Re: A question about the great depression

On Tue, 31 Oct 2006 18:29:50 -0500, Nospam <nospam@xxxxxxxxxxx> wrote:

S. Doo wrote:

Hello???

The Depression collapsed both the wealth and income distributions into
the narrowest spread seen before or since, by bringing the rich way
down.

Actually that is not quite accurate.

http://www.economist.com/images/20060617/CSF838.gif

Only in 50's the gap betwen rich and poor started to become more decent.
As you see, rich handled Great Depression quite well.

Ahem, that note says: "excluding capital gains".

Hey, if you don't count the 85% drop in the stock market and
comparable capital losses in private business bankruptcies and
property losses, then sure -- the rich held on just fine!

After 1933 the slow recovery began with the protected and employed
"haves" doing better than the have-not unemployed and unprotected
businesses, as noted above -- but to the extent that this was more
true in the US than elsewhere (and it was) it was due to the
government's policies, as noted above.

Not quite. GD was a general system failure. As mater of fact, GD was the
total colapse of classical capitalism...

Yeah, yeah...

and from then on it was replaced by a
slightly reformed capitalism, often called "free market capitalism".

Ah, so capitalism was more "free market" after WWII than in the 1920s,
eh? ;-)

The root cause of Great Depression was the huge income disparity....

Oh, yeah, sure.

Though it's very odd how reviews of the causes of the Depression by
real economists and economic historians, like the ones from the Fed
and Bernarnke that I've linked to here, all fail to give this even the
slightest mention, being that it was "the root cause" and all!

Oh but what do such sources know compared to usenet mavens, and why do
I even mention this?

A new wave
of immigrants after WWI and the introduction of mass production
technologies and first automations created put more presure on workers to
accept lower wages. The result was that the average working class household
was left without no savings to weather a recession. The lower wages made
people to live from paycheck to paycheck....

Yes, and such mass production and automation technologies have ever
after by the very same process continued to make us poorer and poorer
.... until now their final triumph with the rise of microelectronics
and the Internet has driven us all into the very dirt.

~ sigh ~
<rest of the imaginary "just so story" snipped>

...Only a harsh set political decisions as FDR did were able to save the
capitalism and start to reform it to make it more stable.

You mean his creation of all those cartels and monopolies, abandonment
of anti-trust enforcement, and imposition of government mandated
increases in food prices above market level (all as noted in the links
you snipped) -- including the price of milk for children, which
remains artificially increased in many parts of the US to this very
day, to help rich producers.

These are the sorts of "reforms" you approve of as needed to improve
capitalism, eh?

You favor these. Yes, I do see that you feel driven to support "harsh
political decisions" indeed!

In any event the overall wealth and income distribution spreads
remained tight through the Depression, and then also through WWII due
to all the gov't controls on the economy, and didn't start widening
again until the normal economy began appearing again, for the first
time in a generation, after the war.

Thai is EXACTLY the opposite what you see in the graph.

You mean the graph that omits *all* -- trillions of dollars -- of
capital income? And that says nothing at all, zip, nada, about wealth?

You fabricate data or what ?

You clip-and-paste graphs you don't understand from studies you
haven't read, and imagine they make your point? ;-)

Let's make it dumb-down simple. From the Census:

Here's famly income in 2005 dollars for "rich" and "poor" and the size
of the gap in between, with the amount by which the size of the gaps
(top 20% minus low 20%, and top 5% minus low 20%) grew from 1948 to
1978....

[fixed pitch font lines things up]

gap from gap fom
low 20% top 20% low 20% top 5% low 20%

1948: $11,365 $34,803 $23,438 $56,675 $45,310

1958: 14,472 44,619 30,147 +29% 68,644 54,172 +20%

1968: 21,639 63,813 42,174 +80% 98,053 76,414 +69%

1978: 24,009 78,503 54,494 +133% 124,460 100,451 +131%

http://www.census.gov/hhes/www/income/histinc/f01ar.html

Sure looks like the Census says that the income distribution began
widening right after WWII, continued widening steadily thereafter, and
that the top-bottom gap had increased by more than 130% by 1978.

When a full functional economy transformed US into a superpower and put a
man on the Moon, the gap betwen poor and rich dropped. Only after the
unfortunate recovery of radical right (aka 80s) the gap started to grow
again...

OK, so *you* say the income gap became smaller all through the 50s,
60s and 70s.

But the Census says the income gap grew steadily all that time and had
well more than doubled, up > 130% by 1978.

Oh my, oh my, just whom should I believe??? ;-)

<snip>
.

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