Now vs. then. Great article.

http://www.voxeu.org/index.php?q=node/7696

They wanted me to cut monetary base growth but I said No, No, NO!

http://www.voxeu.org/index.php?q=node/6965

From Hal Cole and Lee Ohanian...Lessons from the Great Depression....or "Welcome Home Ed Prescott"

If you can hold your nose and get past the first part of the article where they have to beat every economic fact into a real business cycle interpretation, they have some great things to say about today.



http://online.wsj.com/article/SB10001424053111904787404576532141884735626.html?mod=WSJ_Opinion_LEADTop


Of course, not everyone is all that comfortable with the interpretation that the data have been given by Cole and Ohanian and for good reason. Why in the world the Real Business Cycle folks can't acknowledge the vast importance of the gold standard during the Depression is beyond me. Lee Ohanian has one sentence in one paper saying it would have helped the Depression if the Fed would have been more expansionary early on in 1930. I have waited for those words for some time.

http://uneasymoney.com/2011/09/26/misrepresenting-the-recovery-from-the-great-depression/


As I have said in the past, I was at a conference and heard Ed Prescott say "all of this financial market stuff that people are worrying about is much ado about nothing."
Well Dr. Prescott the men in the white coats are not far behind you...Welcome home Ed Prescott:

The Japanese eat up anything published on the Great Depression for obvious reasons.

You can see the advertisement for the Japanese market of my upcoming reference volumes The Seminal Works of the Great Depression by clicking here.

The Great Depression and the Historical Narrative.

I recently was invited to attend a conference on "Interpreting the Great Depression". It was put on by The Liberty Fund http://www.libertyfund.org/ . It was very pleasant and I was invited by Arnold Kling. Below Arnold writes some of the event's highlights.




http://econlog.econlib.org/archives/2011/03/history_and_the.html

Lessons from the Great Depression.

http://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/events/conferences/lessons/papers/

Here is a series of papers from a recent Conference in the UK at the University of Warwick regarding current policy lessons from the Great Depression. All are on the top of my reading list.

Lessons from the Great Depression 101: 2009 Redux

Thanks to Greg Mankiw's Blog...Click on this picture to the left. You will know what it means instantly.

Here... listen to this funked up smokey jazz number to cheer you up

http://www.youtube.com/watch?v=17E4M6n9TSY&feature=related

The Great Depression: Part II

An undergrad from another University recently called me and asked if he could speak to me about the Great Depression. He was writing his thesis on the Depression and one component of his research was to include conversations with individual scholars in his field of inquiry. I think it is great that the kid had the guts to grab the phone and ring me up, so I gladly helped him out. It reminds me of how people asked me after my first book "How in the world did you get to meet Milton Friedman?" I said "it's easy, I picked up the phone and dialed his number." Thanks Dad.

Anyway, he asked me to provide a list of advantages that have resulted from the Depression. So I will share them with you. Consider this the Randy Parker Top 10 List of good things from the Depression:

#10 It showed bad economic policies give us bad economic outcomes (National Industrial Recovery Act anyone?).

#9 We abandoned Say's Law and the real bills doctrine for good.

#8 We provided a social safety net for those less fortunate (even though it currently is out of hand and unaffordable...stay tuned for the next 50 years and watch what happens to entitlements).

#7 We were divorced from the silly notion of having to balance the federal budget annually.

#6 We put the gold standard in the history books for good (Donald Luskin where are you?).

#5 After leaving gold we had independent economic policies and traded external balance for internal balance as we should.

#4 The FDIC obviated banks' chronic problems with the liabilities side of their balance sheets (don't worry, now they have all manners of trouble with the assets side).

#3 The Depression showed that general deflation is a macroeconomic death sentence (attention Ben Bernanke!).

#2 The Depression gave us an aggressive Federal Reserve that is not going to let the financial markets implode.

AND NOW #1

#1 The Great Depression ended Prohibition! I'll drink to that!

The "New New Deal". Hal Cole and Lee Ohanian get it right. You may want to get your valium refilled.

http://online.wsj.com/article_email/SB123353276749137485-lMyQjAxMDI5MzAzMjUwMzIyWj.html

The Great Depression: Part IV

Let's jump ahead in our on again off again trip down history lane. I promised a multi-part history of the Great Depression and that continues today. Let's just go forward into the 1930s before we return to the 1920s.
The money supply is the product of the monetary base times the money multiplier. Here are the sad pictures from the Great Depression. As you can see on the left, the money supply crashed and burned because on the right, the excess reserve and the currency holding ratios both increased and crashed the money multiplier. The Fed did nothing to the monetary base and the money supply fell by about 33%.

Here are similar graphs today. As the money multiplier has crashed and burned (on the left), the moneary base has increased like it was shot out of a cannon.

This is one of the main reasons why we have not slipped back to the 1930s. All you have to do is eyeball it to see. See?

Insight from a good friend and Randy Parker Hall of Fame member: James Butkiewicz

www.funnyeconomist.com/Jim.doc

The New Deal's Economic Legacy

The attached web site is a link to the Conference I was a part of last Monday as an invited guest of the CATO Institute. Also on the program was the very capable Hal Cole of the University of Pennsylvania and the very capable Price Fishback from the University of Arizona. Hal Cole's presentation starts at the 1:35 minute mark. I start at the 21:21 minute mark. Price Fishback's presentation starts at the 32:12 minute mark. The question and answer session starts at the 49:05 minute mark.

http://www.cato.org/events/newdeal/index.html

Point vs. Counter Point

Yes, we are tracking the Great Depression:

http://www.voxeu.org/index.php?q=node/3421

No we are not:

http://economy.nationaljournal.com/2009/06/a-new-depression-after-all.php#1337734

Check it out now...funk soul brothers.

Hey! Check out this web site!
http://www.cato.org/events/newdeal/index.html

It is going to happen again.

If you think that was the last bubble in the course of economic history, you need to never touch another drop.


www.nytimes.com/2009/05/17/magazine/17wwln-lede-t.html?_r=1

More on the New Deal

Here is a link to the testimony of Brad Delong, Christina Romer, Son of John Kenneth Galbraith and Lee Ohanian last week on the lessons of the New Deal. Start this at about minute number 95. That is where Lee Ohanian's testimony starts.

http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.LiveStream&Hearing_id=f5afa171-b136-4f39-9b81-27937a9bbd3b

Here is a copy of Lee Ohanian's testimony if you are so inclined.
www.funnyeconomist.com/ohanian.pdf

More ink on "A Second Look at the New Deal."

This is the NY Times take on the conference I attended on March 30th in New York.

Amity Shlaes meet FDR.

If we are still debating the Great Depression after 80 years, how long do you think the fur will fly over this latest business cycle malady?



http://www.nytimes.com/2009/04/04/arts/04depr.html?_r=1&emc=eta1

Greg Mankiw meet Lee Ohanian.

http://gregmankiw.blogspot.com/2009/04/hoover-did-it.html

Amity Shlaes and The Forgotten Man

I was invited to attend a conference last Monday at the Council on Foreign Relations in New York with the theme being "A Second Look at the New Deal". The author of the book The Forgotten Man, Amity Shlaes, asked me if I would come and you don't turn down invitations like that. Anyone with any interest in the New Deal and the history of the Great Depression should put this book on their reading list. Amity Shlaes really makes the history come alive as she tells it through the eyes of the participants in real time. I read the whole 383 pages of text in less than 2.5 days. Any student of this period should not miss it. And thanks a lot for thinking of me Amity.

When Christina Romer speaks of the Great Depression, we need to pay attention.

http://www.brookings.edu/~/media/Files/events/2009/0309_lessons/0309_lessons_romer.pdf