Hitler Can't Save us This Time

I've had time to think about the Forbes piece that features a Keynesian solution to our current near Depression. It's true that building bridges and roads takes years of planning plus permits to even begin construction (can you see these environmentalist assholes stopping each and every truck load of cement to see if an endangered ant got mixed into the load?) so that any bill that passes right now will do nothing. It's also true that stimulating any manufacturing while there is a glut of already produced product will simply exacerbate an already serious "demand" problem. The activity of throwing money at car makers will do nothing but flood already overstocked dealerships with unwanted cars. What we have to do is flood the zone with government purchases of the things we make so that the employees can buy stuff. That is what we did just before WWII when we made military stuff that we "leased" (lend lease) to Britain and (Good ol') Joe Stalin. This was a crazy system but it was working to stop the economic slide even before Pearl Harbor put us into a pedal to the metal manufacturing state. The resulting government purchases acted to stimulate the economy as nothing had before.

There is a semi-famous newsreel clip taken of a worker from a 1940 Burbank CA Lockeed plant that was suddenly running full steam making fighter planes for Britain. It features a guy who has the first job he's had in years and years and was in the process of buying a house with his earned wages. His statement is shocking because it's true.

"Thank God for Adolph Hitler," was his statement. The guy knew that a maniac was responsible for a resurgence in economic activity.

In other words, Hitler's war and our responses to it was flooding the zone with money for workers who consume consumer goods. Goods were being produced that the Nazis immediately destroyed, stuff that we knew was headed to a garbage dump somewhere was bought by our government and just dumped (with a patriotic fanfare). So the task at hand, and forget the mass hatred by the ignorant tossed at Keynes, is to put money in the consumer's pocket, not with welfare handouts for doing zero ("jobs banks"), but with money earned for making products. So in this scenario the government simply buys manufactured goods and tosses them in the ocean. So what? Is this any different than knowingly allowing the Nazis to destroy our production back in 40 and 41? We've been handing farmers billions for not growing stuff for at least a generation, in part to avoid the Depression ravaged farmers engaging in the fruitless activity of throwing all their milk into the river, burning their own crops, and blockading railroads to cut down on the produce glut in a futile attempt to restore some supply and demand balance. And this time it will be live on TV.

We have to dump philosophy and get moving. Now. Instead of being scared of Hitler we can get scared of something on the horizon right now. Besides Paris Hilton and Lindsay Lohan.


Anonymous said...

How about bulldozing foreclosed homes and then rebuilding them?

Howard said...

I already mentioned that. What's wrong with it?

Anonymous said...

There's Ahmediniwussie in Iran, Chavez in Venezuela, Putin in Russia, and probably a half dozen crazies that don't matter "today." We'll get our Hitler. Remember, that statement was a decade after the crash. We have 10 years for someone to pop up.