The New Deal did this for everything without even the pretense of bird flu, bc it was explicitly premised on the idea that raising prices in recession would stimulate spending (Keynesians then & now believe the opposite btw—ie that inflation in recessions is good precisely bc it reduces real prices which stimulates current spending at the expense of current savings in ways that may pull us out of unproductive spirals—but FDR was just crazy).
For example, in 1933 alone, the Agricultural Adjustment Act paid farmers to bury 10 million acres of cotton, & to slaughter 6 million pigs & let them rot. Millions in cities were going hungry, & millions of farms were going under, & the govt thought that paying farmers to go under even more would somehow fix things.
That’s why from 1929 to 1939—while the federal budget fully tripled, & the federal debt as a percent of GDP increased fully 2.5 times—GDP fell more than 10%, the Dow Jones (the main stock index) fell more than 60%, & the number of unemployed grew more than sixfold. & things were just getting worse: from 1937 to 1938, industrial production fell by 30%, & unemployment doubled to 20%, thanks to the second round of New Deal programs, after the first round was mostly overturned. US WWII production was incredibly productive, but operated on completely opposite principles.
Other examples of New Deal programs:
-FDR banned competition on quantity & price while the production we had was too little & too costly. A New Jersey tailor was jailed for charging 35 cents to press a suit instead of the govt-mandated 40 cents. A New York baker was jailed for working night shifts. Butchers were fined for letting customers pick their own chickens. Shops that didn’t display FDR’s “blue eagle” faced harassment, vigilantism, & raids.
-FDR’s NIRA managed the wages, prices, hours, quantities, & qualities of production for 80% of non-agricultural workers, & raised their labor costs by 25% on average in 1933, on the theory that massively suppressing competition & imposing massive raises in the midst of extreme unemployment & collapse would somehow get more people hired.
-NIRA was overturned but other things like the 1937 Wagner Act replaced it, & so from 1937 to 1938 the unemployment rate doubled to 20% & industrial production collapsed by 30% while wages were by fiat 50% higher than when FDR took office.
-From 1929 to 1939 taxes doubled overall, the top corporate income tax rate doubled (& an additional 6% tax on “excess profits” was added in to start singling out especially productive companies for ill-treatment, as well as a new corporate wealth tax), the top income tax rate rose from 25% to 79%, payroll taxes were introduced, excise taxes were increased & expanded, etc.
-FDR’s Revenue Act of 1936 imposed a tax on retained corporate earnings, in addition to the overall tax on corporate earnings. So even tho corporations were paying more in ordinary taxes on their net income (the top bracket’s rate doubled, & the lowest bracket increased from 0 to ~13%)—& were paying new taxes on their “excess profits” & on their capital stock—they also now owed additional taxes of up to 27% on any net income they reinvested in their businesses! The theory was that this would force them to pay out profits as dividends rather than reinvesting, & that this would induce ordinary spending, which would somehow stimulate investment more than incentivizing investment would. But actually these huge disincentives toward business investment caused business investment to fall 85% from 1936 to 1937. This is what Biden & Warren & Kamala wanted for tech.
-The WPA spent 3.5% of GDP in 1935 on everything from puppet shows about venereal disease to sidewalks in empty fields that led nowhere. It paid accordion players to show up at random post offices without being requested, & it paid writers (usually communists) to travel the country recording eg local ghost stories. News reports from the time described certain WPA jobs as moving leaf piles back & forth, counting squirrels in parks, digging then refilling holes, etc. FDR’s Labor Secretary admitted that the WPA was riddled with waste. FDR’s Treasury Secretary admitted that the New Deal was a complete waste: “We are spending more than we have ever spent before & it does not work… We have just as much unemployment as when we started… & an enormous debt to boot!” FDR’s WPA head (& later live-in right-hand-man) said: “We shall tax & tax, & spend & spend, & elect & elect.”
Then we suddenly did the opposite of all this for our WWII arms production, & saw an incredible industrial boom. Big changes can happen fast!
For example, in 1933 alone, the Agricultural Adjustment Act paid farmers to bury 10 million acres of cotton, & to slaughter 6 million pigs & let them rot. Millions in cities were going hungry, & millions of farms were going under, & the govt thought that paying farmers to go under even more would somehow fix things.
That’s why from 1929 to 1939—while the federal budget fully tripled, & the federal debt as a percent of GDP increased fully 2.5 times—GDP fell more than 10%, the Dow Jones (the main stock index) fell more than 60%, & the number of unemployed grew more than sixfold. & things were just getting worse: from 1937 to 1938, industrial production fell by 30%, & unemployment doubled to 20%, thanks to the second round of New Deal programs, after the first round was mostly overturned. US WWII production was incredibly productive, but operated on completely opposite principles.
Other examples of New Deal programs:
-FDR banned competition on quantity & price while the production we had was too little & too costly. A New Jersey tailor was jailed for charging 35 cents to press a suit instead of the govt-mandated 40 cents. A New York baker was jailed for working night shifts. Butchers were fined for letting customers pick their own chickens. Shops that didn’t display FDR’s “blue eagle” faced harassment, vigilantism, & raids.
-FDR’s NIRA managed the wages, prices, hours, quantities, & qualities of production for 80% of non-agricultural workers, & raised their labor costs by 25% on average in 1933, on the theory that massively suppressing competition & imposing massive raises in the midst of extreme unemployment & collapse would somehow get more people hired.
-NIRA was overturned but other things like the 1937 Wagner Act replaced it, & so from 1937 to 1938 the unemployment rate doubled to 20% & industrial production collapsed by 30% while wages were by fiat 50% higher than when FDR took office.
-From 1929 to 1939 taxes doubled overall, the top corporate income tax rate doubled (& an additional 6% tax on “excess profits” was added in to start singling out especially productive companies for ill-treatment, as well as a new corporate wealth tax), the top income tax rate rose from 25% to 79%, payroll taxes were introduced, excise taxes were increased & expanded, etc.
-FDR’s Revenue Act of 1936 imposed a tax on retained corporate earnings, in addition to the overall tax on corporate earnings. So even tho corporations were paying more in ordinary taxes on their net income (the top bracket’s rate doubled, & the lowest bracket increased from 0 to ~13%)—& were paying new taxes on their “excess profits” & on their capital stock—they also now owed additional taxes of up to 27% on any net income they reinvested in their businesses! The theory was that this would force them to pay out profits as dividends rather than reinvesting, & that this would induce ordinary spending, which would somehow stimulate investment more than incentivizing investment would. But actually these huge disincentives toward business investment caused business investment to fall 85% from 1936 to 1937. This is what Biden & Warren & Kamala wanted for tech.
-The WPA spent 3.5% of GDP in 1935 on everything from puppet shows about venereal disease to sidewalks in empty fields that led nowhere. It paid accordion players to show up at random post offices without being requested, & it paid writers (usually communists) to travel the country recording eg local ghost stories. News reports from the time described certain WPA jobs as moving leaf piles back & forth, counting squirrels in parks, digging then refilling holes, etc. FDR’s Labor Secretary admitted that the WPA was riddled with waste. FDR’s Treasury Secretary admitted that the New Deal was a complete waste: “We are spending more than we have ever spent before & it does not work… We have just as much unemployment as when we started… & an enormous debt to boot!” FDR’s WPA head (& later live-in right-hand-man) said: “We shall tax & tax, & spend & spend, & elect & elect.”
Then we suddenly did the opposite of all this for our WWII arms production, & saw an incredible industrial boom. Big changes can happen fast!
If the Keynes bit above confuses you, that’s because Keynes is pretty confusing, & most people’s understanding of him is pretty confused. The only element of the New Deal he really liked was the dollar devaluation, & he knew that was basically an accident
https://x.com/CEBKCEBKCEBK/status/1844210819036492153
Old Progs vs New Progs is kinda like Keynes vs FDR: “the downturn is bc frictions have pushed real wages too high, bc labor’s a lot stickier than capital, so we’re producing too little” vs FDR’s “push real wages higher & punish capital & limit production”
https://x.com/CEBKCEBKCEBK/status/1890649882194550967
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