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This week, we span the human entire life span: first up, 16 year old Marjory Stoneman High School junior and 2nd Amendment advocate Kyle Kushuv. Young Kyle has had a busy week, meeting with Senators, the President, the First Lady and others. We’re grateful he had a few minutes for us (thanks to Bethany Mandel for the help in booking him!). Next up, the éminence grise himself, the legendary, but still spry at 86, Dr. Thomas Sowell. He’s got a new book (Discrimination and Disparities, and yes you should buy it). Also, peace in our time with North Korea? And a tizzy over tariffs is making everyone nuts.
Music from this week’s podcast: Soul Man by Sam and Dave
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Awesome artwork as usual, EJ.
I’d never noticed before, but it’s really evident James is related to Bob Ross.
I read an interesting book – can’t remember the author (Sowell??) where it was posited that WWII was not the stimulus that ended the Depression; it was instead that the Federal Government got off the back of industry as they need industry to ramp up for the war.
Another possible answer to Lilek’s question: wartime deficit spending & monetary policy caused inflation which raised prices above the minimums set by the government. Thus the market was able to function with market-clearing prices and operate properly. FDR was probably well-intentioned but clueless.
One of the new theories put into practice by FDR was that prices must be kept from falling as a way to support the producers so they could keep people employed. Under FDR’s experiment, prices were set well above what would have been market-clearing prices under the reduced demand of the recession, so cash hoarders had no incentive to come off the side lines and start buying again
The traditional theory had been that when demand collapses prices must be allowed to drop as an incentive for consumers to consume. Eventually prices got so so low that people hoarding cash would be tempted to spend again.
In fact, recessions prior to the Fed and Keynesian policies were severe but short. FDR’s fatal mixture of artificially high prices, initially tight monetary policy and high taxation gave us a deep and prolonged recession unlike any before.
Thus, it is not necessarily true that FDR & Braintrust knew what they were doing. Most likely they were sincerely trying to help but were in the thrall of a theory with no empirical support.
The Benjamin Strong Fed goosed the stock market and the economy, giving us The Depression and we have been doing one dumb thing after another ever since. It will end the hard way.
Great segment with Sowell! I always learn something when I hear him.
Wrong, Peter. The “dust up” between you and Sikes was not a spirited interchange. It was Sikes trying to answer a question or make a point and you continually interrupting him half a sentence into his comment.
This whole deal is nothing but a Rorschach test.
I can’t stand Larry Kudlow’s opinions, but I never freak out about the way he conducts himself in these podcasts.
We conservatives make a big deal (rightly) about college students refusing to listen to the other side, interrupting, and talking over speakers they disagree with. Then when one of “our own” does the same interrupting and talking over, it’s fine. I suspect the people who think it’s fine are the ones who agree with the interruptor.
I haven’t listened to LK, so I can’t comment on whatever his demeanor is or is not.
That’s why I chose my words carefully. This is never going to be sorted out without hiring a rhetoric professor to be referee.
Everyone complains about everything around here. I can relate to almost none of it.
I believe this is a common position held my many Austrian Economists like Milton Friedman, and Hayek. (Nobel prizes in 1976 and 74)
People need to get it out of their heads that stimulus or the Fed pushing the economy around improves things. It’s not easy. I could not explain the WW2 stuff myself.
I think the CCC infrastructure sort of worked back then just because we were sort of poor anyway and then that was followed by the baby boom and the 50s boom from the wipe out of Japan, France, the UK, and Germany. (Not an expert.)
I think that Peter misunderstood Dr. Sowell’s comment about what ended the Great Depression. It was not, as Peter said, the huge stimulus package known as World War II. Rather it was the end of the New Deal. FDR stopped his verbal, legal, and regulatory attacks on industry because he needed it to supply armaments.
Assume that Peter is right. Then what should have happened when the war ended? The Great Depression should have come back with a vengeance. Rather, the economy boomed. And it boomed not just because the United States was the “last man standing,” though that played a part. Rather, Congress kept Truman from restarting the New Deal, taxes were reduced, and the Smoot-Hawley tariffs had largely been dismantled.
I agree the industrial bases of the other great powers having been destroyed in the war left the US and Canada in the unique position to be the world’s factories. Much like China is today. Which continued into the mid 60s, and as exports declined this led to the stagflation, unemployment and general misery of the 1970s. The rebuilt industries ended up having an advantage, as they where re-tooled with much newer equipment they where much more efficient.
I just wish the high school student speaking on behalf of the 2nd amendment was as articulate as the (disingenuous) teen propagandists who have been embraced by the Left lately.
This kid didn’t even understand James’ first question! (And yes, he heard him just fine)
I find it grating when the spokesmen for our side aren’t on the ball, as it plays into the hands of the toxic opposition.
Dammit.
In short, there’s nothing wrong with the US economy that a sustained 6-year conventional bombing campaign against the rest of the industrialized world can’t fix.
Although John McCain is up for the challenge.
No. The industrial base of the US has been hollowed out to the point that there is no domestic industrial production of a number of products anymore. If the international trade regime changes and these imports are no longer available there would be quite a market disruption until new plants and equipment could be configured to produce the products required.
Yes! Except no. The thing is the whole industrial world is interdependent on most of the world. @skipsul has brilliantly made the point that when you see a tag on a product and it says “Made in ___” that only describes the country where the final assembly was done. It may have components from multiple continents. Even a low tech product like your shirt may have been made with cotton grown in Texas, the cotton turned into thread in North or South Carolina, then the thread shipped out of the country to be woven into cloth. The shirt may have been sewn together in another country, with buttons and dye coming from yet other countries. So imagine how many countries supplied the materials and components that went into your laptop that says “Made in China.” @hankrhody may have made one tiny component in Eau Claire, Wisconsin.
Seeing thousands of foreign factories blown up would damage commerce world wide. Even if someone didn’t care about the cost in blood if North Korea decided to go to war against South Korea, ruining SK’s industrial base would be harmful to everyone.
There was a lot of pent up human and intellectual capital etc. unleashed in the 50s. The war and the depression surpassed it.
Yes, when Japanese steelmakers rebuilt their factories, they used oxygen lance technology, which was better than the older methods still used in American steel mills. However, U.S. companies could have updated their technology as well – and probably much more easily than could the Japanese since they hadn’t lost most of their workers to bombing raids. Instead, however, U.S. steel companies ran to the government for help. The government obliged by erecting trade barriers against Japanese steel that relieved domestic companies of the need to compete. Eventually, bloated, inefficient steel companies collapsed under their own weight when the tariffs were finally reduced.
Despite the tariffs, Japanese steel was still imported into the U.S., though in the form of finished goods. The jobs that had been (temporarily) saved in the steel industry were more than offset by those lost in steel-using industries.
Unfortunately the contraction following the Panic of 1873 was a 6- year affair and the one after the Panic of 1893 was a 5-year. The ’93 was called the Great Depression until the one we think of hit the stands. (I guess “The Even Greater Depression, now with 1000% more counterproductive intervention! War to Follow!” got spiked when it was pitched.) Don’t even get me started on the Panic of 1837 (never totally eliminate the National Debt, kids–unless you want to be selling apples on the street corner for the next 10 years). For the record, the Panic of 1907 was smack dab in the middle of a 1 or so year recession and the 1921 unpleasantness (following the Great War and the concomitant wartime gross mismanagement of the US gold standard) was short and very sharp. Jim Grant compares the government response (take a nap) favorably to the Hoover/FDR response 10 years later.* FDR continued Hoover’s senseless policies, much as Obama followed Bush’s in our most recent adventure. Although FDR did manage to snatch defeat from the jaws of victory in 1937 by breaking the banking system a second time.
*The phrase my brother-in-law used on my sister during the approach of a Minnesota tornado comes to mind: “Stop running around like a chicken with its head up its ass!” Which she found funny enough that it instilled the necessary level of calm fortitude.
Edit: Footnote on 1837. It probably helped misery-wise that people still mostly lived on farms and, more importantly, were dead drunk. You could look it up, as Casey Stengel used to say. The US per capita alcohol consumption of the first half of the 19th century. Our ancestors could drink, yes they could.
Wow I didn’t think that at all. He was articulate and I very much appreciate hearing a young person speak calmly in complete sentences without all the emoting and hysteria displayed by his fellow students. Also there was a refreshing lack of “valley talk” and the word “like” used sparingly and appropriately.
I’m sure Kyle has a good head on his shoulders and a bright future. But I just don’t care what a sixteen-year-old thinks about public policy, whether he agrees with me or not. This was no different from other media outlets asking left-leaning students their opinions on gun control.
This is exactly why we had him on. He’s not getting booked on CNN, Maher’s show, or Kimmel. Although we too have concerns about putting kids front and center in public policy debates and in the media, we also felt it was important to air his views (which are markedly different from the other kids) in a respectful and non-confrontational situation.
First, thanks Ricochet for bringing Kyle onto the podcast. I found him just as articulate as any of his peers in the gun control debate, and leagues more respectful. Even if some listeners found they had nothing to learn from him, it’s still important to give young people a chance to express their views because, like it or not, the left is not going to stop putting children front and center in political debates. We might as well give those on our own side some experience.
Second, Kyle’s description of his app got me thinking about how facebook used to be. When I first joined, you could only sign up using a valid college email address. I actually had met almost everyone I was friends with and I actually used it to interact with my new college friends, find new friends with similar interests, and keep up with my high school friends. Now I’m practically afraid to post anything, save the occasional cat photo, and I distrust or dislike almost everything I see in my newsfeed.
The Trump/Kim photo you described reminds me of the McArthur/Hirohito photo, with the rumpled American towering over the formal despot.