> > . . .
> >Well, the problem is that there is no evidence that such measures work.
> They certainly did not work in the depression, when 1937 slump occurred in
> the midst of lavish pump-priming.>
> Year GDP Surplus
> (Deficit-) Surplus/GDP
> 1936 82.7 -3.2 -3.9%
> 1937 90.8 .5 .6%
> 1938 84.9 -1.5 -1.8%
> Not too lavish. In these terms, 3.9% was a
> modest effort, the surplus in '37 was no
> effort at all, and 1.8% ain't much as deficits
> (Source: National Income and Product Accounts,
> Volume 1, 1929-58.)
Actually, Max understates his case. It's well known that FDR still believed in balancing the budget at the time, and as soon as things seem to have settled down, this is what he tried to do. The recession of '37/'38 was the result. The disasterous results are what finally gave Keynesian ideas a serious (as opposed to stop-gap) hearing.
There's a problem, of course, with the "prime-pumping" locution. In the source domain, true prime-pumping is a one-shot affair. This has NEVER been the meaning in the target domain of economics, but the meaning has been quite restricted when used by some, quite elastic when used by others.
On the elastic side of the usage, one could fairly say that serious prime-pumping didn't begin until 1940 or so, and wouldn't have been supported by the capitalist class until that time and in the face of the war threats at the time. Without the Nazis in WWII and the Soviet Union during the Cold War, such support would NEVER seem to be forethcoming, and this underlying political unwillingness would seem to be the reason that adequate prime-puming is not to be expected.
With these qualifications in place, I'd say that Louis's underlying point looks strong, though not the form in which he presents it.
If capitalism doesn't have an other, it doesn't have to perform well at all. You can always blame its problems on the Illuminati, the Freemasons, and the Jews. Not to mention all them furrinurs.
-- Paul Rosenberg Reason and Democracy rad at gte.net
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