One thing is clear: the GOP is not about to fold up shop and go along with Barack Obama, just because he's President and the Democrats won a substantial legislative victory as well last November. They're already starting to marshall their forces to oppose, or at least slow down, and render as ineffective as possible, whatever stimulus package Obama comes up with. And, of course, recycling lies about the New Deal, FDR and the Great Depression are essential parts of the package. On Sunday I wrote a diary, "A Brief Peek At UCLA's Anti-FDR Propaganda", which looked only at the gross parameters surrounding claims made in a paper that David had referred to in passing in a previous diary.
While kanzeon weighed in late to make the point: "The measure of when the Depression ended, to conservative critics, isn't usually GDP or real output, but unemployment," negative GDP growth is the standard by which economists routiney identify recesssions--and by extension depressions--as well as being the single most comprehensive measure of economic activity (for good or ill), so I still think it's useful to look a little more closely at GDP as a pre-emptive antidote against conservative/GOP bullshit that's bound to be coming at us in the days ahead.
The UCLA report claimed that the Depression should have ended in 1936--7 years after it began, and roughly 3 3/4 years after FDR took office. Without ignoring Kanzeon's caveat, that still seems rather hard to accept given just how badly the GDP was doing. Thing is, I don't think I've ever seen a clear graphical representation of just how bad that was. So I decided to make one myself. Given the UCLA author's belief in a magic 7-year time-frame, I decided to chart the 7-year GDP growth figures from around the beginning of the US economy to date. You can clearly see just how drastically the Great Depression departs from anything else in our history, as well as just how powerful our recovery was, particularly once WWII spending kicked in:
This chart just goes to show how incredibly unusual the Great Depression was. No wonder a large number of people, all across the political spectrum, thought that it well might be the end of capitalism. There was nothing remotely like it in all our history. And the idea that everything could readily be solved by simply letting normal economic forces work--as the UCLA researchers propose--seems utterly unbelievable, simply by looking at the relatively limited scope of any of the other previous sharp rises, none of which is remotely large enough to get us back into the 20-40% 7-year GDP growth range that is normal for the economy in the specified 7-year time frame--much less the 3 3/4 years that FDR actually had in office before the end of 1936 rolled around.
Another way of looking at that same data is look at the distribution of 7-year GDP growth-rates. Here we see that the vast majority fall between 10% and 55%. That's a pretty broad range by any measure--a factor of 5+. Outside it we only have 9 growth rates that are higher, and 10 that are lower:
As it turns out, the four negative 7-year growth rates are all associated with the depths of the Great Depression, 1932-1935, before FDR's recovery had gained enough steam to cancel out the disastrous performance during Hoover's term after the Great Crash. The next 3-slowest growth rates, all 1% or less--covered the two years either side of the 4 years with a negative total, plus 1914.
On the other hand, the top 9 years, with 7-year growth over 55%, include 1883 with 59.4%, 1882 with 61.7%, and 7 straight years of the WWII/Great Depression recovery period, 1940 to 1946. Those two bookending years clocked in with a paltery 62.7% for 1940, and 67.2% for 1946. Beyond that it was 72.0% for 1941, 87.2% for 1942, 92.8% for 1943, 98.3% for 1944, and 103.1% for 1945.
With spectacular growth rates like that, it's hardly surprising that things would have to taper off, eventually, and thus it's not really so surprising that 2 of the last 3 years on the extreme low end of 7-year GDP growth are 1950 and 1951, with 6.4% and 6.0% growth respectively. The only other year not directly or indirectly connected to the Great Depressio and its recovery period is 1897, with a 9.1% 7-year GDP growth, the lowest ebb recorded that was associated with the Panic of 1893, and its aftershocks.
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