Vintage pro-inflation propaganda

This video is not available on this platform.
0
0
2738 days ago, 18992 views
Inflation (1933) This propaganda film attempts to explain how inflation can bring about happy days. The title of the video is now changed to vintage pro-inflation propaganda. It has been brought to my attention that Roosevelt's policy was in no part influenced by John Maynard Keynes' theory. Calling it Keynesian is misleading. In fact, Kenyes was quite critical of FDR's New Deal. In an open letter to FDR published by New York Times on Dec 31, 1933 Keynes wrote: "Now there are indications that two technical fallacies may have affected the policy of your administration. The first relates to the part played in recovery by rising prices. Rising prices are to be welcomed because they are usually a symptom of rising output and employment. When more purchasing power is spent, one expects rising output at rising prices. Since there cannot be rising output without rising prices, it is essential to ensure that the recovery shall not be held back by the insufficiency of the supply of money to support the increased monetary turn-over. But there is much less to be said in favour of rising prices, if they are brought about at the expense of rising output. Some debtors may be helped, but the national recovery as a whole will be retarded. Thus rising prices caused by deliberately increasing prime costs or by restricting output have a vastly inferior value to rising prices which are the natural result of an increase in the nation's purchasing power." "I do not mean to impugn the social justice and social expediency of the redistribution of incomes aimed at by N.I.R.A. and by the various schemes for agricultural restriction. The latter, in particular, I should strongly support in principle. But too much emphasis on the remedial value of a higher price-level as an object in itself may lead to serious misapprehension as to the part which prices can play in the technique of recovery. The stimulation of output by increasing aggregate purchasing power is the right way to get prices up; and not the other way round." Thus, Keynes did not agree with FDR's way of cutting production to bring about inflation and he thought FDR's emphasis on inflation is misguided. Further in the letter he wrote about the money supply: "The other set of fallacies, of which I fear the influence, arises out of a crude economic doctrine commonly known as the Quantity Theory of Money. Rising output and rising incomes will suffer a set-back sooner or later if the quantity of money is rigidly fixed. Some people seem to infer from this that output and income can be raised by increasing the quantity of money. But this is like trying to get fat by buying a larger belt. In the United States to-day your belt is plenty big enough for your belly. It is a most misleading thing to stress the quantity of money, which is only a limiting factor, rather than the volume of expenditure, which is the operative factor." Keynes believed there was enough money to go around in 1933 and flooding the US with more money would not help recovering. Full text of the letter can be found here: http://newdeal.feri.org/misc/keynes2.htm I hope that clears up some confusion. Thanks to drmadjdsadjadi for pointing me to the Keynes letter. This propaganda film attempts to explain how inflation can bring about happy days. The title of the video is now changed to vintage pro-inflation propaganda. It has been brought to my attention that Roosevelt's policy was in no part influenced by John Maynard Keynes' theory. Calling it Keynesian is misleading. In fact, Kenyes was quite critical of FDR's New Deal. In an open letter to FDR published by New York Times on Dec 31, 1933 Keynes wrote: "Now there are indications that two technical fallacies may have affected the policy of your administration. The first relates to the part played in recovery by rising prices. Rising prices are to be welcomed because they are usually a symptom of rising output and employment. When more purchasing power is spent, one expects rising output at rising prices. Since there cannot be rising output without rising prices, it is essential to ensure that the recovery shall not be held back by the insufficiency of the supply of money to support the increased monetary turn-over. But there is much less to be said in favour of rising prices, if they are brought about at the expense of rising output. Some debtors may be helped, but the national recovery as a whole will be retarded. Thus rising prices caused by deliberately increasing prime costs or by restricting output have a vastly inferior value to rising prices which are the natural result of an increase in the nation's purchasing power." "I do not mean to impugn the social justice and social expediency of the redistribution of incomes aimed at by N.I.R.A. and by the various schemes for agricultural restriction. The latter, in particular, I should strongly support in principle. But too much emphasis on the remedial value of a higher price-level as an object in itself may lead to serious misapprehension as to the part which prices can play in the technique of recovery. The stimulation of output by increasing aggregate purchasing power is the right way to get prices up; and not the other way round." Thus, Keynes did not agree with FDR's way of cutting production to bring about inflation and he thought FDR's emphasis on inflation is misguided. Further in the letter he wrote about the money supply: "The other set of fallacies, of which I fear the influence, arises out of a crude economic doctrine commonly known as the Quantity Theory of Money. Rising output and rising incomes will suffer a set-back sooner or later if the quantity of money is rigidly fixed. Some people seem to infer from this that output and income can be raised by increasing the quantity of money. But this is like trying to get fat by buying a larger belt. In the United States to-day your belt is plenty big enough for your belly. It is a most misleading thing to stress the quantity of money, which is only a limiting factor, rather than the volume of expenditure, which is the operative factor." Keynes believed there was enough money to go around in 1933 and flooding the US with more money would not help recovering. Full text of the letter can be found here: http://newdeal.feri.org/misc/keynes2.htm I hope that clears up some confusion. Thanks to drmadjdsadjadi for pointing me to the Keynes letter.
Tags: inflation, , monetary, , system, , Franklin, , Roosevelt, , new, , deal, , Herbert, , Hoover, , the, , Great, , Depression, , federal, , reserve, , John, , Maynard, , Keynes, , fiat, , money, , supply, , gold, , standard, , bank, , bubble, , Pete, , Smith

SPONSORS

test video premium

SPONSORS

test video standard

SPONSORS

test video page bottom