If you listen to Krugman, he doesn’t dispute with Will that net investment went down in the 1930′s and that investment was lousy when looking at the decade as a whole. What Krugman said was that the investment climate improved during the FDR years, especially as New Deal legislation took effect. It was not stagnant, or worsening as Will contends. If you look at the numbers, the years with the largest negatives in investment levels were during the Hoover administration and two year of the FDR administration, as the New Deal. As time passed, as Krugman states, the investment climate improved gradually until you have the positive numbers in 1936-1937. Then, as Krugman said, you had the decrease again when FDR attempted to balance the budget, followed by a slight recovery. I don’t know how the person who wrote that piece could have listened to Krugman and Will discuss this point, and somehow find that the numbers didn’t back up Krugman.

The article you posted doesn’t prove Will right, it changes the argument so Will would be right by ignoring every Krugman said. Krugman’s analysis is correct, that the investment climate did improve during the later part of the 1930′s. For that not to have been the case, the numbers that were cited would have decreased or remained the same as the FDR administration continued, not generally improved. Will’s correct assertion that net investment was negative for most of the 1930′s doesn’t overwhelm that fact he ignored the improvement of markets under FDR, the crux of Krugman’s argument. At least, not according to the data they provide in their article.

Prior to Hoover and FDR, we had banking panics and economic contractions.

But the economy would recover.

Under Hoover and FDR, the economy didn’t significantly recover until after policies started being modified as a result of World War II.

The stock market didn’t get back to 1929 levels until the 1950s.

which is why we had 19% unemployment in 1938 and a steaming rate of over 17% in 1939.
Now in 1940 we really started to roll, the rate dropped to a red hot 14.6%.
But then other things had started to roll by then also, right through Poland and France.
The essential point being, and apart from fluctuating rates of investment, which BTW old FDR didn’t start to comprehend, that the whole New Deal flew by the seat of it’s pants. But let Krugman crow in the minutiae of his arguments as we now seem to be bent on copying, not learning from, the mistakes of the past.

WW2 is hardly a vindication of Roosevelts economic policies. which is my point regardless of what Krugman says. The larger point is not Krugman but the revival of references to him in connection with Obama.

I’m sure you ‘re not advocating ending depressions through war which created huge public debt. Most of which was paid off, reduced after the war, which left Europe prostate. The last being the jumpstart to America’s prosperity, there being no real economic competition.

You are fixating on two cruddy years of increased capital growth, you then conflate it with the massive WW II spending, and seem not to realize it, and the have the gall to suggest that someone else is advocating it. War is not an instrument of a sane economic policy. Although you bandy the word stupid around I note that no response is made to the unemployment figures I give you, which ought to give an intelligent guy like you pause. Those numbers are the answer to FDR’s policy, but then WW II took care of the unemployment problem to didn’t it ?

Signing off for tonight, back tomorrow.