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In this paper [2] – forthcoming in the Independent Review – Steve Horwitz and Michael McPhillips explore Bob Higgs’s thesis that the data cannot be plausibly interpreted to show that the U.S. economy was rescued from the Great Depression by Uncle Sam’s WWII expenditures. (The state of macroeconomics is poor when many serious macro thinkers continue to entertain the notion that war can generate widespread prosperity; historians and sociologists and florists – persons untutored in economics – can be forgiven for falling for this notion, but it’s difficult to understand an economist falling for it.) Here is the abstract:
In response to contemporary arguments that the expenditures associated with World War II were a major factor in ending the Great Depression and should therefore be imitated today, we offer historical evidence to suggest that the wartime economy was hardly a model of success in the eyes of most Americans. Expanding on Robert Higgs’ criticisms of the ability of conventional macroeconomic data to tell the real story, we examine newspapers, diaries, and other primary source material to reveal the retrogression in living standards in the US during the war. Our investigation suggests that wartime prosperity is largely a myth and hardly a model for recovery from the Great Recession.
Speaking of new papers, I’m eager to read this one – entitled “Would Conscription Reduce Support for War? [3]” – by David Henderson and Chad Seagren.
Here are some links to more commentary on the Supreme Court’s Obamacare (“ACA”) ruling: Randy Barnett [4] (whose optimism about the ruling I do not share); Michael Cannon (with inspiration from Bob Levy) [5]; Shikha Dalmia [6]; Ilya Shapiro [7]; Mark Steyn [8]; and John Yoo [9].
Peter Lewin explains that Keynesian stories do not imply Keynesian policies [10].
Here’s my GMU Econ colleague Pete Boettke on living economics [11].
Mayor Bloomberg’s trying to chill [12]. (HT Reuvain Borchardt)