Who is your favorite U.S. President?

Barack Obama, George W. Bush or one of the other 42?
Luke Wark
Feb 17, 2014

 Abraham Lincoln, also known by some as Fred Priebe, tells tales of the nation's 16th-president's life during a school presentation to the Immaculate Conception School in Port Clinton on Tuesday, February 11, 2014.

Do you have a favorite president this President's Day? Tell us who and why in the comments below

Comments

Contango

Re: "opinion."

True. But that's all it is.

The facts:

After WWII, most of the developed world was in economic shambles. Only the U.S.' remained intact.

Selling goods and services to the rest of the world ultimately brought the U.S. out of it's economic malaise.

WinstonSmith's picture
WinstonSmith

The Myth of US Prosperity During World War II

In my previous article, I laid out why war is not good for an economy generally. Yet, while many people admit that the resources used to fight the Vietnam War or either of the U.S. wars on Iraq could have been put to better use, they still have an almost romantic view of how good World War II was for the U.S. economy. I promised in my previous article to delve further into that issue.

The main reason most people, including economists, think that the U.S. entry into WWII was good for the economy is that they compare the economy during the war with the economy during the Great Depression, which began in 1929 and lasted until the U.S. entered into war. On its face, this reasoning is plausible. The U.S. was officially at war from Dec. 8, 1941, with its declaration of war on Japan, until Sept. 2, 1945, with the surrender of Japan's government. So, the unemployment rate for 1941, since it includes only three weeks of war, can be taken as an indicator of prewar peacetime unemployment. That rate averaged 9.9 percent for all of 1941. Unemployment fell dramatically throughout the war, reaching a low of 1.2 percent by 1944. Also, between 1941 and 1944 – the peak year of wartime spending – real gross national product rose by 37 percent. In short, World War II reduced unemployment and raised GNP; ergo, World War II was good for the U.S. economy. So goes the reasoning.

But let's look more carefully at those numbers, beginning with the unemployment rate. The U.S. government imposed military conscription in 1940 and got the draft machinery moving early in 1942. Between 1940 and 1944, the size of the military increased by almost 11 million people. Of the 16 million people who were in uniform at some time during World War II, fully 10 million were conscripted. (For more on this, see Robert Higgs, "Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s.") In other words, they had "jobs" because the alternative was jail. And many of the 6 million who volunteered were what military manpower economists call "draft-induced." One can hardly judge people to be better off, based on their having jobs, if they were forced into these jobs. The only way economists have, or anyone has, to figure out whether someone is better off having a job than being unemployed is to know that the person chose the job. But conscription is the antithesis of choice. And to put all this in numerical perspective, the civilian labor force during World War II was only 54 to 56 million. It's not hard to reduce unemployment by almost 7 million people if you use conscription to raise the size of the armed forces by almost 11 million people.

Still, didn't gross national product increase? Yes, but during World War II, GNP became a meaningless measure because of price controls and war production. Take price controls. Please. When the U.S. government entered the war, it did what many governments do – imposed price controls on a vast array of goods and put itself at the front of the line for those goods. Then it rationed what was left to the general population. The government imposed price controls on virtually all goods used in the war effort – gasoline, rubber, nylon, food and, through the draft, manpower. So when we look at the incomes of consumers and consider what they were able to buy with those incomes, we get an overstatement. Sure, it's great to be able to buy things cheap – if they're available. But price controls and rationing made them unavailable. It's like the old butcher joke:

Customer: How much is your filet mignon?

Butcher: Nine dollars a pound.

Customer: That's outrageous. I can go across the street and buy it for six dollars a pound.

Butcher: Then why don't you buy it across the street?

Customer: He doesn't have any.

Butcher: When I don't have any, I sell it at five dollars a pound.

I think about my parents in this context. The main stories they told me about privation were not about the depression preceding the war, but of the rationing of sugar and meat during the war. They were in Canada, but conditions were similar there, both before and during the war. One thing that stands out is a Feb. 4, 1945, entry in their guest book – just four months after their October 1944 wedding – in which a couple invited for dinner gave a complete listing of everything they'd eaten that weekend, presumably using up my parents' ration coupons for the week. The highlights: bacon, eggs, meat loaf, and cake. Why comment with that degree of detail if it wasn't special?

Probably more important, though, is the way the GNP figures distort in the area of war production. As economic historian Robert Higgs points out, the U.S. essentially had a command economy during World War II. Had he wanted to be less polite but equally accurate, he could have said that the U.S. had a fascist economy. The essence of fascism, as an economic system, is government dictation of what is produced, along with nominal private ownership. The 38 percent1 of GNP that the federal government spent on war in fiscal year 1945 (from July 1, 1944, to June 30, 1945) actually understates the expenditure. The reason goes back to price controls. By putting itself in line for all the goodies, the government paid low prices. But because these prices were artificially low due to price controls, the goods were valued artificially low. It is highly likely that the government truly spent more than 40 percent of GNP on war that year.

But this spending on war still counts as GNP, doesn't it? Yes, in the sense that the government defined it that way. But not in the sense of being production that Americans valued for its usefulness in consumption or investment. All of those expenditures that went for guns, trucks, airplanes, tanks, gasoline, ships, uniforms, and labor were expenditures that were destroyed. Not just the goods, but even the millions of labor hours, were used up without creating value to consumers. It's true that they might have created value by saving America from invasion. Whatever your view on that possibility, that's a separate issue. The point is that it's not prosperity to produce things that government quickly destroys. So, if we factor out this 38 percent, we're left with virtually no increase in real gross national product per capita between 1940 and the last fiscal year of the war.

It's actually worse than that. Despite various policies of Franklin Roosevelt that extended the Great Depression, the economy was coming out of the Depression in the prewar years. The unemployment rate, which had reached 24.9 percent in 1933, the worst year of the Great Depression, had fallen to 17.2 percent in 1939, 14.6 percent in 1940, and, as mentioned, 9.9 percent in 1941. Relatively-free-market economies, as the U.S. economy was, even after eight years of FDR, tend to recover from recessions and depressions as businesses find valuable uses for previously unused resources. The odds are high, therefore, that the unemployment rate would have continued to fall, absent U.S. participation in World War II, possibly reaching as low as 6 or 7 percent by 1944. This means that GNP per person, properly measured to reflect consumers' values, would have been well above its actual level in 1944. Whatever the value of U.S. participation in the war, for Americans' standard of living, World War II was a bust.

Licorice Schtick

When you copied to paste, you missed,

Copyright © 2006 by David R. Henderson. Requests for permission to reprint should be directed to the author or Antiwar.com.

http://antiwar.com/henderson/?ar...

PLEASE learn to provide links.

WinstonSmith's picture
WinstonSmith

Most people don't want to dig any deeper... +2 points to you good sir. I would have given you =3 points but you just copy/pasted into google yourself. Still, good on ya for doing the leg work. That's more than I can say for %90 of the people posting on the SR comment section.

Licorice Schtick

Hmm. The pomposity has a familiar ring. Dinged for using Google. Wonder how he would you have done it?

WinstonSmith's picture
WinstonSmith

"Requests for permission to reprint should be directed to the author or Antiwar.com."

I didn't know that the comment section of a backwater cesspool's local newspaper was considered "reprinting"

Licorice Schtick

Your excretions are not improving the water quality here.

Contango

Re: "war is not good for an economy generally,"

John M. Keynes disagreed.

WinstonSmith's picture
WinstonSmith

Keynes was a status quo idiot... Google: "Ludwig von Mises" and prepare to finally understand economics.

Contango

No doubt about it: War increases aggregate demand.

No need to Google, when I've read several of his books; including "Socialism" and "The Causes of the Economic Crisis."

coasterfan

Nah... the New Deal policies had taken effect for several years before WWII, although the war did help the improvement continue.

themomx6

Ronald Reagan

Licorice Schtick

Reagan was diefied by the oligarchs for making them richer with tax cuts that made a shambles of the budget. Nice guy, mediocre President, completely overrated, especially as the "great communicator. Clinton was a better at that.

coasterfan

Agree with Licorice. We Democrats cannot begin to understand why anyone would deify Reagan. His policies greatly expanded the chasm between the haves and have-nots, the deficit ballooned under him, and his Iran Contra scandal was one of the top 3 political scandals in America over the past 30 years. Like Bush II after him, America continued to suffer AFTER he left office because of things he did while he was in office.

SamAdams

Thomas Jefferson. George Washington set the stage, and a better man probably doesn't exist. But Thomas Jefferson refined the stage. He made more mistakes than Washington, but his general outlook included great imagination for the future.

For the record, he, too, would be gravely disappointed in what little is left of his legacy.

deertracker

I don't have one!

OMGNEWS

good old Ben Franklin huh lol. Clarify what number prez was he agian? I dont recall. Wonder how many people think he was a president.

Left Sandtown

My bad Daily News,I meant Edison!

Little Giant

Sandtown may have left Sandusky but he kept his Sandusky Public Schools education.

santown419

This coming from a little girl.

The Big Dog's back

Franklin Delano Roosevelt.

Licorice Schtick

Thumbs up!

slappymcgee

Lincoln, for destroying slavery and defeating traitors

WinstonSmith's picture
WinstonSmith

You went to public school didn't you? That's cute, I bet you think Washington cut down a cherry tree too.

WinstonSmith's picture
WinstonSmith

"I will say then that I am not, nor ever have been, in favor of bringing about in any way the social and political equality of the white and black races — that I am not, nor ever have been, in favor of making voters or jurors of negroes, nor of qualifying them to hold office, nor to intermarry with white people; and I will say in addition to this that there is a physical difference between the white and black races which I believe will forever forbid the two races living together on terms of social and political equality. And inasmuch as they cannot so live, while they do remain together there must be the position of superior and inferior, and I as much as any other man am in favor of having the superior position assigned to the white race."
~ Abe Lincoln - Charleston, Illinois, September 18, 1858

pntbutterandjelly

One of the last things Abraham Lincoln had on his list of accomplishments was the freeing of slaves(That may have been, at one point in time, due to his friends owning slaves or his lack of interest at any level in that debate.)as he was at last forced to bring it up to help win enough popularity to continue the war to its bloody end. What he actually did accomplish was to take powers away from the states and centralized it into the Feds realm of authority. "That" was the beginning of the end to "United States". He knew...without the Southern states...the U.S. as a whole would be much weaker. That's NOT to say that freeing of the salves was in and of itself was wrong. But again...it wasn't his intent in the beginning.

badboy

This is so funny, Just like Leno's "Jay-Walking".

Dinghy Gal

Ronald Regan

thinkagain

I’m torn between President Lincoln and President Ra-ghoratreii.

SanduskyNow

Mine is Alexander Hamilton

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