There seems to be a persistent human obsession with the idea of a "real" money that depends on fantasies like a rigid gold standard, labor theory of value, proof of work for digital currency(!), etc...that can lead to periods of ruination. This way of thinking is contrary to the amazing stability and flexibility of a modern fiat money system that concentrates on nominal prices where price levels can be adjusted immediately based on market conditions. It's hard to blame FDR and other people from that era for the nostalgia associated with a "real" money system. They didn't grasp that they were already living in a nominal future.
To be fair, DJT has just appointed justices as vacancies have arisen. Roosevelt wanted to expand the size of the court to obtain the rulings he wanted.
Yes, but in dozens of other areas he's a far worse authoritarian than FDR. I was making a general comment about authoritarianism. FDR never tried to use a violent mob to steal an election, and never switched US support from Czechoslovakia to Nazi Germany.
I remember when you predicted the monetary expansion would offset the "fiscal cliff" in 2013.
I'm with Friedman: "The ultimate goal of a positive science is the development of a 'theory' or 'hypothesis' that yields valid and meaningful (i.e., not truistic) predictions about phenomena not yet observed."
Thanks. To be clear, I have no special ability to predict the future. I just go with market forecasts as the least bad approach. But that puts me ahead of most economists. :)
With the expiration of unlimited transaction's deposit insurance I said:
Dec. 15th 2012 market zinger forecast:
“Posts:203 Re: QE3 = nuttin’ honey (on iTulip.com)
“We’re close to seeing the real power of OMOs. R-gDp is likely to accelerate earlier and faster than anyone now expects. The RoC in M*Vt before any new stimulus is already above average. With low inflation (given some deficit resolution), Jan-Apr could be a zinger”
I have no opinion on the topic, only an interesting history fact about FDR....
Where did the Roosevelt money come from? The common answer is banking and real estate, but where did the stake for those ventures come from?
From Warren Delano, FDR's maternal grandfather. WD was one of the partners in the opium trade in the mid 19th century, and was a major player in drug traffic that led to the opium wars. WD made his fortune in the first iteration of the conflict, came back to the US, blew it all up in the Panic of 1857, then went back and did it all over again. At one time, he was the largest drug dealer in the world.
I don't recall reading this in the hagiographies of FDR...(?) I wonder why not?
Trump literally campaigned against packing the courts. It was Biden that campaigned for packing the courts. Do you listen to their campaign speeches? Where do you get your information?
Tariffs are not authoritarian. You just don't like them.
I don't like pizza with anchovies, but I don't go around telling people it's tyrannical because I advocate against it. Most Americans want tariffs, so you're in the minority right now. That's called democracy. We want it. you don't. So convince us we should want it after 50 years of failure. You have thus failed to do so.
DOGE is not tyrannical. There is nothing tyrannical about cutting waste and fraud.
FDR's polices were not humane. Why would you ever think that? This is a guy who imprisoned Japanese Americans for the crime of being half Japanase. He was a thug and liar, who couldn't even tell Americans the truth about his medical condition. Social security is not humane. You are basically stealing from other taxpayers because you're too lazy to take care of your elderly parents.
Have you read the 123 page UN report titled "Replacement Migration". The whole point of that report was to increase the number of people in western countries for fear the population would decline (low birth rate). Western leaders just fear societal collapse, as the social ponzi scheme unfolds (not enough workers at the base). Population decline is not bad, though, and it will not effect output at all, because robots can produce. The only thing it will effect is social programs.
Still defending Trump after the clown show of the past two months? Perhaps you might prefer reading a different blog. This one's intended for people with an open mind, not cult members.
While not a Trump fan, the Southern Border is an issue that almost all i speak to regardless of which side of the aisle they sit on want something done, despite Trump histrionics regarding the number of criminals coming in to the US which he grossly exaggerates. And have to agree with him regarding Europe's need to spend more for its own defense.
Regarding Tariffs he is clearly out to lunch, but he has a PhD Harvard educated economist, Peter N encouraging and supporting his silliness. That sadly, only emboldens him.
You aren't talking to people like me. I neither notice nor care about the border, or the people coming through it. Except positively to the extent I subscribe to the OG Libertarian creed of relatively open borders for those who are not guilty of crimes against persons or destruction/theft of property.
Europe, like the US, doesn't need to spend more for its defense. That's what nukes, tactical teams, and drones are for. We could all cut back significantly if we were all nuked-up, and everyone understood that all we had to defend ourselves are the nukes.
I probably agree with Selgin and Sumner on The Great Depression and the policy responses of the time...but I am disappointed that neither (AFAIK) discussed the option of money-financed fiscal programs (or central bank QE buying of government bonds + federal government deficits) in dealing with the economic malaise.
Such macroeconomic titans as Ben Bernanke and Stanley Fischer have opined that money-financed fiscal programs have their place in macroeconomic tool-kits.
If not the Great Depression...then when?
Michael Woodford has said that central-bank buying of government bonds, alongside concurrent federal deficits, is a money-financed fiscal program.
More recently, Indonesia used money-financed fiscal programs to skirt the COVID-9 era...with apparent success. Bank Indonesia now owns 25% of Indonesia's national debt.
"Indonesia's annual inflation rate eased to 0.76% in January 2025, marking the lowest reading since March 2000, and well within the central bank's target range of 1.5% to 3.5%."---AI generated comment.
As a layman, I do not have the credentials to analyze Bank Indonesia's use of QE, or direct financing of Indonesian national government programs, through the COVID-19 era.
Bank Indonesia's financing of government outlays seems to have worked to advance that nation through the C19-period straits. That is my layman's assessment.
I keep hoping a credentialed economist somewhere sees my posts and takes a look.
Was it really price targeting that caused misguided policies like AAA? It seems obviously counterintuitive to restrict agricultural production at a time when a significant portion of the population was extremely food-insecure.
It seems obvious (to me at least, with the benefit of hindsight) to increase agricultural demand by either issuing government-backed loans or grants tactically to sectors that would increase demand for food from consumers, which shouldn't have been that hard when a meaningful portion of the country was going hungry.
I know it's hard to believe, but it is actually true that FDR thought that restricting supply was a good way to get prices back up again. If all FDR had done was dollar devaluation, and nothing else, the Depression would have ended by the mid-1930s.
To some extent, but it would have been far more difficult. You'd have to inflate the entire world, as there's a world price level under the international gold standard.
Devaluation is a form of monetary stimulus, but it's not how modern economists think of the term. They think in terms of money printing and interest rate cuts. Hoover did QE, FDR did not.
"A president who had some major setbacks in the courts and the media, and starts out his second term looking for revenge."
So that is what it is called when you try to punish those who really did try to weaponize the government or who blatantly lie about things (Nothing wrong the Biden faculties. 🤣
There seems to be a persistent human obsession with the idea of a "real" money that depends on fantasies like a rigid gold standard, labor theory of value, proof of work for digital currency(!), etc...that can lead to periods of ruination. This way of thinking is contrary to the amazing stability and flexibility of a modern fiat money system that concentrates on nominal prices where price levels can be adjusted immediately based on market conditions. It's hard to blame FDR and other people from that era for the nostalgia associated with a "real" money system. They didn't grasp that they were already living in a nominal future.
Very good comment. A few people did understand things back then, but you are correct that the vast majority did not.
To be fair, DJT has just appointed justices as vacancies have arisen. Roosevelt wanted to expand the size of the court to obtain the rulings he wanted.
Yes, but in dozens of other areas he's a far worse authoritarian than FDR. I was making a general comment about authoritarianism. FDR never tried to use a violent mob to steal an election, and never switched US support from Czechoslovakia to Nazi Germany.
Yes, it was the Democrats who pushed to push the Court. Item 5 also applies well to Biden, who blamed implausible causes for his inflation.
"His inflation?" :) Inflation is the Fed's business. Fiscal policy can only pose a dilemma of inflate or higher interest rate
I remember when you predicted the monetary expansion would offset the "fiscal cliff" in 2013.
I'm with Friedman: "The ultimate goal of a positive science is the development of a 'theory' or 'hypothesis' that yields valid and meaningful (i.e., not truistic) predictions about phenomena not yet observed."
Thanks. To be clear, I have no special ability to predict the future. I just go with market forecasts as the least bad approach. But that puts me ahead of most economists. :)
With the expiration of unlimited transaction's deposit insurance I said:
Dec. 15th 2012 market zinger forecast:
“Posts:203 Re: QE3 = nuttin’ honey (on iTulip.com)
“We’re close to seeing the real power of OMOs. R-gDp is likely to accelerate earlier and faster than anyone now expects. The RoC in M*Vt before any new stimulus is already above average. With low inflation (given some deficit resolution), Jan-Apr could be a zinger”
I have no opinion on the topic, only an interesting history fact about FDR....
Where did the Roosevelt money come from? The common answer is banking and real estate, but where did the stake for those ventures come from?
From Warren Delano, FDR's maternal grandfather. WD was one of the partners in the opium trade in the mid 19th century, and was a major player in drug traffic that led to the opium wars. WD made his fortune in the first iteration of the conflict, came back to the US, blew it all up in the Panic of 1857, then went back and did it all over again. At one time, he was the largest drug dealer in the world.
I don't recall reading this in the hagiographies of FDR...(?) I wonder why not?
Even if true, what does any of that have to do with FDR? Is a person guilty for the crimes of their grandfather?
Perfect internet comment....Doesn't know how to verify facts and straw mans to a point not made. Brilliant.
"I don't recall reading this in the hagiographies of FDR...(?) I wonder why not?"
Yes, you are "just asking questions"
Great review. Have always liked George Selgin’s work.
(I am going to leave the FDR DJT comparison just sitting there: I do admire the sheer troublemaking chutzpah of the comparison though.)
"the FDR DJT comparison"
Where did I mention DJT? :)
Very convincing analysis.
" If FDR’s New Deal was effective, why wasn’t it repeated in 2009?"
The cynical pro New Dealer would say it's because most politicians in both parties owe most of their wealth to stock holdings.
Because people like Selgin think banks are intermediaries.
lol.
Trump literally campaigned against packing the courts. It was Biden that campaigned for packing the courts. Do you listen to their campaign speeches? Where do you get your information?
Tariffs are not authoritarian. You just don't like them.
I don't like pizza with anchovies, but I don't go around telling people it's tyrannical because I advocate against it. Most Americans want tariffs, so you're in the minority right now. That's called democracy. We want it. you don't. So convince us we should want it after 50 years of failure. You have thus failed to do so.
DOGE is not tyrannical. There is nothing tyrannical about cutting waste and fraud.
FDR's polices were not humane. Why would you ever think that? This is a guy who imprisoned Japanese Americans for the crime of being half Japanase. He was a thug and liar, who couldn't even tell Americans the truth about his medical condition. Social security is not humane. You are basically stealing from other taxpayers because you're too lazy to take care of your elderly parents.
Have you read the 123 page UN report titled "Replacement Migration". The whole point of that report was to increase the number of people in western countries for fear the population would decline (low birth rate). Western leaders just fear societal collapse, as the social ponzi scheme unfolds (not enough workers at the base). Population decline is not bad, though, and it will not effect output at all, because robots can produce. The only thing it will effect is social programs.
Still defending Trump after the clown show of the past two months? Perhaps you might prefer reading a different blog. This one's intended for people with an open mind, not cult members.
While not a Trump fan, the Southern Border is an issue that almost all i speak to regardless of which side of the aisle they sit on want something done, despite Trump histrionics regarding the number of criminals coming in to the US which he grossly exaggerates. And have to agree with him regarding Europe's need to spend more for its own defense.
Regarding Tariffs he is clearly out to lunch, but he has a PhD Harvard educated economist, Peter N encouraging and supporting his silliness. That sadly, only emboldens him.
You aren't talking to people like me. I neither notice nor care about the border, or the people coming through it. Except positively to the extent I subscribe to the OG Libertarian creed of relatively open borders for those who are not guilty of crimes against persons or destruction/theft of property.
Europe, like the US, doesn't need to spend more for its defense. That's what nukes, tactical teams, and drones are for. We could all cut back significantly if we were all nuked-up, and everyone understood that all we had to defend ourselves are the nukes.
Sound economic policy is always a good idea
Winning a World War is golden
My advice to Trump, attack Mars
My comment was incorrectly entered as a reply
I probably agree with Selgin and Sumner on The Great Depression and the policy responses of the time...but I am disappointed that neither (AFAIK) discussed the option of money-financed fiscal programs (or central bank QE buying of government bonds + federal government deficits) in dealing with the economic malaise.
Such macroeconomic titans as Ben Bernanke and Stanley Fischer have opined that money-financed fiscal programs have their place in macroeconomic tool-kits.
If not the Great Depression...then when?
Michael Woodford has said that central-bank buying of government bonds, alongside concurrent federal deficits, is a money-financed fiscal program.
More recently, Indonesia used money-financed fiscal programs to skirt the COVID-9 era...with apparent success. Bank Indonesia now owns 25% of Indonesia's national debt.
"Indonesia's annual inflation rate eased to 0.76% in January 2025, marking the lowest reading since March 2000, and well within the central bank's target range of 1.5% to 3.5%."---AI generated comment.
Interesting topic, rarely discussed.
That's the 127th time you've written the exact same comment. Do you do that to get exercise for your fingers?
As a layman, I do not have the credentials to analyze Bank Indonesia's use of QE, or direct financing of Indonesian national government programs, through the COVID-19 era.
Bank Indonesia's financing of government outlays seems to have worked to advance that nation through the C19-period straits. That is my layman's assessment.
I keep hoping a credentialed economist somewhere sees my posts and takes a look.
And I keep hoping I'll win the lottery.
Was it really price targeting that caused misguided policies like AAA? It seems obviously counterintuitive to restrict agricultural production at a time when a significant portion of the population was extremely food-insecure.
It seems obvious (to me at least, with the benefit of hindsight) to increase agricultural demand by either issuing government-backed loans or grants tactically to sectors that would increase demand for food from consumers, which shouldn't have been that hard when a meaningful portion of the country was going hungry.
I know it's hard to believe, but it is actually true that FDR thought that restricting supply was a good way to get prices back up again. If all FDR had done was dollar devaluation, and nothing else, the Depression would have ended by the mid-1930s.
"A better argument can be made in favor of FDR’s monetary policies."
Couldn't the Fed have inflated even without the moving link to gold?
To some extent, but it would have been far more difficult. You'd have to inflate the entire world, as there's a world price level under the international gold standard.
"however, FDR was skeptical of both of the two most important policy tools now favored by macroeconomists, fiscal stimulus and money printing."
??? Isn't the consensus monetary stimulus (or is that what is meant by "money printing??
Devaluation is a form of monetary stimulus, but it's not how modern economists think of the term. They think in terms of money printing and interest rate cuts. Hoover did QE, FDR did not.
"A president who had some major setbacks in the courts and the media, and starts out his second term looking for revenge."
So that is what it is called when you try to punish those who really did try to weaponize the government or who blatantly lie about things (Nothing wrong the Biden faculties. 🤣
Politics is a helluva a drug.
yes, indeed. And language is a funny thing.
Why should I read a book when the author doesn't understand that all savings deposits originate within the payment's system?
Did Shakespeare know that? Would you read Shakespeare?
He's the one that touted it. Powell drove the banks out of the savings business. DDs to TDs doubled. AD is higher as a result.