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Post by AztecWilliam on Jul 12, 2010 12:03:50 GMT -8
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Post by AztecWilliam on Jul 12, 2010 12:21:48 GMT -8
I always read the comments that follow articles and I urge you to do the same. In this case, one of the comments is by the author himself. What is interesting here is the fact that industry was able to retool (this was called "reconversion" in those days) for civilian production rather quickly. It did not take a meddlesome government to lead the way. And that even though the Democrats controlled Congress until January, 1947, and the presidency until January 1953! But, then, this isn't your grandfather's Democratic Party anymore!  Comment by Richard W. Fulmer on 7 November 2009:
GDP dipped slightly in 1946, but rose sharply in 1947:
Year GDP*
—- —–
1944 219.8
1945 223.0
1946 222.2
1947 244.1
1948 269.1
1949 267.2
1950 293.7
* Billions of current dollars
www.bea.gov
This is consistent with a mild, brief recession. Post-war retooling was obviously necessary; capital equipment is not fungible, and machinery used to build Sherman tanks won’t knit nylons. But the restructuring must have been extremely fast. This is not surprising given the post-war business environment. Taxes and tariffs had been slashed, and the government was no longer threatening to confiscate businesses or profits nor was it whipsawing the economy with endless experimentation. In addition, industry was not hindered, as it is now, by seas of regulatory red tape that delayed or prevented construction projects.
Personal savings must have been high since industry had been pumping out munitions rather than consumer goods for at least the previous five years. Interest rates would therefore have been low, making investment capital easily available. At the same time, businesses had every incentive to invest. High savings implied real consumer demand, and low taxes meant that any profits made could be (largely) retained.
Contrast the U.S.’s post-war experience with the situations following the 1929 crash and the bursting of the Japanese real estate bubble in 1990. Rather than allowing markets to shift resources, the respective governments worked feverishly to maintain the status quo. So, instead of quick recoveries, both countries experienced years of stasis.For what it's worth, you will notice from the chart cited by Fulmer that U.S. GDP went up 31% between 1945 and 1950. And, in case you don't know it, that was a time when defense spending was severely cut back. (Examples: Toward the end of the war, we were building close to 100,000 planes a year. In 1946, the U.S. military purchased at most a couple of thousand planes. Many warships not completed were scrapped and many others ordered were canceled. Huge reductions in the number of army divisions were made. You get the idea. Yet, with all that reduction in government military spending, the economy grew rapidly. Something to think about.) AzWm |
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Post by aztecwin on Jul 12, 2010 12:22:54 GMT -8
I also notice that it is not only economic activity that matters, but what is the character of the products. Keynesian thought is and always has been wrong.
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Post by The Great Aztec Joe on Jul 19, 2010 8:19:30 GMT -8
I also notice that it is not only economic activity that matters, but what is the character of the products. Keynesian thought is and always has been wrong. Keynesian thought has been right on many an occasion. The only problem is that it is wrong, too. As I tell people, economics is not a science. None of the broad theories work all of the time. Never have and never will. |
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Post by aztec70 on Jul 24, 2010 9:44:05 GMT -8
The important issue here is that the Aztecs are going to kick his alma mater's butt in football this Fall.  |
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Post by The Great Aztec Joe on Jul 24, 2010 10:12:10 GMT -8
The important issue here is that the Aztecs are going to kick his alma mater's butt in football this Fall. Since I do not know where everybody went to school, to which school and to whom are you referring? |
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Post by aztec70 on Jul 24, 2010 11:37:26 GMT -8
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Post by The Great Aztec Joe on Jul 29, 2010 12:00:20 GMT -8
The Depression ended long before the war started. As it was, we had a recession about the time things were ready to break loose in Europe. Those Poles were just agitating for a conflict, and the got one from Hitler.
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