No Great Depression, Run The Table.

Regarding the map . . . Argentina, which I think had right-wing governments, declared war against Germany and Japan something like one month before the end of the war. Spain under Franco described itself as a non-neutral, non-belligerent. And with Ethiopia being invaded by Italy around 1935(?), I'm not sure it's entirely illuminating just painting it as an Axis country.

And in general, I'm just not all that impressed with wikipedia. If there's certain areas where you think its approach works particularly well, I'm happy to listen. But overall, it might be an area where we need to agree to disagree.
 
Benjamin Strong doesn't suffer a TB relapse in 1928. He survives to recover fully from his surgery, keeping someone with at least some conception of the harms of monetary policy driven deflation at the helm. The fallout from the Fed's pricking of the credit bubble in 1928 is handled more masterfully. Without the economic distress that existed at the time IOTL, Smoot-Hawley is more of what it was originally going to be: an agricultural protection bill. Because of this, the trade war that happened IOTL in 1930 doesn't occur.

By 1931 or so, the US is in the midst of another strong upward cycle, after some uncertainty and slow growth in 1929 and 1930.

Summary: The Fed actually does the job it was created for in 1929, stopping the downswing that occurred as a result of its raising its discount rate in '28 by expanding in '29 or '30.
 
Okay, maybe certain American newspapers in the six months after the stock market crash play above their game and do a good job explaining Keynesian economics, which is counter-intuitive in some ways. But if sportswriters can explain the whole moneyball approach in baseball, seems like this can be explained, too. And it's not talking down to your readers. It's taking them along as you yourself learn.
 
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Okay, maybe certain American newspapers in the six months after the stock market crash play above their game and do a good job explaining Keynesian economics, which is counter-intuitive in some ways. But if sportswriters can explain the whole moneyball approach in baseball, seems like this can be explained, too. And it's not talking down to your readers. It's taking your readers along as you yourself learn.

The General Theory wasn't published until 1936.
 
Regarding the map . . . Argentina, which I think had right-wing governments, declared war against Germany and Japan something like one month before the end of the war. Spain under Franco described itself as a non-neutral, non-belligerent. And with Ethiopia being invaded by Italy around 1935(?), I'm not sure it's entirely illuminating just painting it as an Axis country.

And in general, I'm just not all that impressed with wikipedia. If there's certain areas where you think its approach works particularly well, I'm happy to listen. But overall, it might be an area where we need to agree to disagree.

Wikipedia is extremely strong in the natural sciences and engineering as well as the more mathematical social sciences such as economics. In things like World War II there are a lot of gray areas, which Wikipedia does its best to illuminate, but there will always be differences of opinion. In your case, if Spain should be counted as Axis, then Ireland should be counted as Allied since de Valera's policies during the war heavily favored the Allies while staying out of the war.
 
How often do I have to repost this?

Sorry, economic downturns can be delayed slightly, not stopped. People are always stupid about their Dutch Tulips of the day.

And taking the sting out of it - the right regulations, Keynesiasm and Monetarism, and
wasn't understood until after the Depression.

And OTL. FDR and Congress did enough spending to support all the allies. And it worked, along with the rest of the world's war spending, to end the Depression.
 
How often do I have to repost this?

Sorry, economic downturns can be delayed slightly, not stopped.

As many times as you feel like, because you're wrong. Downturns are not orbits, they're emanations of price movements. People have understood that for a long time. Alexander Hamilton used what were essentially open market operations in response to the 1792 crisis. Benjamin Strong understood the damage deflation could do in the 1920's. There is no magic spell invented by Mr Keynes that wards off the demons of economic recession. The Great Depression is not inevitable, it's just treated that way when you don't understand its foundational causes.
 
I am aware that Keynes' big book was in the mid-30s. But like you are saying, many of the same ideas were floating around and were in fact used in response to previous downturns.

Somewhat, but ideas like the paradox of thrift or the permanent income hypothesis were not exactly coherently understood.

Just in general, the understanding that the monetary authority had to respond to a deflationary recession already existed. This won't be improved upon by having someone invent Keynesianism half a decade ahead of time. Keynes' ideas emerged from a very specific context and you're not going to get something deeply similar from elsewhere. The language and ideas swirled around contemporary Cambridge and an economist from somewhere else isn't going to come up with something exactly the same.

It's also not going to have a deep effect on the Depression either way. There were a lot of things Keynes didn't know when he went to write his masterpiece, hence why economics has moved on from him since.
 
Jello_Biafra said:
The key factors that drove the Depression were 1) massive credit overleveraging 2) debt deflation spiral and 3) collapsing aggregate demand.

... there is very little governments could have done to head off those crises or even mitigate their effects.
Bingo. These things are, in large measure, a product of demographics, & that's something government policy reacts to, but really can't impact.
 
Okay, so how is the great depression sidestepped and where do things go from there?

Have the economy of the United States tank in 1924 or 1925 instead of 1929. You will get a slight or moderate recession, perhaps something as severe as the aftermath of the Panics of 1873 and 1893, but you would not get as severe of a depression as OTL's Great Depression.
 
. . . Keynes' ideas emerged from a very specific context and you're not going to get something deeply similar from elsewhere. The language and ideas swirled around contemporary Cambridge and an economist from somewhere else isn't going to come up with something exactly the same. . .
If someone other than Carl Sagan had popularized astronomy in the early 1980s, it could have gone in a hundred and one different directions.

But if someone other than Fleming (and Chain and Florey) had done work on antibiotics thirty years earlier, well, you'll still developing tools for the same practical problems. And I think it's similar for economic tools, but a modern economy really is biologically complex and this aspect does raise some interesting and in fact downright fascinating issues.
 
The Expanded Homestead Act of 1909 might have been written to require the improvements be "not contrary to the nature of the land under improvement," which would mean no crop farming.

I have to ask how on Earth do you figure that? Given one of the problems that led to the Dust Bowl was a misunderstanding misunderstanding of the ecology of the land being farmed. Since the ecology of the land wasn't really understood then "not contrary to the nature of the land" is basically shot down before it even gets out of the hanger.

Never mind that as NOVA's Where did the Colorado Go? even in the 1940s and 1950 the level of utter STUPID in the Federal government is mind blowing.

Putting a reservoir based on what amounted a arbitrary point was bad enough but to put it in a sandstone canyon (porous to water) was even worse. It is estimated that 1 million acre feet of water is lost through the sides of Lake Powell.

Also long term weather patterns were not very well understood in 1909. In fact, dendrochronology which had been used in the 1890s to predicts drouths in Russia was still in its infancy and the Laboratory of Tree-Ring Research, one of the key sources for drought information in the US, was still some 28 years away in the future.

Another problem is that much of the land that suffered from the Duck Bowl was part of the Homestead Act of 1862. All the Enlarged Homestead Act of 1909 was add some marginal land to the mix.

In fact, in 1909 only New Mexico was still a territory and much of Oregon (which was NOT part of the Dust Bowl) was opened up

Also the Enlarged Homestead Act of 1909 was geared toward agriculture crops in that a homesteader had to cultivate 1/8 of the acreage within three years.
 
Well, so much for that idea. Clearly, modifying the Act isn't going to happen. But finding a way to prevent the Dust Bowl would certainly help matters.
 
Well, so much for that idea. Clearly, modifying the Act isn't going to happen. But finding a way to prevent the Dust Bowl would certainly help matters.

Wave away the percipitation rise from the latter 19th Century. Leaving the rainfall at lower levels makes the "Great American Desert" Fremont perceived less attractive to grain farmers & other water intensive use.
 
Just avoid the double whammy. The Dust Bowl struck smack dab in the middle of the Great Depression, which is almost an ASB-level of bad luck, but sometimes real life is that way, too.

As I understand it, the keynesian approach focuses on GDP as the single most important number. And comparing the most recently measured period to that a year previously. And we ideally want 2 to 3% growth for a modern, industrial economy. And when it's negative, when we're actually producing less goods and services than we did a year ago, that's real bad. If various markets are not indirectly responding, we can do so directly, for example, through infrastructure spending. Although one problem is that it's hard to find enough projects to do the overall spending we need to be doing. And then once the economy picks up and things get tight again (such as genuine shortages of labor and interest rates being bid up), the governmental spending can be phased down.

But since the economy is almost biologically complex, I say clearly the way to do it is through a series of medium-scale experiments with rapid-cycle feedback. I mean, hopefully within a matter of weeks. Don't wait too long until the economy gets really bad.
 
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Just avoid the double whammy. The Dust Bowl struck smack dab in the middle of the Great Depression, which is almost an ASB-level of bad luck, but sometimes real life is that way, too.

As I understand it, the keynesian approach focuses on GDP as the single most important number. And comparing the most recently measured period to that a year previously. And we ideally want 2 to 3% growth for a modern, industrial economy. And when it's negative, when we're actually producing less goods and services than we did a year ago, that's real bad. If various markets are not indirectly responding, we can do so directly, for example, through infrastructure spending. Although one problem is that it's hard to find enough projects to do the overall spending we need to be doing. And then once the economy picks up and things get tight again (such as genuine shortages of labor and interest rates being bid up), the governmental spending can be phased down.

But since the economy is almost biologically complex, I say clearly the way to do it is through a series of medium-scale experiments with rapid-cycle feedback. I mean, hopefully within a matter of weeks. Don't wait too long until the economy gets really bad.

The most important number in classical Keynesianism is aggregate demand (AD, or Y, total income), not GDP. GDP as a figure hadn't been invented yet, the closest in use was GNP, which lacks measurements of exports. The people who make extensive use of (nominal) GDP are the market monetarists, a decidedly modern approach.

The thing is, the assumption that Keynesian economics is some kind of magic pill (like you are treating it here -- seriously man, economics isn't medicine) is badly flawed. There is continuing controversy over whether the fiscal multiplier is greater than one and the concept of monetary offset is pretty entrenched, although a 1930's Fed isn't necessarily going to be as attentive as the modern day System.

More broadly, your idea of short turnover ('weeks') is hopelessly unrealistic. Quick-feedback macroeconomic statistics are collected and calculated quarterly these days, with all the advantages of modern information systems. National income accounting didn't even exist in the 1930's (and wouldn't until the 40's and 50's), let alone weekly. Even with modern access to statistics, there is broad disagreement over the exact meaning they have vis monetary and fiscal policy, because it's almost impossible to disentangle the effects of shifts in these policy regimes from the rest of the economy (ceteris is not paribus). So, there's nothing at all like a reliable, scientific approach.

The reason I brought up Benjamin Strong is because he was a man who had something that looked like a solution/best practice for the monetary authority that already existed instead of trying to advance understanding of macroeconomics by decades on a whim. He really is your best bet both because the modern understanding of the role of the Fed in the monetary contraction is that it was central in the depth and length of the Depression and, having an active Federal Reserve that actually does the job it was created for will head off the entire thing.

Including things like preventing the Smoot-Hawley from spiraling out into a general trade war helps prevent a lot of the real shocks that brought the financial system to its knees over the course of 1930 and 1931 which, in cooperation with an effective monetary policy from the Fed, can turn the whole debacle at the end of the 20's and beginning of the 30's into a minor recession that isn't any better remembered than the ones in '24 and '26.
 
More broadly, your idea of short turnover ('weeks') is hopelessly unrealistic. Quick-feedback macroeconomic statistics are collected and calculated quarterly these days, with all the advantages of modern information systems.
What about FDR's 100 days and him challenging the military officers running the Civilian Conservation Corps to have the program up and running that summer? And please remember, President Roosevelt was inaugurated at noon on Saturday, March 4, 1933.

And what about the managerial accounting principle that what we need are good enough numbers in a timely fashion?
 
What about FDR's 100 days and him challenging the military officers running the Civilian Conservation Corps to have the program up and running that summer? And please remember, President Roosevelt was inaugurated at noon on Saturday, March 4, 1933.

And what about the managerial accounting principle that what we need are good enough numbers in a timely fashion?

What I'm saying is that we don't have the tools for the generation of weekly macroeconomic statistics today, with massive server farms for analysis and instantaneous data transfer for collection. Doesn't matter if FDR was the Great King of Kings in 1933, it wouldn't be technologically possible. They wouldn't even know they NEEDED to or what to look for when it came to the collection and calculation of national income accounts. That kind of thing was just getting off the ground in the early 1930's and wouldn't reach any kind of useful maturity for two more decades.

There's a reason Samuelson's formalization of Keynes didn't come out until after World War II: The formal tools didn't exist when The General Theory was published. Statistical collection in general was usually informal and sporadic, with those statistics that were collected being relatively useless for macroeconomic policy. That's why looking to the Fed for a solution is key: That was the one place that DID have access to things like bank balance sheets on a broad scale, price indices, financial market statistics, etc etc. These things aren't too useful for fiscal policy (assuming fiscal policy would do you any good), but they can be useful as indicators for monetary policy.

The whole god damned reason there was a Great Depression in the first place was because, after tipping the economy into recession in the late 20's, the Federal Reserve stood by as a series of real and financial shocks drove the price level down by a third and precipitated waves of bank failures. If the Fed DOES ITS JOB, these things don't happen and there is no need to fantasize about decades of advancement in macroeconomics being shoved into a year or two.
 
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