The stuff I predicted just hasn't happened yet

Hey, it works for climatistas.  The Manhattan Contrarian, noting with dismay the Democrat assumption that government spending is economically expansionary, takes on an economist whose career was marked by nothing more strongly than the failure of every prediction he ever made.  But his equations were great.
"When this war [World War II] comes to an end, more than one out of every two workers will depend directly or indirectly upon military orders. We shall have some 10 million service men to throw on the labor market. We shall have to face a difficult reconversion period during which current goods cannot be produced and layoffs may be great. Nor will the technical necessity for reconversion necessarily generate much investment outlay in the critical period under discussion whatever its later potentialities. The final conclusion to be drawn from our experience at the end of the last war is inescapable--were the war to end suddenly within the next 6 months, were we again planning to wind up our war effort in the greatest haste, to demobilize our armed forces, to liquidate price controls, to shift from astronomical deficits to even the large deficits of the thirties--then there would be ushered in the greatest period of unemployment and industrial dislocation which any economy has ever faced.”
In fact, after the war, government spending fell 61%, and the result was an economic boom. Economist David Henderson calls Samuelson’s prediction of a post-war depression the single most disastrously wrong economic prediction ever.

2 comments:

raven said...

Obviously it was Cash for Clunkers that saved us.
Break those windows, boys!

Dad spoke of running aircraft engines through the complete test cycle, fixing any problems, packing and crating them, and then running them over with a bulldozer. Contractual obligations, but the Gov did not want them any more. And supposedly all the cheap gov surplus was going to destroy manufacturing capacity.

Wasted effort is wasted effort.

Roy Lofquist said...

Economics for Dummies.

Lesson 1: How to spell "unexpectedly".
Lesson 2...