Pro Logica

January 5, 2011

A Case of Gross Illogical Reasoning

Filed under: Politics — Tags: , , , , , — Ron Toczek @ 2:56 pm

I get a monthly pamphlet called ‘Imprimis’ put out by Hillsdale College in Michigan.  For those of you who haven’t heard of it, Hillsdale College claims to be conservative in their curriculum and also claims that it does not accept any Federal aid.  A recent publication cited a Republican Party mantra, to wit, “The Federal Government didn’t get us out of the Great Depression, World War II did.”  If I remember correctly, this phrase was used to denigrate the Keynesian economic solution of getting out of the depression, namely, massive expenditure by the government to reestablish the prior working conditions.  I do believe it was considered a legitimate criticism of Keynes’ solution by many people, but not sure of the prevailing opinion of economics experts.  Sure, the FDR Administration pushed through make work projects and partially relieved some misery but the depression dragged on and full recovery was not attained until the onset of the war.  There certainly was cause for pessimism of that solution.

After reading the mantra, I paused and thought to myself that something didn’t jibe; the realization came to me that properly understood the mantra actually vindicates Keynes’ solution.  What actually happened at the onset of the war?  First, young men either enlisted or were drafted into the armed services, not a small number but a huge amount of them; they had to be paid and who paid them?  Who else, the Federal government.  In a massive way people were taken off the unemployment roles; if the recruits were unemployed they now had a job and if they were employed replacements from the civilian workforce were removed from the unemployment roles.  Second, what did an enlarged armed services require?  Of course, massive amounts of war equipment; and who made all this war equipment?  Who else but civilian workers in the U.S. , many off the unemployment roles.  Again who bought all this war material?  You guessed right–the Federal government.  What’s the conclusion?  Clearly, massive spending by the Federal government got the U.S. out of the Great Depression, precisely what Keynes suggested.  Feeble spending just did not accomplish anything.

So you might ask, Where’s the false reasoning?”

Consider.  The referenced article was printed in 2010 and was averred to be an excerpt of a speech given at Hillsdale College; the above mantra was also quoted in the article and used as an expression confirming the futility of the Democratic stimulus package, i.e., the Keynesian solution was doomed to fail in this recession.  Since the mantra actually validates the Keynesian solution for the Great Depression, it cannot be used to invalidate any subsequent use of that solution.

On the other hand, Keynesian economists need not congratulate themselves for saying that their solution was the correct one–many of them thought that the stimulus amount was too small–but that the government didn’t spend enough.  Others thought the money was spent incorrectly.  While those are possibilities, there could be many other reasons why such spending might not have favorable results–the economic environment in the U.S. being different from that of the Great Depression for one.

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