debt as a percentage of GDP came down year after year. Granted, not everyone benefited from this postwar boom: there were pockets of poverty across the nation, Jim Crow persisted in the South, and racism continued to stand in the way of opportunity for millions of Americans from coast to coast. Nevertheless, for much of the middle class, life was better than it had ever been.
Hmmm, ....Maybe government isn't always the problem: maybe it's actually, from time to time, the solution!
No one has shown that the Keynesian model does not work because it does and it is even very logical and very straight forward.
Thus, even as a republican, Eisenhower was operating under common knowledge and economic reality.
Most GOP and Dems used to agree on basic facts but simply differed in views of the degree and size of government and how long the bootstraps needed to be to help the poor and how secure the economic safety belts needed to be - that was about it post WWII and post GD, from what I can tell. Sure, there have always been ideological fringes, but no so mainstream.
The lack of regulations that allowed the bubble and bust crash in 1929 and that allowed the Great Depression loomed large in people's minds for quite awhile, I think.
Then Reagan (and also the Ayn Rand cult) came along with all of that nonsense and since he was a popular figure for the GOP, that had been decimated by Nixon's Watergate scandal, the GOP attempted to shove these Reagan based square pegs of ideology into the round holes of reality by "whittling away" facts and the truth.
They also did it as a way to justify tax cuts for wealthy donors.
Keynesian economics is so straightforward and logical, that anything other than Keynesian is like saying the world is flat, but that is what the GOP exclusively do, post Reagan.
In fact, in order to make the square pegs seem to fit, they had to create a whole 'nuther universe by creating right-wing media bubbles so that others may be less able to point out all of what should be obvious nonsense. Their base now does not even believe in objective reality or facts anymore.
I have a relative that worked on highway projects to help pay for college. He will never admit the scaffolding that was erected by the previous WW2 generation that allowed him to prosper. Nope, government spending is always the problem.
The author is a hardcore libertarian but the story he tells is a massive verification of Keynes. The government built the foundations of post war prosperity.
The other thing that happened was a huge capital investment during the war that upgraded manufacturing quality and efficiency and also created a huge excess manufacturing capability. Postwar consumers found things like aluminum fishing boats and kitchen utensils at affordable prices. Dreams of having things like a luxury automobile were no longer dreams for the middle classes. The process upgrades also made exports more attractive. There was also a problem in that those war investments weren’t repeated each decade and lots of US heavy industry fell behind so that by the 80’s it made sense to outsource labor intensive processes either to suppliers who had upgraded or had low cost labor; many of those were foreign. Hopefully things like the Chips Act can provide a similar benefit but from a policy standpoint what is needed is a carrot and stick method of encouraging capital reinvestment to replace greedy earnings distributions like stock buybacks.
By the end of the new deals, most economic metrics were back to normal and unemployment had been cut in half.
This is not surprising since employment is a lagging indicator.
The ramp up for the war helped to seal the deal, but even war production is a government fueled stimulus hiring people to make things that often have a limited useful life, like bombs. Make it and then blow it up.
Fortunately the industrial capacity was built. We kept feeding the cold war beast for decades and this includes Reagan.
So when some like to say, but wait, wasn't it the war... Is that really any different?
It is still the government and government jobs.
The point is that these paychecks are spent in businesses, and when the government spends, this becomes paychecks, as well and the cycle repeats as the money then flows upward as profits and incomes and is taxed to be put right back in the economy again. So, as long as not too much money goes to the top landing in passive non-GDP investments that so not create new jobs and growth in GDP.
This money at the top passive investment issue is why the GOP rarely seem much from their tax cuts, if aimed at the top.
The more money put to work at the bottom, often the better. R&D and education work well too.
Keep the dollars moving generating economic activity.
The Marshall plan ended in 1952. It was important to help Western Europe recover, but not to the us economy. As Paul noted, we hardly exported anything in the 1950s.
"During the four years that the plan was in effect, the United States donated $17 billion (equivalent to $240.95 billion in 2023) in economic and technical assistance to help the recovery of the European countries that joined the Organisation for European Economic Co-operation. The $17 billion was in the context of a US GDP of $258 billion in 1948, and on top of $17 billion in American aid to Europe between the end of the war and the start of the plan that is counted separately from the Marshall Plan. The Marshall Plan was replaced by the Mutual Security Plan at the end of 1951; that new plan gave away about $7.5 billion annually until 1961 when it was replaced by another program."
I was wondering that as well. Did the Marshall Plan numbers count as trade? How much of the Marshall Plan flowed back to the USA in terms of purchases OR were the purchases resulting from the Marshall Plan made to European firms?
I wondered about that too, so I mentioned it above, but then he also mentions that in the Eisenhower era, there was not a great deal of foreign trade with Europe, relatively speaking, so maybe that is why he does not get into it.
Paul, Occam's Razor is often the best explanation for a situation and you have nailed it on this trade issue. The reason for the growth of the middle class post WWII through the 70s is due to the same basic facts - recall seening a car with bad shock absorbers bouncing down the road. We call that a highly underdamped suspension. Ever ride a buckboard? That's severely overdamped. The 50s thru the 70s were the result of a properly "dampened" economic system. High marginal tax rates didn't raise a whole lot more for the fed because nobody in their right mind would write a check for 94% (reduced to 70% by 1980) of 'excess income' to the feds. Both personal and corporate income taxes were progressive. Corporate retained earning were limited by tax policy to prohibit growth of corporations to monopolostic power, resulting in livable dividend distribution to shareholders and wages to the poeople who actually did the work, not just the CEOs and boated management. Anti-monopoly laws were enforced, notably breaking up giants like AT&T, resulting in more jobs, better technology, higher personal incomes and lower prices for consumers. Glass-Steagall kept banks from gambling with our hard earned bank deposits, deposits which grew with reasonable interest based on banks serving the community's growth, not gambling in the stock market. The period from 1945 thru 1980 was a 'well damped' period in our economy, cruising pretty smoothly, not bouncing out of control, down through decades of growth, using financial rules that made sense, rules that still do, rules that answered the question "OK, how much is too much?" and served the principle of equality promised by our Constitution. We need to fall back to a rules based economy. Economic activity is a game. Games have rules. No rules, no game.
That's very debatable argument. For example, Glass-Steagall didn't prevent bank gambling at all - it just prevented banks from selling securities. The S&L collapse had nothing to do with Glass-Steagall, neither did the massive Continental bank failure. Tax rates of 90% or 70% were _marginal_ rates and post deduction - so high earners still were able to get a lot of money. More to the point, the already wealthy kept their wealth and grew it. Timothy Mellon, who was one of Trump's megadonors is the grandson of Andrew Mellon and hat $200million to give Trump without seriously dipping into his inherited wealth. Trump's awful father accumulated hundreds of millions prior to the 1980s. Corporate retained earnings were enormous. Economies are not static - all the concentration of wealth we see in our era grew out of the process that people are now trying to pretend was rational and egalitarian. JFKs first speech to the US senate in 1952 was a complaint about how Federal government policies were crushing unions and hollowing out the manufacturing base of northern states.
The GOP love the "only game in town" myth as a way to excuse the post WWII boom.
They want to ignore the success of that era, because it showed that our success came with unions, the GI Bill, SS, R&D, space race, and a large middle class that drove the economy and expanded it in an era post industrialist robber baron and when the tax rate on the wealthiest was very high.
It showed the wealthy few were fairly irrelevant to our success.
What they ignore with their "only game in town" theory, is that our trading partners would have to be able to buy our goods in order for this theory to work. They would need economies not so decimated by war that they have something to trade with, people with incomes and governments with revenue.
No one can succeed by being the only game in town. Who would buy your stuff?
Thus, the Marshall Plan, which was in a sense a stimulus for the USA as much as it was for Europe.
Once again, government saved the day.
Then as Krugman, the trade expert points out, there was not a great deal of foreign trade at the time, regardless, and most was with Canada and Mexico.
This means that a lot of our growth success was internal, so once again, the growing middle class from the GI Bill (education and home loans) and unions, and yes, even government spending on the SS, the R&D from the space race, and yes, even the cold war MIC.
Capitalism is a great mechanism, but it does not work all by itself and is not perfect. Government can keep it running and on the rails by not allowing monopolies or the creation of bubbles that pop and by establishing min wages and good labor laws, regulations, etc. We have seen the nightmares that can happen when regulations are removed or not implemented soon enough with the great recession and Great Depression, etc. Too big to fail does not work. A "hands off approach" does not work.
Sadly, Trump's tariff plan may cause a global recession and GOP plans for more deregulation may usher in even more nightmares.
The weirdest thing about “Make America Great Again” is that it sounded originally like the thing it wanted to bring back was the great economy of the 1950s and 1960s, which was the golden age for so many of the “rust belt” onetime union strongholds that have gone heavily for Trump; but of course, that was also the heyday of Democrats and unions. Now we hear that Trump thinks of American “Greatness” in terms of the Gilded Age, which is crazy for a “populist” given that it puts him on the opposite side from the actual, historical populists who despised the robber barons Trump seeks to emulate. The postwar boom was really peak middle class prosperity; the Gilded Age was when most of our ancestors (the American working class) were fighting for scraps.
The Gilded Age was also when the Republicans sold out reconstruction to be replaced by Jim Crow. Trump is heading the US toward a Jim Crow for all of the poor.
America invested in physical and human capital after WW2 - in highways and university education at public expense of its returning soldiers. Indeed steep progressive taxation helped create a more equal society, but public investment was also part of the policy mix.
I can tell you from my perch: rent to a large, corporate-owned apt complex consumes my entire pension ( which money obviously gots to wealthy holders or REIT) and I’m still working in late 60s. It’s a very VERY basic cybernetic principal:
All organisms organic and economic work to perpetuate and grow themselves.
#WealthTaxNow , direct redistribution, stop the excuses: how can transferring money from the rich to the poor NOT transfer money from the rich to the poor? Listening to neoliberals discussing why that won’t work is rare—because the subject is EVER EVEN BROUGHT UP. THAT’S the ultimate debating technique. //
Yes, when there are shortages of absolute necessities, like housing, and when so much is corporate owned, it means that prices can rise to where it sucks up most all of a paycheck and that is what the "market will bear" under such conditions.
This takes money away from other aspects of our economy and businesses and is very restrictive. I think it is a big danger to our economy.
I do not think a wealth tax would fix this, but I think government needs to get involved to create serious disincentives for this and incentives to build new.
When consumers no longer have a choice under shortage conditions like this, this causes free market forces to not be able to work to set prices and we need government intervention.
The government also needs to build a ton of senior housing, as well.
Yes! And more on how the monopolies, duopolies, oligopolies in every single industry are squeezing the 99% with higher consumer prices and lower worker wages.
Similar to how the Hoover Institute had to retract its report on Fast Food job losses. The opposite is true, California added jobs when they went to $20 and hour minimum wage. Republicans are wrong a lot when it comes to the economy.
First of all my ideology is that I am a hold-my-nose Democrat. I almost always vote for the Democrat in state and national elections because they are not as bad as the Republicans.
Back to the issue at hand.
Where did the machinery and materials to rebuild Europe and Japan come from if not from the US? Where did the food to feed them come from at first?
The people of the US had gone through a depression then a war with full employment and a lot of saving at home because there was nothing to buy. When those guys came home they were ready to move on with life and they spent like the drunken sailors they had sometimes been. The domestic economy roared as the white men and their new families were denied nothing. Income and sales taxes paid the way, no tariffs needed.
If I understand your thesis correctly — it may be missing — Mr Krugman already showed where you were wrong by pointing out that the post WWII boom could not have been because of exports, because exports were too small, a very tiny fraction of the economy. It just wasn’t big enough to produce that level of effect.
This is why I love your column. Its like auditing an upper level econ class at college. I was one of the commenters yesterday who said that the postwar boom was because of having no competition.
One question: Because the US didn't behave like the historical "victor" after the war (Marshall Plan, massive rebuilding money for Japan, etc), is the calculus any different? We spent a lot of money getting the world back in its feet after all.
The "pent up demand" answer makes the most sense to me, along with the massive industrial capacity we had from the war build up. That additional capacity probably let us avoid the inflation spiral that usually results from massive demand.
Yes, pent up demand combined with the GI bill for education and housing and good union wages. Workers had more to spend fulfilling those demands as a result = economic activity = GDP.
Pete Rodriguez, did you really say, ..."finely balanced socialist/capitalist model employed by the American democratic system of government...achieving economic success"? Our record of poverty and its results in homelessness, underemployment, hunger, and lack of health care for too many of our people is not economic success.
Interestingly, when the rich actually paid progressive tax rates, we had a much better social safety net. Homelessness exploded because cash benefits for disabled people and impoverished single-parent families no longer actually brought people to the Federal Poverty Level. This transfer income had been sufficient for most of the basic necessities of life: housing, food, clothing. Fast forward to the growing lack of tax income to support this expenditure which resulted in frozen benefits for a quarter century. I watched the impact of this conversion of federally-funded entitlement funding into block granting. Today, family cash supports (aka rent money) in many states bring families only to 10% of FPL. “Generous” states like mine are closer to 30% FPL. Families now spend up to 80% of household income on housing, and it only takes one episode of bad luck or bad judgment for them to become homeless. We MUST tax the rich to make any progress in preventing or resolving homelessness. Which requires preventing or resolving those oligarchs’ control of elections and corrupting elected representatives and judges.
Thanks, Marge - the necessary policy steps you call for depend on our ability to convince majorities of voters in municipalities and states as well as in Federal elections. Trump didn't win a majority of voters this time, and we have the opportunity to elect better public servants in the next years, but supportable candidates need to find the right way to express these realities.
And we need the taxes from the oligarchs to pay for it. “Welfare” has not been a priority for either party, but if the federal budget was sufficient…..
To Someone working at the level of Nobel/Times analyst, the impossibility of actually grasping life as a clerk in Pizza Hut trying to save up $3000 to move into an apt to which he will pay 70% of his income is impossible.
It’s impossible to imagine shit that bad, with no end in sight.
We need a new FDR. Reagan and his pro greed cabal in the federalist society ruined this country. We need another New Deal that puts the rich back in their place. Where is the progressive champion for the current generation? Luigi shows the fake culture wars are stale, the time has come for the people to start fighting back in the very real class war we all have been losing for decades, which just culminated in a foreign billionaire openly buying the presidency and everyone acting like thats fine and normal. Either the people take a stand against the capitalists now, or they never will have the chance again.
We just had him: Biden.
He did some good but not nearly enough. He was not able or willing to completely abandon Neoliberalism and thats what has to happen now. Besides, Biden still thought bipartisanship was viable, he was too old and out of touch for todays society and was ill prepared to handle the attacks from conservatives because he basically refused to fight back. We need a fucking fighter, Biden was not capable of that when we needed it most. Trump should be in prison, not being re-elected. All his coming destruction is Biden's fault too for appointing do nothing Merrick Garland to AG. Trump will undo or destroy everything Biden accomplished on behalf of the working class, what a shit legacy.
The relatively populist Dem party--along with its recent pro-America industrial policy accomplishments like CHIPS and the IRA--is ultimately no match for FOX News and its lesser competitors. November's IPSOS poll found that 85% of conservative voters get some/most/all of their news from FOX; and that 80% of these believed that because of Biden and the evil Dems, unemployment and crime were at all time highs; inflation was still as high as it was 3 years ago; and that we are already in a recession.
Until and unless FOX News--and RW media in general--can be required to swear off "alternative facts" in favor of actual journalism, Billionaire Oligarchs will remain our masters.
The media also failed us because it has been compromised by the rich. There is no way to undo this that I can see since apparently punishing these fucking organizations for rampant lying isn't allowed in America. You can't have a functioning democracy if people can't even agree on what the problems are because half of them are lied to on a daily basis. The morons of this country deserve to be well informed too, its not their fault very smart evil people are intentionally manipulating them to trick them into voting against their interests. Most consetvatives are just ignorant, not evil. The rich corporate class are, as always, the real evil ones who justify all of this in service of their bottomless greed.
There's already considerable conservative pushback against attempts by social media to cull mis-/dis-information. GOP talking heads call it "a conspiracy to silence conservative voices." Which is total hogwash.
Until/unless Dems can reframe this as a "Move to stop blatant lying by media" by returning some form of the Fairness Doctrine, or buffing libel law, the facts-free RW media will keep the GOP in power.
They chose race privilege over prosperity.
More like moneyed privilege. The ultra-rich tend to behave the same irregardless of race, religion or ethnicity.
A few like Carnegie, McKenzie Scott, and the Gates give back in a meaningful way. The rest are obsessed with accumulating more to fill an bottomless pit of psychological need.
Victor, you're so right.
If Biden had been the transition he was supposed to be…
If FAUX news was not blasting 24/7 to the under educated...
Careful there Andy. You're sounding a lot like me, of years ago.
WORD!!!
So, Biden wasn't perfect? Accepted. But he was the best president in 75 years.
Did you used to work at the Chicago Tribune back in the 1980s and 90s?
No. That was a different Jon Margolis. I met him in 1976 when he saw some campaign literature for Fred Harris with my name on it. He retired from the Tribune and moved to Vermont, where he wrote for a small weekly. We communicated once or twice before his death, two or three years ago.
Thanks for the reply, and the update. I always admired his work. Sorry to hear he has passed.
We need a Bernie Sanders. What a colossal tragedy that Sanders was thrown under the bus by his own party in the 2016 primaries, abetted all along by the illustrious New York Times.
It is a bit of an over statement to say Sanders was thrown under the bus by his own party when he didn't become a member of that party until he decided to run for the presidency.
I don't think sanders would have won becausr Americans are heavily propagandized morons afraid of what they think communism is but I wish he had been allowed to fail on the national stage, because his message would still have reached most Americans and might have led to furthrr change in the future. Now we will never know.
Sanders did win in a way. Biden's 2020 plank included most of Sanders' : $15/Hour, Free College, and creating jobs.
But a GOP House ensured that most of his agenda went unrealized. He and the Dems *barely* got Infrastructure passed--over fierce GOP opposition. Then they only got IRA passed over even stronger GOP opposition by making sure most of the proposed projects were in GOP districts. Ditto for CHIPS.
If we manage to not get utterly thrashed when the Chinese declare war in a few years, our survival will be due to Biden and those three Dem bills.
2027 is when they are supposedly going to invade Taiwan. We are right on schedule.
Thank you for mentioning this
Bernie is an Independant, he has no party.
Sanders couldn't win the primary elections - he was rejected by ordinary Democratic voters. And this year, Harris outperformed Sanders in Vermont. In fact, Sanders has had a harmful effect.
You are understating the case. Hillary won the primary over Bernie by a whopping 12 points. She 55% of the vote to his 43%. The media did not make the size of her win clear but it was huge.
Bernie did a lot of damage to Dems in 2016, helped Hillary lose
this country is incapable of honest elections... any woman would have lost because of the fools that voted for drumpf...
His supporters damaged him too. Booing a competent longterm senator at Dem county convention when she entered the hall. Nasty to hardworking elected and older Dems.
I agree, but even more that they were booing our first chance at a female president. I and my friends were furious about that. I respect Bernie but his supporters don’t realize he has the luxury of representing a very liberal state which gives him the freedom to take stands other elected Dems would get booted out for and which would cost them a national election.
I moved to Vermont just as Bernie was catching on, and I loved to hear about him torching Republicans in New Hampshire, where I had just left.
If the democrats are so bad, why are you still a democrat?
I am an independent. Democrats at least live in the same reality as you and I. Conservatives believe obvious lies and nonsense is actual reality so I could never support any of them. Both parties are in the pockets of the rich, but at least the Dems can actually govern and the economy always improves under them . Cant say the same for Republicans, their presidents are a national embarressment. First Bush, then Trump, its like they intentionally go out to find the stupidest most amoral person in the country and then decide to make them president. Makes no sense. At least Mccain was a decent person at least.
Trump said “In California, they raised [the minimum wage] up to a very high number, and your restaurants are going out of business all over the place. The population is shrinking. It’s had a very negative impact.” This was, as usual for Trump, a blatant lie. The opposite is true: the number fast-food jobs went up after the minimum wage was increased.
I read back in 2006, that voting for a Republican for president was tantamount to voting FOR a recession, choosing to hurt the economy, which hurts ordinary people. If you live in Iowa, is your family’s welfare impacted by a woman in California having an abortion? Are you impacted by a transgendered kid in Oregon getting medical care if you live in SC? Such total bullsh*t.
Yes, we need fighters. Biden showed us what's possible, and TFG 2.0 will again show us (hopefully his base will notice) why we can never again let the presidency be bought or stolen! We're in a second gilded age, and we need to define the right wing billionaires as EXTRACTORS of money from our economy, NOT job creators! Their trickle down economics theory has got to be put down, permanently! That the Dems didn't do that back in the 70's when Reagan started using it again, is why I'm an independent, NOT a Dem. I was shocked when I learned the Will Rogers quote.
"The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands".
The repubs have played this tune before, and the Dems never noticed, or cared to counter it. We have to do away with this trickle down crap once and for all, and perfect our Democracy before we lose it entirely!
> Give it to the people at the bottom and the people at the top will have it before night, anyhow.
That seems to be the problem with the Democrats: the rich still get richer but the mode changes. The problem is the plutocrats and until that's fixed it's just arranging deck chairs on the Titanic.
Too many people at the bottom are too willing to hand it to the epeople at the top.
(Like your nom du net too.)
The Biden you’re describing would never have been elected. America is at heart a conservative country, fearful of change and resentful of the “other.”
Really? I would suggest that the razor-thin margin Trump won by refutes that thesis. Never mind the gross distortions of the Electoral College, as much as he and his minions crow about his 'mandate', he barely won re-election.
yes, I think perhaps the fear that the 'other' will get something good from the government may be the basis for the antagonism to the type of social net enjoyed in Northern Europe.
What you’re saying seems to be true. My trump loving cousins in Texas claim that we democrats just love our free goodies the government gives us.
I think she means poor people receiving food stamps.
Spot on Andy!
Joe Biden was not perfect, just really good. A huge mistake was naming Garland as AG to compensate for the SCOTUS seat stolen by Bitch McConnell.
I really hate the caveat that a politician is “not perfect” which is routine in media world. There is no such creature as a perfect person/politician so why do we feel we need to keep saying that?
Biden did as much as possible given his congressional opposition. Every president is limited to varying degrees, by the political, economic, and cultural realities of their time. Sometimes I regret that, as in Biden’s case. Sometimes I’m relieved that strong opposition exists, as I am for the next 4 years.
Democrats succeeded beyond their wildest dreams to make it safe for people to vote their grudges and prejudices instead of their wallets. SS Medicare, unemployment insurance, etc. Gave people the luxury of indulging their grievances. Just like in 1928.
True enough. Biden was atrocious at messaging. He seemed perfectly happy to let Trump blame him for fucking the economy up when he actually fixed it and Trump broke it. Trump also premptively took credit for anything good Biden has done because why not and he said nothing. His weakness created an opening for the fascists and they took it.
The only message that could work for Democrats is one that adopts the Republican “values” by promising to punish people that the majority of white voters don’t like, namely black Americans and other marginalized groups. It’s not the messaging. It’s the message. Unfortunately, 77 million voters want what Trump offers. This is a character flaw in American culture.
Yep, bottom line, racism and falsehoods fed to them 24/7.
Only made possible by the facts-free RW media. That first created, and then endlessly repeated a chorus-line of flat-out economic and racist lies.
But it's all a massive bait-and-switch: Big Business oligopolies, duopolies and monopolies charge us 10-20% more; while they collectively ensure we're paid 15-25% less. The RW media then tells you that the reason you're poor is because the evil Dems let in a torrent of brown-skinned people to steal your job and your vote.
I disagree that Biden was bad at messaging. He travelled around the country giving speeches about the things he was accomplishing but those speeches got very little media attention.
The media did the same to Hillary in 2016. Her rally speeches were almost never covered, let alone televised, while Trump’s and even Bernie’s got a lot of coverage. As a result post election surveys showed most voters could name Trump’s and Bernie’s top issues — trade and immigration for Trump, healthcare for Bernie — but most could not name Hillary’s. In fact she was the one who spoke the most about creating more and better jobs along with specific proposals to create them. (Biden has implemented some of them.)
Even worse the media deliberately twisted Hillary’s words to make her look callous about the working class:
“Hillary Clinton’s “coal gaffe” is a microcosm of her twisted treatment by the media
She navigated a hall of mirrors.”
https://www.vox.com/energy-and-environment/2017/9/15/16306158/hillary-clinton-hall-of-mirrors
People fail to recognize and remember how obstructive the republicans in congress are. The failure to enact progressive policies is not always that the Dems didn’t try, but that they didn’t have enough elected officials to counter those on the other side. We must get more democrats elected.
My sentiments exactly.
"Neoliberalism" means nothing. There is a whole nostalgia for FDR, who was elected on a platform of balancing the budget and governed in alliance with the most despicable Jim Crow criminals.
I would bet that the vast majority of people have no clue that “neoliberalism” refers to rightwing libertarian, free-market capitalism.
That was the original meaning but it is often used to attack Democrats
Until such Time as the Dems:
-Reject neoliberalism
-Restore the new deal
-Champion and implement a robust industrial policy, a national healthcare system with cost controls, and increase taxes heavily on multi-million dollar income gains
Vigorously pursue white collar criminals in banking, law, finance, healthcare, warfare, and technology...and mete out real jail time as consequences
-Put a nail in the coffin of identity politics and cultural warfare, and
-Communicate vigorously and wholeheartedly their intentions and accomplishments...
...they will continue being the ass-slaves and whipping boys and girls of the Republicans.
Here's the problem with Biden. He may have tried to enact policies like FDR but he didn't govern like him. FDR harnessed the power of new media to talk directly to his constituency in order to convince them of the wisdom of his policies. President Biden with couldn't or wouldn't do so.
FDR had radio, a then new medium, ready to hand. Biden had nothing like that, he was confronted with such a disparate and atomized media 'ecosystem' no one sensible pretends to fully understand it.
Biden didn't even have Air America, the radio network elite Democrats let be destroyed. Thom Hartmann has a tale to tell about that.
Right and they allowed the right wing to dominate the air for 30 years and the new media online for 10.
Again not to say Biden could've held his own in those spaces but pretty weak attempt to reach out.
The "elite" democrats need to get outside of their high paid consultant bubble.
I'm not sure how "elite Democrats" allowed a private venture to be destroyed by its own founder Evan Cohen making illegal loans and going bankrupt.
Hartmann's story, in brief, is that Air America didn't own its stations. The fear was the leases could be cancelled, which he says they were, by any "organized money" that wanted them off the air. Therefore they went to DC to try to raise capital from D donors to buy their stations. DC politicians decided to leave it to 'the market'. One of them was Hiliary Clinton, iirc.
Kamala should have gone on every podcast she could find. That is where the youth get their news nowadays.
Youths are not a reliable voting block. Women on the other hand vote in larger numbers than men.
To be fair to President Biden, FDR didn't have Fox News (or the Gateway Pundit, etc.), or social media to deal with. Even though his time also had its very loud and influential malcontents (looking at you, Father Coughlin), most of the population at least had a basic shared reality. Now, those on the right are in a bubble which is incredibly difficult to penetrate.
He actually used Father Coughlin!
His biggest problem was messaging. He did a lot of great shit that nobody knows about because he didn't go out and beat the drum bragging about them like Trump so low info people assume he did nothing to brag about. Tgose sorts of bragging rallies are crass and the dems act like they are beneath them but they work. Trump is going to take credit for all the jobs the infrastructure bill is creating and many people will believe it because Biden himself didn't take the credit first. Once again the dems go high to their own doom.
As I posted above, Biden did a ton of speeches around the country at the sites where new projects created by his programs were but he got almost no media coverage for them. The one event — out of many — that did get coverage was at the site of the new bridge over the Ohio River — because Mitch McConnell was there.
It's not as simple as that, though Biden remarked he f'd up by not putting his name on the stim checks his legislation, the American Rescue Plan, authorized.
Biden did a lot of events. He walked a UAW picket line, had UAW President as his guest at the next SOTU, had him stand and be recognized, congratulated him on the success of the strike, said it was a model for the future. 'The middle class built America, and Unions built the muddle class' was a frequent line. He attacked 'trickle down' at every opportunity. It's as if the country shut its eyes and ears to it all.
The country is about to suffer for it.
Biden did all that and the UAW president still backed Trump. Greed and stupidity will be the downfall of this nation. We are repeating the fall of Rome step by step.
You need to pay MUCH closer attention. The President of the UAW Shawn Fain, spoke at the first night of the DNC. He had endorsed Harris within days of her candidacy, noting she'd visited a UAW pixket line in 2019. Most other union leaders followed, they'd already endorsed Biden. Check NABTU Biden endorsement on You Tube.
You may be thinking of Teamsters Presudent, Sean McBride, who spoke at the RNC. Given Teamsters had recently had a sucessful strike against UPS, this was disgraceful. My own union, IUOE, endorsed Harris, record manhours and membership.
in FDR's time the common image of POTUS was of a bigger than life god like
individual that spoke down to us from the capitol via new technology...
now he's just another talking head...
My father told me a story from his boyhood in Florida of watching FDR on a moving train. One of his playmates remarked with disappointment, "He don't shine!".
Absolutely Biden started on the right path. And Harris was right to open the conversation on housing, which is a huge problem. What we really need is a Marshall Plan on housing. That would pump money into the economy and solve a crucial need that is pushing inflation. But the housing needs to be free of those algorithms that are pushing prices up. We need the free market to work and increased supply to push prices down.
hedge funding profiters are buying the available stock of homes to jack up rents
etc...
I think 2008 drove most of the small time speculation builders out of business. Another thing to think about is that in a few decades our population will start to decline. That will free up a lot of housing.
The state laws allowing auxiliary dwelling units may eventually help for low income people.
However, I read that 40% or more of the homeless are mentally ill. We need a variety of programs to support people with truly disabling conditions. No one wants to rent to a person who screams and curses at the zombies or lights up a can of gas because they're a robot and need gas to breathe.
blame ronnie raygun for dumping the needy from hospitals and housing
on to the streets...
That makes the homeless only a little higher than the general population.
The number in the gen pop w any disorder over the past year is 22%, while the lifetime rate is 33%.
Is it likely ppl under great stress might have more mental health problems?
BTW, it's worth noting that in the early 1990s, 6% of the population abused alcohol, and 2.5% abused other drugs.
https://pmc.ncbi.nlm.nih.gov/articles/PMC1403718/?page=3#supplementary-material1
That means 60 percent of homeless people are citizens who were failed by our government and can no longer afford homes. Maybe focus on them and not on the 40% that supposedly can't be helped because of mental illness.
Not necessarily. A similarly large percentage are addicted to drugs, with considerable overlap between those two pathological groups. For some, mental illness drove them to drugs, and others developed mental illnesses from their drug use.
Sorting these two populations off the streets through some kind of reimagined institutional care would help a lot. A lot of the old mental institutions were nightmarish, and we surely know a lot more about care and treatment now. But where is the will to go about it in effective but humane ways. I hear too much crude moral judgment and demands that they yank on their bootstraps, when it's plain that they have neither bootstraps nor the strength to pull them.
The crisis on our streets is an indictment of unresponsive government obsessed with capitalist striving at the expense of everything else. Musk is evidence that big money is thoroughly both out of control and increasingly in control of decisions that should depend on the consent of the governed.
Luigi is a murderer and a coward. He's also a hypocrite because he has his capitalist family supporting his legal effort. Dude, this is America. We like capitalism. The Marxist vile you are spouting has been tried and failed here many times over the last century. It's just talk, and it's anti-American. All it does now is cause us to lose elections. Obama was our "new FDR", but the Bernie crowd rejected his approach to progress because it's a lot easier to stand on the sidelines and bitch than to roll up your sleeves and fix the system from within (like Obama did). What we need is a new Obama.
In fact, Obama with his pathologically persistent "Republican Accommodation Syndrome" and neoliberal economics surrounded himself with finance and Wall Street ideologues (even though they called themselves Democrats) and had a destructive response to the Great Recession, bailing out the banks and Wall Street while unable or unwilling to bail out Main Street (5 million Americans lost their homes) which is still angry enough to elect Mr. Trump.
Even the ACA is a poor policy for health care. It essentially helps expand health insurance by using taxes to pay/subsidize commercial health insurance companies with no attention to system reform or cost control.
Democrats tried to pass national health insurance since Truman, and Obama got closer than anyone else. He deserves a lot of credit and all the destructive complaining only helps Republicans.
I agree the best approach was a Medicare for all approach.
Still we did get something better.
No exclusions for preexisting conditions.
Coverage for preventive care.
I think the participant costs for the plans are still too high. Especially when you think about Medicaid expansion as welfare for big corporations.
Whatever, typical brainwashed capitalist drivel. You have no idea what marxism is and I am not even a Marxist. I am a democratic socialist that wants universal healthcare and strong workers rights like every other modern cpuntry on Earth but ours. Its fucking embarrassing how poorly we take care of people in this country considering how rich we are. Its pure greed. The only reason America is still a third world country is because bootlickers like you would rather vote to give all our tax dollars to the rich than take care of your fellow citizens. What is wrong with you? Why do you hate your fellow citizens and wish them to suffer on behalf of the rich? Hope you lose everything in the coming depression Trump is planning. Obama bent the knee to wall street and bailed out the banks that crashed the global economy, he was no friend of the working class. Can't wait for the revolution, things will only get exponentially worse with assholes like Trump and his idiot supporters like you in charge.
What we need is a new Grant and Sherman, because that’s the only thing that will work against the Fourth Reich that is coming to power on Jan. 20.
Trump's overreach could genuinely trigger another civil war. Its not fun to think about.
I don’t find it enjoyable, either.
...Obama fixed the system from within? How? How is it fixed? What did Obama do to fix it? This is such a baffling thought to me that I genuinely need to hear it's justification.
Well, for starters, Obama won two elections. All this Bernie crap sounds good in comments on Substack posts, but it's just a bunch of words that sound good to a vocal minority of the public. Obama did the hard work of reaching out to voters, listening to them, and building trust. He knew that you couldn't change shit unless you had earned the power to do it. This is America. That's how democracy works. We had our revolution 250 years ago. We don't need another one. What we need are leaders who have the courage to jump in and get shit done.
While popularity is generally a prerequisite of changing a system (how else will people go along with your vision?), it's not a guarantee of action, and we saw little action from the Obama administration to legitimately reform the system. The guy had a filibuster-proof majority in the senate, and nothing fundamentally changed other than Healthcare (still through private insurers, of course, but now required to purchase! Can't piss off corporate america too much). Wall Street got a slap on the wrist for crashing the economy, bribery was made legal by the Supreme Court and he barely talked about it (as a beneficiary of that bribery himself...), and he talked a big game on global warming and then expanded our oil drilling and made us the number 1 oil producer in the world.
He ran as a change candidate in 2008, and was wildly popular for it. Contrast with 2012, and he was basically your average Democrat in terms of popularity (it's only been in the years since he's left office that we've gone back to deifying him.)
We need to go back to the person Obama promised us he would be.
ALLEGED murderer. He hasn't been found guilty yet, and we don't want to be guilty of mob sentencing.
The big (and many small) health insurance companies skate just to the legal side of outright fraud. For twenty-five years as a healthcare provider most of my grey hairs came from dealing with them. They're monsters, pure and simple. If I was a patient in agonizing pain trying to get treatment authorization. I'd definitely be rooting for Luigi.
I'm not sure he did it, which is why i want to stress 'alleged,' but I agree with your sentiment. So, either way, go Luigi go.
We need a new *us.* Assuming for a second we get some Great White Knight to save us pure-hearted maidens from twirly mustached villains, within a generation we'd be right back where we are now. The billionaires will be right back to cackling while sucking our blood. Also, I don't see rich men turning "class traitor" like FDR was accused of doing. It's all on us, and it's like the great Tina Turner sang "We don't need another hero."
This would assume the average voter knew what they were doing and what policies would actually benefit them and the nation. They famously don’t, at least not in a voting majority, or they don’t vote in their self interest if they did. I don’t think voters can really be relied on to get us from here to there, because they don’t know how to operate the vehicle.
This is well known. We’ve been relying on the Republic to save us, but its fatal flaw is that when we leave the driving up to a small number of legislators, it is very cheap to buy them and hijack the whole train. The entire political donor sphere is on the order of 1/1000th the size of the federal budget. The leverage is insane.
The only alternative is technocracy / the Deep State, but we just elected someone who wants to dismantle it wholesale, and make the entire apparatus a political function for sale at reasonable prices.
I expect there is a Nobel prize out there for the economist who wants to study the pricing models behind buying influence. It is the issue of our times.
Democracy is wildly imperfect, but it does act as a VETO. Without democracy you have to go to force of arms to change course. Most voters are ignorant, but they do have the ability to say...this sucks lets do something else.
Influence is certainly the issue of our times, but an economist doing Nobel-worthy work in the area would certainly expose the importance of influence on prestigious academic awards, and thereby self-disqualify.
I mean, the need is the need. We need to move in the correct direction and help ourselves. If we don't then we can't expect any one to step up. If we're not able to help ourselves for whatever reason, we're off to the proverbial glue factory.
Bernie and Elizabeth and AOC might have an idea...
In 1939, the unemployment rate was still 18%. The New Deal was a bit of a dud.
Takes years to overcome a shock as big as the great depression. You can't automatically snap your fingers and everything is magically better. Investing in infrastructure especially takes time. Only children and conservatives don't understand this.
That was at the end of the Dust Bowl, and down from the highest unemployment rate ever recorded (24.9% in 1933).
Would be interested in your thoughts on the effects on the post war economy of the release of pent up demand. We entered WWII after years of economic depression and it’s resultant low consumption rates, then during the war I’ve heard that consumer buying was also depressed (but other than food rationing I’m not sure why?) After the war it appears, when the GIs got home all that pent up demand and self-denial was let loose. Love your ‘column’ here. I feel like I’m learning so much. Thank you for making it free, at least for now, it helps.
There wasn't much to buy in the wartime years bc production of consumer goods switched to military goods. Can't consume what's not available.
But the civilian economy grew immensely during the war: houses, roads, infrastructure, were all built and millions of people earned far better wages than from before the war or even from before the depression.
The government spent money to build factories and employ workers.
Not sure where you’re getting your info about the war years. Able-bodied men of military age were mostly in the military; women filled many of their positions. But roads and cars had to wait for the postwar boom driven by unspent savings and enormous pent up demand. Resources went to war production. Moreover unspent earnings went into war bonds which boosted savings that postwar fueled consumption in the Truman and Eisenhower years.
Of course there was rationing and there were shortages, but people had food and shelter and saved money on top of that. There was still significant unemployment before the war and wages were mostly terrible. If you read about Kaiser's plants in CA, built on bulldozed agricultural land - workers poured in to get wages that were far in excess of the farm worker jobs that had been available. And the women got wages too - as did soldiers. I think Americans have forgotten how low the standard of living was during the depression and even before.
But none of that produced consumer goods. There was de facto rationing bc those items were not being produced
There was even de jure rationing. But there was a lot of civilian production
https://www.nps.gov/rori/learn/historyculture/living-on-the-home-front.htm
Like no new cars to buy, white goods. rationing of sugar.
Rationing of meat, butter, tires, much of it needed for the war effort feeding armies and civilians as far away as the USSR and China and much of it needed for our soldiers too.
People planted Victory gardens, saved bacon grease for bombs, kids held scrap drives for metals to recycling.
There was a lot more rationing than just for food. Think, for example, of automobiles and even tires. (The war effort needed the metals and rubbers for weapons-building.) Gasoline, shoes, etc. ... IOW, virtually everything. https://www.nationalww2museum.org/war/articles/rationing-during-wwii
A lot of the rationing and materials drives were superfluous. They were intended to give everyone a sense of community. If we're all in this together then we will all accept sacrifices. We forgot this lesson in VietNam, with negative consequences.
Of course WWII WAS different, so no 1:1 correspondence.
Jody, very good point. I'll be curious to see Paul's reply.
Pent up demand and women entering the labor force, with everything that it entails, maybe?
Also, while much of Europe and Asia were turned into rubbles, their industrial base was not, which helps explain the quick recovery after the war.
Lot of the Ruhr Valley in Germany their industrial base was bombed to smithereens. The Soviets had no compunction about leveling cities and towns they invaded. And the Nazis torched earth policy leaving the USSR and Eastern Europe was as bad or worse.
There was a lot of damage to their industrial base, but not as much as one would expect given how badly Germany was bombed. It isn't (or wasn't at the time) so easy to bomb away entire industries, since they didn't have precision bombing back then. During the war, the germans managed to resume production quickly after the bombings, which is remarkable considering how intense the bombing was.
Much of the Allied bombing was against German cities, which meant that the Germans managed to maintain a high level of war production until very late in the war. Hitler wanted to destroy the entire industrial base for Germany as the german forces withdrew, but his orders were not carried out in full.
According to some estimates, 75-80 % of German industrial capcacity was intact or repairable after the war.
Some sources:
https://cepr.org/voxeu/columns/recovery-and-reconstruction-europe-after-wwii
"Despite the scale of material damage, industrial equipment and plants survived the war remarkably intact. Even in Germany and Italy, the two main targets of Allied strategic bombing, industrial fixed capital grew by 20% and 30%, respectively, between 1936 and 1945. Power-generating capacity was also enlarged and needed little repair."
https://www.federalreserve.gov/pubs/feds/2001/200107/200107pap.pdf
"Although estimates of overall war-related capital destruction are inherently
imprecise and mask the unequal distribution across sectors { for example, German
heavy industry was particularly hard hit and Japan's shipping fleet was devastated -
a reasonable estimate is that about 20 to 25 percent of Germany's and Japan's capital stocks were destroyed or dismantled."
https://link.springer.com/article/10.1007/s10887-024-09242-2
"The air operations inflicted heavy damage on German cities, infrastructure, and industrial centers, destroying about 20% of the German industrial capital and residential housing stock (Albers, 1989)."
To add to this….the social component. During the Depression, individualism didn’t work; we needed community to live and survive and many built it. Same during WW2. Being in a community with rations would help one fair better than being alone. Community was necessary. Add to that how FDR had a Democratic Congress the whole time. That helped.
But in the end, community was valued. I wonder if that sense of community and interdependence made the economy so successful…..everyone cared about each other and created policies and practices to support it.
This is just another way of saying that civilization is good or we'd still be troglodytes
As I mentioned in my post somewhere in here, the end of WWII unleashed the huge pent up demand and war savings (which you have to discount for inflation.) More importantly, there had been dramatic technological advances made during the war and, more than most appreciate, during the Depression.
Paul, I’ve been a fan of your work for years. It’s great to see you unshackled from The NY Times. I will become one of your paid subscribers for sure.
Agree completely!
I am very happy that I can continue to read your thoughtful analyses even in far off Australia. There is intelligent life in the USA!
I tried talking with Trumpsters in 2016 and 2024.
I'd rather talk to a dog.
Dogs don't get up in your face if they don't understand. Dogs don't carry giant chips on their shoulders. Dogs don't think the world owes them a living.
Dogs take responsibility.They don't blame others.
Dogs learn.
"Dogs learn." I think this is the most important point. MAGAts have a block against learning anything - no matter the proof provided - that goes against what they are told by Cheeto and Fox and other RW sources. According to them, it's lies, fake news, propaganda from the Deep State, etc. Ironic and an example of projection on a national scale since the Republican party, as now constituted, is built completely on (as someone said in "Elf"), a "throne of lies."
Bernie bros acted the same way.
This is a lie.
I saw it. In person.
liars always double down.
As you are doing.
parrot
A 'follow the money' approach is where I begin which is to say economics but social and cultural factors can take over. And they can take over when they're out of sync with laissez-faire which isn't a doctrine or theory but its abdication since the effects of 'leave it alone' depend a lot on where you start out. Where did we start out? Having a lot of Europeans turned loose on a continent of unexploited natural resources, a hugely distorted environment.
This isn't a model. It was a one-off.
We've been living in a bubble from the start. The American economy is a frat party. Somebody else pays the bills and we've been drunk the whole time and still are, taking massive energy subsidies for granted. And now we've elected frat boys to run everything, and Bluto as president. Drink until you die, never grow up and let someone else clean up. This certainly became the national ethos with Bush. Screw it up, call daddy. You can rely on the old man's money.
More friction would have been good. Pushback from the parents. Junior can't have another car after crashing the Cadillac. Too little friction is a distortion that has to be counteracted. With trade, for example. So it's about balance, which is a hard political sell. Comparative advantage makes sense on paper but it's not a reflection of cultural and political reality. Free trade is good, up to a point. In our case a typically puritanical, all-or-nothing approach won.
A bad idea.
But even then workers, who we knew were going to get ravaged, could have been protected. They should have gotten Scandinavian levels of social benefits. We could have afforded it. But, this is America, and that is 'communism,' so the rich took it all. Now, in their infinite greed, they're plundering the past, liquidating physical and social capital. Human (our) lives are on the table, which isn't as new as we'd like to think. And they're plundering the future.
Comparative disadvantage rules at the polls. A politics of vengeance and retribution.
Citizens with grudges (I wonder why, maybe a lack of social welfare) are voting against their interests because people they don't like, notably minorities, are hurt worse. Prejudice isn't only bad morality it's bad economics. Same thing true of society as your stocks, if you have some -- diversity is stability. Republicans learned in '08, though, that they had such complete control they could get the society, otherwise known as the suckers, to pay for their mistakes.
So we're back at the frat party and boom and bust. Go, Bluto-baby! Drill, baby, drill! This is so sick it's hard to see, but good economic practice is getting dragged around by the hair stone-age style.
Bluto was funny, Trump is not.
Brilliant point: “ Things demand a lot on where you start” — the fact America was a cosmically wealthy mother lode of natural sources.
Robber barons and robber bullies (#TraitortRump) [ never refer to a monster with a deferential title: look up “ mere exposure effect” ] have bullying and lapping up the lucre for a WHILE.
But so was Argentina.
Things DEPEND
America is not Sweden, which is barely as big as Michigan and, until very recently, culturally homogeneous. As Joseph Schumpeter observed, “. . . . it is absurd for other nations to try to copy Swedish examples; the only effective way of doing so would be to import the Swedes and put them in charge.”
Couldn't agree more Dr. Krugman: I've always responded to "the war got us out of the Depression, not the New Deal" argument by pointing out that this argument actually only AFFIRMS the New Deal. After all, what was the New Deal if nothing less than an effort by government to stimulate economic growth and full employment through public spending and investment? And if that's what The New Deal was, what was WWII? It was (among a lot of other things such as a life and death struggle to defeat fascism) yet another example of the same thing -- government spending and investment that stimulated economic growth and full employment. When seen is this light, the war was NOT an alternative to the New Deal, but rather the largest public works program in US History: In short, an EXTENSION of the New Deal that only affirmed the Keynesian model implemented in 1933. Dwight D. Eisenhower -- a Republican no less -- also seems to have tacitly understood this when he threw his support behind The Federal Highway Act. Oh, and in the meantime we also happened to have strong unions, high marginal tax rates, government oversight of the free market, and high federal spending, while simultaneously the economy grew by leaps and bounds, tax receipts increased, the rich still got a lot richer, and debt as a percentage of GDP came down year after year. Granted, not everyone benefited from this postwar boom: there were pockets of poverty across the nation, Jim Crow persisted in the South, and racism continued to stand in the way of opportunity for millions of Americans from coast to coast. Nevertheless, for much of the middle class, life was better than it had ever been.
Hmmm, ....Maybe government isn't always the problem: maybe it's actually, from time to time, the solution!
No one has shown that the Keynesian model does not work because it does and it is even very logical and very straight forward.
Thus, even as a republican, Eisenhower was operating under common knowledge and economic reality.
Most GOP and Dems used to agree on basic facts but simply differed in views of the degree and size of government and how long the bootstraps needed to be to help the poor and how secure the economic safety belts needed to be - that was about it post WWII and post GD, from what I can tell. Sure, there have always been ideological fringes, but no so mainstream.
The lack of regulations that allowed the bubble and bust crash in 1929 and that allowed the Great Depression loomed large in people's minds for quite awhile, I think.
Then Reagan (and also the Ayn Rand cult) came along with all of that nonsense and since he was a popular figure for the GOP, that had been decimated by Nixon's Watergate scandal, the GOP attempted to shove these Reagan based square pegs of ideology into the round holes of reality by "whittling away" facts and the truth.
They also did it as a way to justify tax cuts for wealthy donors.
Keynesian economics is so straightforward and logical, that anything other than Keynesian is like saying the world is flat, but that is what the GOP exclusively do, post Reagan.
In fact, in order to make the square pegs seem to fit, they had to create a whole 'nuther universe by creating right-wing media bubbles so that others may be less able to point out all of what should be obvious nonsense. Their base now does not even believe in objective reality or facts anymore.
Heck "We are all Keynesians now" is attributed to Richard Nixon. It's only when Reagan fooled enough people that the Plutocrats revenge began.
I have a relative that worked on highway projects to help pay for college. He will never admit the scaffolding that was erected by the previous WW2 generation that allowed him to prosper. Nope, government spending is always the problem.
The book on US industrialization during WW2 is very interestng
https://www.barnesandnoble.com/w/freedoms-forge-arthur-herman/1106725548
The author is a hardcore libertarian but the story he tells is a massive verification of Keynes. The government built the foundations of post war prosperity.
The other thing that happened was a huge capital investment during the war that upgraded manufacturing quality and efficiency and also created a huge excess manufacturing capability. Postwar consumers found things like aluminum fishing boats and kitchen utensils at affordable prices. Dreams of having things like a luxury automobile were no longer dreams for the middle classes. The process upgrades also made exports more attractive. There was also a problem in that those war investments weren’t repeated each decade and lots of US heavy industry fell behind so that by the 80’s it made sense to outsource labor intensive processes either to suppliers who had upgraded or had low cost labor; many of those were foreign. Hopefully things like the Chips Act can provide a similar benefit but from a policy standpoint what is needed is a carrot and stick method of encouraging capital reinvestment to replace greedy earnings distributions like stock buybacks.
In 1939, the US unemployment was still 18%. Not a ringing endorsement of the New Deal.
By the end of the new deals, most economic metrics were back to normal and unemployment had been cut in half.
This is not surprising since employment is a lagging indicator.
The ramp up for the war helped to seal the deal, but even war production is a government fueled stimulus hiring people to make things that often have a limited useful life, like bombs. Make it and then blow it up.
Fortunately the industrial capacity was built. We kept feeding the cold war beast for decades and this includes Reagan.
So when some like to say, but wait, wasn't it the war... Is that really any different?
It is still the government and government jobs.
The point is that these paychecks are spent in businesses, and when the government spends, this becomes paychecks, as well and the cycle repeats as the money then flows upward as profits and incomes and is taxed to be put right back in the economy again. So, as long as not too much money goes to the top landing in passive non-GDP investments that so not create new jobs and growth in GDP.
This money at the top passive investment issue is why the GOP rarely seem much from their tax cuts, if aimed at the top.
The more money put to work at the bottom, often the better. R&D and education work well too.
Keep the dollars moving generating economic activity.
Wasn't it 40%+ during the Depression? Cutting it in half ain't something to sneeze at. Before war production increases.
Dr. Krugman did not even mention where the Marshall Plan fit into the post war economic picture. I wonder if he has any thoughts about that?
The Marshall plan ended in 1952. It was important to help Western Europe recover, but not to the us economy. As Paul noted, we hardly exported anything in the 1950s.
The Marshall Plan itself ended in 1952, but was preceded and succeeded by other economic recovery plans.
https://en.wikipedia.org/wiki/Marshall_Plan
"During the four years that the plan was in effect, the United States donated $17 billion (equivalent to $240.95 billion in 2023) in economic and technical assistance to help the recovery of the European countries that joined the Organisation for European Economic Co-operation. The $17 billion was in the context of a US GDP of $258 billion in 1948, and on top of $17 billion in American aid to Europe between the end of the war and the start of the plan that is counted separately from the Marshall Plan. The Marshall Plan was replaced by the Mutual Security Plan at the end of 1951; that new plan gave away about $7.5 billion annually until 1961 when it was replaced by another program."
I was wondering that as well. Did the Marshall Plan numbers count as trade? How much of the Marshall Plan flowed back to the USA in terms of purchases OR were the purchases resulting from the Marshall Plan made to European firms?
No, the Marshall plan numbers are counted as government expenditures (not trade).
Government buys goods from domestic producers and then gives them to war torn countries.
I wondered about that too, so I mentioned it above, but then he also mentions that in the Eisenhower era, there was not a great deal of foreign trade with Europe, relatively speaking, so maybe that is why he does not get into it.
Paul, Occam's Razor is often the best explanation for a situation and you have nailed it on this trade issue. The reason for the growth of the middle class post WWII through the 70s is due to the same basic facts - recall seening a car with bad shock absorbers bouncing down the road. We call that a highly underdamped suspension. Ever ride a buckboard? That's severely overdamped. The 50s thru the 70s were the result of a properly "dampened" economic system. High marginal tax rates didn't raise a whole lot more for the fed because nobody in their right mind would write a check for 94% (reduced to 70% by 1980) of 'excess income' to the feds. Both personal and corporate income taxes were progressive. Corporate retained earning were limited by tax policy to prohibit growth of corporations to monopolostic power, resulting in livable dividend distribution to shareholders and wages to the poeople who actually did the work, not just the CEOs and boated management. Anti-monopoly laws were enforced, notably breaking up giants like AT&T, resulting in more jobs, better technology, higher personal incomes and lower prices for consumers. Glass-Steagall kept banks from gambling with our hard earned bank deposits, deposits which grew with reasonable interest based on banks serving the community's growth, not gambling in the stock market. The period from 1945 thru 1980 was a 'well damped' period in our economy, cruising pretty smoothly, not bouncing out of control, down through decades of growth, using financial rules that made sense, rules that still do, rules that answered the question "OK, how much is too much?" and served the principle of equality promised by our Constitution. We need to fall back to a rules based economy. Economic activity is a game. Games have rules. No rules, no game.
I think you completely misunderstand the banking industry. You are not alone. No neo Keynesian economist understands it either.
https://charles72f.substack.com/p/basel-faulty-the-financial-crisis
That's very debatable argument. For example, Glass-Steagall didn't prevent bank gambling at all - it just prevented banks from selling securities. The S&L collapse had nothing to do with Glass-Steagall, neither did the massive Continental bank failure. Tax rates of 90% or 70% were _marginal_ rates and post deduction - so high earners still were able to get a lot of money. More to the point, the already wealthy kept their wealth and grew it. Timothy Mellon, who was one of Trump's megadonors is the grandson of Andrew Mellon and hat $200million to give Trump without seriously dipping into his inherited wealth. Trump's awful father accumulated hundreds of millions prior to the 1980s. Corporate retained earnings were enormous. Economies are not static - all the concentration of wealth we see in our era grew out of the process that people are now trying to pretend was rational and egalitarian. JFKs first speech to the US senate in 1952 was a complaint about how Federal government policies were crushing unions and hollowing out the manufacturing base of northern states.
The GOP love the "only game in town" myth as a way to excuse the post WWII boom.
They want to ignore the success of that era, because it showed that our success came with unions, the GI Bill, SS, R&D, space race, and a large middle class that drove the economy and expanded it in an era post industrialist robber baron and when the tax rate on the wealthiest was very high.
It showed the wealthy few were fairly irrelevant to our success.
What they ignore with their "only game in town" theory, is that our trading partners would have to be able to buy our goods in order for this theory to work. They would need economies not so decimated by war that they have something to trade with, people with incomes and governments with revenue.
No one can succeed by being the only game in town. Who would buy your stuff?
Thus, the Marshall Plan, which was in a sense a stimulus for the USA as much as it was for Europe.
Once again, government saved the day.
Then as Krugman, the trade expert points out, there was not a great deal of foreign trade at the time, regardless, and most was with Canada and Mexico.
This means that a lot of our growth success was internal, so once again, the growing middle class from the GI Bill (education and home loans) and unions, and yes, even government spending on the SS, the R&D from the space race, and yes, even the cold war MIC.
Capitalism is a great mechanism, but it does not work all by itself and is not perfect. Government can keep it running and on the rails by not allowing monopolies or the creation of bubbles that pop and by establishing min wages and good labor laws, regulations, etc. We have seen the nightmares that can happen when regulations are removed or not implemented soon enough with the great recession and Great Depression, etc. Too big to fail does not work. A "hands off approach" does not work.
Sadly, Trump's tariff plan may cause a global recession and GOP plans for more deregulation may usher in even more nightmares.
The weirdest thing about “Make America Great Again” is that it sounded originally like the thing it wanted to bring back was the great economy of the 1950s and 1960s, which was the golden age for so many of the “rust belt” onetime union strongholds that have gone heavily for Trump; but of course, that was also the heyday of Democrats and unions. Now we hear that Trump thinks of American “Greatness” in terms of the Gilded Age, which is crazy for a “populist” given that it puts him on the opposite side from the actual, historical populists who despised the robber barons Trump seeks to emulate. The postwar boom was really peak middle class prosperity; the Gilded Age was when most of our ancestors (the American working class) were fighting for scraps.
The Gilded Age was also when the Republicans sold out reconstruction to be replaced by Jim Crow. Trump is heading the US toward a Jim Crow for all of the poor.
America invested in physical and human capital after WW2 - in highways and university education at public expense of its returning soldiers. Indeed steep progressive taxation helped create a more equal society, but public investment was also part of the policy mix.
First time here. This is looking like a very interestng discussion. I've been meaning to open Paul's lettr for months now.
Thought provoking !! More on the macroeconomic role of income inequality, please.
I can tell you from my perch: rent to a large, corporate-owned apt complex consumes my entire pension ( which money obviously gots to wealthy holders or REIT) and I’m still working in late 60s. It’s a very VERY basic cybernetic principal:
All organisms organic and economic work to perpetuate and grow themselves.
#WealthTaxNow , direct redistribution, stop the excuses: how can transferring money from the rich to the poor NOT transfer money from the rich to the poor? Listening to neoliberals discussing why that won’t work is rare—because the subject is EVER EVEN BROUGHT UP. THAT’S the ultimate debating technique. //
Yes, when there are shortages of absolute necessities, like housing, and when so much is corporate owned, it means that prices can rise to where it sucks up most all of a paycheck and that is what the "market will bear" under such conditions.
This takes money away from other aspects of our economy and businesses and is very restrictive. I think it is a big danger to our economy.
I do not think a wealth tax would fix this, but I think government needs to get involved to create serious disincentives for this and incentives to build new.
When consumers no longer have a choice under shortage conditions like this, this causes free market forces to not be able to work to set prices and we need government intervention.
The government also needs to build a ton of senior housing, as well.
Yes! And more on how the monopolies, duopolies, oligopolies in every single industry are squeezing the 99% with higher consumer prices and lower worker wages.
Similar to how the Hoover Institute had to retract its report on Fast Food job losses. The opposite is true, California added jobs when they went to $20 and hour minimum wage. Republicans are wrong a lot when it comes to the economy.
It’s almost like people don’t want to work jobs they can’t make a living on. Hmmmm….
First of all my ideology is that I am a hold-my-nose Democrat. I almost always vote for the Democrat in state and national elections because they are not as bad as the Republicans.
Back to the issue at hand.
Where did the machinery and materials to rebuild Europe and Japan come from if not from the US? Where did the food to feed them come from at first?
The people of the US had gone through a depression then a war with full employment and a lot of saving at home because there was nothing to buy. When those guys came home they were ready to move on with life and they spent like the drunken sailors they had sometimes been. The domestic economy roared as the white men and their new families were denied nothing. Income and sales taxes paid the way, no tariffs needed.
Please continue to show me I am wrong.
If I understand your thesis correctly — it may be missing — Mr Krugman already showed where you were wrong by pointing out that the post WWII boom could not have been because of exports, because exports were too small, a very tiny fraction of the economy. It just wasn’t big enough to produce that level of effect.
Yes that was hos point that they had the material in Europe to source it
This is why I love your column. Its like auditing an upper level econ class at college. I was one of the commenters yesterday who said that the postwar boom was because of having no competition.
One question: Because the US didn't behave like the historical "victor" after the war (Marshall Plan, massive rebuilding money for Japan, etc), is the calculus any different? We spent a lot of money getting the world back in its feet after all.
The "pent up demand" answer makes the most sense to me, along with the massive industrial capacity we had from the war build up. That additional capacity probably let us avoid the inflation spiral that usually results from massive demand.
Yes, pent up demand combined with the GI bill for education and housing and good union wages. Workers had more to spend fulfilling those demands as a result = economic activity = GDP.
Pete Rodriguez, did you really say, ..."finely balanced socialist/capitalist model employed by the American democratic system of government...achieving economic success"? Our record of poverty and its results in homelessness, underemployment, hunger, and lack of health care for too many of our people is not economic success.
Interestingly, when the rich actually paid progressive tax rates, we had a much better social safety net. Homelessness exploded because cash benefits for disabled people and impoverished single-parent families no longer actually brought people to the Federal Poverty Level. This transfer income had been sufficient for most of the basic necessities of life: housing, food, clothing. Fast forward to the growing lack of tax income to support this expenditure which resulted in frozen benefits for a quarter century. I watched the impact of this conversion of federally-funded entitlement funding into block granting. Today, family cash supports (aka rent money) in many states bring families only to 10% of FPL. “Generous” states like mine are closer to 30% FPL. Families now spend up to 80% of household income on housing, and it only takes one episode of bad luck or bad judgment for them to become homeless. We MUST tax the rich to make any progress in preventing or resolving homelessness. Which requires preventing or resolving those oligarchs’ control of elections and corrupting elected representatives and judges.
Thanks, Marge - the necessary policy steps you call for depend on our ability to convince majorities of voters in municipalities and states as well as in Federal elections. Trump didn't win a majority of voters this time, and we have the opportunity to elect better public servants in the next years, but supportable candidates need to find the right way to express these realities.
And we need the taxes from the oligarchs to pay for it. “Welfare” has not been a priority for either party, but if the federal budget was sufficient…..
To Someone working at the level of Nobel/Times analyst, the impossibility of actually grasping life as a clerk in Pizza Hut trying to save up $3000 to move into an apt to which he will pay 70% of his income is impossible.
It’s impossible to imagine shit that bad, with no end in sight.