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Originally Posted by Boreas
When did Roosevelt take office? What happened to the employment rate subsequently? Same for GDP.
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1933. It was reduced, but stayed on the in the 15% range until 1940, well above the historical average of approximately 6%.
Here's the key paragraph relative to GDP:
"The rise in GDP after 1933 was not sufficient to drop the unemployment rate from depression levels because while the GDP was growing the labor force also was growing. Furthermore increases in productivity meant that for the same level of GDP there were fewer jobs. In order to bring down the unemployment rate the rate of growth of GDP has to be greater than the sum of the growth rates of productivity and the labor force. Thus if there is a period in which the rate of growth of GDP is less than the sum of the rates of growth of the labor force and labor productivity then there is a near-permanent rise in the unemployment rate. Only if there is some extraordinary increase in aggregate demand will the accumulated pool of unemployment be absorbed."
We're seeing much the same today. Business owners, due to uncertainty, are increasing their productivity. The upward summer blip in the stock market can likely be explained due to the fact that the balance sheets and productivity stats from many publicly traded companies improved versus last year. Improving productivity while lowering expenses - with payroll as the number one controllable expense item for any company - will provide a rosy financial picture to Wall Street, but its not indicative of growth.
Quote:
Originally Posted by Boreas
Then as now, Conservatives blame Democratic policies for creating hesitancy in the investor class. It's more likely in my view that investors were simply hesitant to "get back on the horse" that had bucked them off so rudely in 1929. Also, it's important to remember that, then as now, the policies of successive Republican administrations had sown the seeds of disaster for the economy but, then as now, Republicans did their damnedest to obstruct the Roosevelt Administrations efforts for reform and recovery through the new deal. Had it not been for that, Roosevelt's policies would have been implemented sooner and the recovery would have proceeded more rapidly.
John
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Frankly, I can't really tell the difference between Rupublicans and Democrats anymore. The moniker that some use - "Republicrats" to me seems pretty appropriate.
As far as blaming the Republicans for stalling Roosevelt, this is specious, IMHO. Then as now, particularly for "New Deal II", the President had opposition to key legislation from within his own party. The Democratic party held the majority in Congress at that time, as well as holding the White House for seven out of nine Presidential terms from 1933-69. Republicans were certainly a source of opposition during that time, but Roosevelt was also not shy about campaigning against anti-New Deal Democrats.