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Name That Statesman

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June 24, 2009 – Comments (32)

This is a game called "Name that Statesman." I have done my best here to describe the individual in detail without giving away the time or place where he worked (though it is a difficult task.) This should be an easy one for all historians here, so if you find it clever but already know the answer, please don't spoil it for the rest. (A rec and a nod will do =D) I hope it gets peope thinking - especially those who don't know the answer at first.  If it's popular, I've got quite a few more of these are that are far more difficult.    (And no Google searching the quotes either until you figure it out! That's cheating!)

Daivd in Qatar

He was widely viewed as a wise, if protectionist, central planner who recognized the failure of the free market and the need for nationally guided economic development. A famous mainstream economist of his time wrote that he "found a cure against unemployment before Keynes was finished explaining it.”

He instituted a New Deal, with differences only in the detail. GDP figures from the era reflect a growth path. Unemployment stayed low. He intervened in labor markets, but he never attempted to boost wages beyond their market level.

He embarked on huge public works programs like highway expansion, protected industry from foreign competition, expanded credit, instituted jobs programs, regulated the private sector on prices and production decisions, vastly expanded the military, enforced capital controls, instituted family planning, penalized smoking, brought about national health care and unemployment insurance, imposed education standards, and eventually ran huge deficits. His party's progressive program was essential to limit the market economy. Such programs remain widely praised today.  They are features of every “capitalist” democracy.

Keynes himself admired his economic program, writing in the Foreword to a foreign language edition to the General Theory:

"[T]he theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of [his country's political system], than is the theory of production and distribution of a given output produced under the conditions of free competition and a large measure of laissez-faire."

Keynes’s comment did not come out of the blue. His party's economists rejected laissez-faire, and admired Keynes, even foreshadowing him in many ways. Similarly, the Keynesians admired his party (see George Garvy, Journal of Political Economy 83, no. 2 [April 1975]: 391–405).

Even as late as 1962, in a report written for President Kennedy, Paul Samuelson had implicit praise for him:

"History reminds us that even in the worst days of the Great Depression there was never a shortage of experts to warn against all curative public actions. . . . Had this counsel prevailed here, as it did in [his party], the existence of our form of government could be at stake. No modern government will make that mistake again."

Name That Statesman

32 Comments – Post Your Own

#1) On June 24, 2009 at 1:06 AM, DaretothREdux (36.36) wrote:

lol...that's a dirty trick...i know who it is...we will see if it pisses anyone off when they find out!

Dare

P.S. I quoted that Statesman in one of my blogs...it didn't get many recs...heh.

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#2) On June 24, 2009 at 1:10 AM, whereaminow (< 20) wrote:

I should have left out Keynes and just said [very famous economist]....  that would have made it more difficult.

David in Qatar

 

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#3) On June 24, 2009 at 1:44 AM, Effloresce (29.11) wrote:

I got ya. ;) Great idea for a post!

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#4) On June 24, 2009 at 2:01 AM, FleaBagger (28.21) wrote:

I'm not sure how to Google any of that. I was going to to confirm my guess (as I think I know who it is - no wage controls, New Deal, contemporary of Keynes - not very many statesmen that would describe). But what search syntax could be pulled from your post to Google this guy?

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#5) On June 24, 2009 at 2:21 AM, whereaminow (< 20) wrote:

FleaBagger,

Heh, that means I did better than I thought. If you don't have it by tomorrow, I'll post the answer.

David in Qatar 

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#6) On June 24, 2009 at 2:29 AM, starbucks4ever (96.30) wrote:

It's kind of too obvious, IMHO, if we ideed have the same statesman in mind.  

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#7) On June 24, 2009 at 3:02 AM, whereaminow (< 20) wrote:

zloj,

I expected this to be a layup for you. I've got a couple more up my sleeve that I hope will at least stump you a little bit.  I'll throw another one up next week.

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#8) On June 24, 2009 at 6:19 AM, SirCharms (< 20) wrote:

I like this game. Pretty sure I've got this one correct, but I we'll see tomorrow. +rec.

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#9) On June 24, 2009 at 9:32 AM, lemoneater (67.43) wrote:

If I'm correct in my guess, then I could add that he was an exceptional communicator and greatly mourned when he died. As a political conservative, I have mixed feelings about the legacy he left of social programs and the precedents he set for wide sweeping governmental controls. However, I cannot deny that he gave my grandpa a job in constrast to the "do nothing" policy of his very unpopular predecessor.  

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#10) On June 24, 2009 at 10:24 AM, pete4357 (99.06) wrote:

Great post David! rec

I think i've got it. I don't want to give it away but it isn't FDR. It's designed to make you think it sounds like him though.

Looking forward to the rest of the series. Cheers

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#11) On June 24, 2009 at 10:51 AM, chk999 (99.97) wrote:

I know who this is, good pick.

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#12) On June 24, 2009 at 11:41 AM, MattH42004 (29.74) wrote:

Well done, though a little easy for the history/econ majors. The Keynes quote should be a dead givaway, it is famous in the history/econ crowd (or maybe infamous would be a more apt discription). I'm looking forward to more of these. The ensuing discussion once this is revealed could be interesting...

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#13) On June 24, 2009 at 12:01 PM, TMFLomax (45.52) wrote:

Good post, David... I am pretty sure I know and actually I was just thinking about that the other day (as in, why don't more people know and think about this).

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#14) On June 24, 2009 at 12:02 PM, whereaminow (< 20) wrote:

I will be posting the answer here at 3PM EST. That gives a few more people a chance to ponder it......

Glad you all enjoyed it.  I promise the next one will be better.  This gave me all kinds of ideas already on how to make it more interesting and fun. 

David in Qatar

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#15) On June 24, 2009 at 12:23 PM, EggplantWizard (99.28) wrote:

Interesting thought exercise. We'll see how many people are upset by the answer -- that will be the interesting part.

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#16) On June 24, 2009 at 12:33 PM, FreundInvesting (29.57) wrote:

haha.. i was thinking of this guy, but said naww he couldn't be describing him. good job!

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#17) On June 24, 2009 at 12:48 PM, GNUBEE (24.37) wrote:

MattH42004 is probably right, any domestic officer lives for him.

Wanted to ask, did you meet with RP and ask him questions?

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#18) On June 24, 2009 at 12:57 PM, lctycoon (< 20) wrote:

I know who this is too... I honestly wonder how many people are going to be quite upset when they find out who this actually is.

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#19) On June 24, 2009 at 1:16 PM, whereaminow (< 20) wrote:

GNUBEE,

Sure did. Check this out:

Pictures 

It was pretty darn cool... (if you're a dork like me)

David in Qatar

 

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#20) On June 24, 2009 at 1:29 PM, starbucks4ever (96.30) wrote:

"I honestly wonder how many people are going to be quite upset when they find out who this actually is." 

I don't see that there is anything to be upset about. Americans of course have been educated by Hollywood to expect a black-and-white picture, but in the real world you can deplore the mistakes of an otherwise well-meaning person as well as sometimes take a lesson or two from an otherwise represensible character. That the guy was successful economically only proves that a bad guy does not HAVE to be an idiot. That is, he CAN be an idiot if he wants to, and some bad guys certainly are, but after all this is optional.

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#21) On June 24, 2009 at 1:30 PM, GNUBEE (24.37) wrote:

Yes it is and Yes I am.

GNUBEE (Dork in PA)

 

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#22) On June 24, 2009 at 2:21 PM, Option1307 (30.18) wrote:

This is a great idea David, hopefully you will continue this as a weekly series or something.

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#23) On June 24, 2009 at 2:51 PM, devoish (96.00) wrote:

Its made to sound like FDR, so its probably not. I doubt it is Obama, who sadly, is certainly no FDR. There were similarities to FDR, but were there differences too?

Did he think he was superior to some of his countrymen?

He instituted a New Deal, with differences only in the detail

Were the differences in detail huge?

Was his "New Deal" intended to be available to everyone in his country equally if needed?

Did his "New deal" work out differently than FDR's?

Did an American embarrass his a** in front of the whole world?

Did that American have that opportunity because of, Keynes economic theorys aside and irrelevant, some Americans had reached out to help others fight for and win legal equality for all races?

Rather than apply the "pull up by your own bootstrap theory".

Is economic theory the LEAST important consideration when comparing these two men?

Or do I have the wrong guy?

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#24) On June 24, 2009 at 3:13 PM, whereaminow (< 20) wrote:

Unfortunately, I have to post the answer and then go to bed. It's 10pm over here and I need to get some sleep.  Why so early you ask?  I get up around 3am every morning (you get used to it.)

The answer is Adolf Hitler

Now before we ponder what this all means I want to recommend a few books for the historically curious.

The first is a little known German book called The Vampire Economy by Gunter Reimann, written in 1939.  

Backed by the General Staff of the army, Nazi bureaucrats have been able to embark upon schemes which compel the most powerful leaders of business and finance to undertake projects which they consider both risky and unprofitable. The building-up of the German war economy takes precedence over everything, including the opinions of private capitalists and their scientific research staffs. . . . The viewpoint of private investors and industrialists who think of the ultimate safety and soundness of investments has been disregarded.

This is particularly true of the big industrialists who earned huge profits from the armament boom and who have large amounts of capital to invest. Their liquid funds do not escape the attention of State commissars, who are searching for means to finance new State-sponsored plants.- Günter Reimann, The Vampire Economy: Doing Business under Fascism (New York: The Vanguard Press, 1939), p. 125.

One of the interesting things about Reimann's book is that it directly contradicts Socialist and Marxist claims that Hitler was duped, bullied, or supported by the big business interests. In fact, it was quite the opposite.

German Big Business and the Rise of Hitler by Henry Turner of Yale University, written in 1985, also contradicts the Left's claims that Capitalists undermined the Weimar Republic and supported the Nazi rise. The evidence in Turner's book is staggering and massive.  It was Professor Turner's devastating research into Marxist David Abraham's The Collapse of the Weimar Republic that led to Abraham leaving the historical profession.

Still, the myth persists. Such is the nature of propaganda.

Another book I wish to point out is The Arms of Krupp: The Rise and Fall of the Industrial Dynasty that Armed Germany at War by William Manchester. It's quite possibly the best history book I've ever read.  Though it deals with the Krupp family's long history of weaponizing not only Germany, but the world, it also gives you an excellent understanding of the political and economic backdrop which led to the Third Reich.  It's an amazing book, but very long.  It took me about half a year to get through it.

Finally, if you are still interested there is The Wages of Destruction: The Making and Breaking of the German Economy by Adam Tooze.

"The Nazi party did not adopt work creation as a key part of its programme until the late spring of 1932, and it retained that status for only eighteen months, until December 1933, when civilian work creation spending was formally removed from the priority list of Hitler’s government. . . [Work creation] was in sharp contrast to the three issues that truly united the nationalist right . . . the triple priority of rearmament, repudiating Germany’s foreign debts and saving German agriculture. . . It was Hitler’s action on these three issues not work creation that truly marked the dividing line between the Weimar Republic and the Third Reich."  - Adam Tooze, The Wages of Destruction, pp 24-5.

 

Next we move on to the GDP figures. Massive government spending can always boost GDP in the short run.  In the long run, however, the GDP rise masks dislocations in the underlying economy.  This is aside from the fact that GDP treats government expenditures as wealth creation at all.  Think about that for a moment as you stare trillions of dollars of recent government spending in the face.  Is that really wealth creation.  Classical economists would consider that wealth destruction.  Murray Rothbard recommended subtracting government spending from GDP to arrive at a more reliable number. Those of you who have watched the recent waste are silently nodding your heads in agreement. 

 

Finally, moving on to the quotes from the original post.  The first quote is from post-Keynesian Socialist economist Joan Robinson

The Keynes quote is in his preface to the German edition of The General Theory, dated September 7, 1936, Keynes indicated that the ideas of his book could more readily be carried out under an authoritarian regime:

Nevertheless the theory of output as a whole, which is what the following book purports to provide, is more easily adapted to the conditions of a totalitarian state, than is the theory of the production and distribution of a given output under conditions of free competition and a large measure of laissez-faire.

 

Although I have thus worked it [Keynes's theory] out having the conditions in the Anglo-Saxon countries in view — where a great deal of laissez-faire still prevails — it yet remains applicable to situations in which national leadership is more pronounced. (Donald Moggridge, Maynard Keynes: An Economist's Biography, Routledge, 1995, p. 611.)

And finally, Paul Samuelson's quote:

History reminds us that even in the worst days of the great depression there was never a shortage of experts to warn gainst all curative public actions. . . . Had this counsel prevailed here, as it did in the pre-Hitler Germany, the existence of our form of government could be at stake. No modern government will make that mistake again.

In other words, Hitler economic policy saved the Germans!!!

But such is the twisted logic of the Statist. As Mises pointed out in Human Action, each government intervention in the economy will lead to greater government intervention.  Why?  Well, the first step will never achieve the ends that were intended.  In fact, it will always make matters worse.  The choice then is to step back and release control or take yet another step.  With each further step, the chances for an end to intervention decrease and it becomes less desirable for the government to get out of the way (doing so would be to admit the impotence of government, which would fly directly in the face of the thousands of pro-government theorists throughout the ages.)

The logical conclusion is obvious. Whatever the so-called benefits of government intervention in the economy, the path of these interventions always leads to totalitarianism, whether gradual or abrupt.  And since totalitarianism is the end of the market economy, the end result is misery for all - thus removing the claims of moral superiority by those who cheer government intervention.

For more on this problem research The Economic Calculation Problem of the Socialist Commonwealth by Ludwig Von Mises.

David in Qatar 

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#25) On June 24, 2009 at 3:17 PM, starbucks4ever (96.30) wrote:

Did he think he was superior to some of his countrymen?

Yes, I think he did. 

He instituted a New Deal, with differences only in the detail

Were the differences in detail huge?

Not really. 

Was his "New Deal" intended to be available to everyone in his country equally if needed?

Yes, as long as they belonged to the dominant ethnic group (there was a New Deal for the other ethnic groups as well - but a different kind of New Deal)

Did his "New deal" work out differently than FDR's?

Just as well, perhaps better. 

Did an American embarrass his a** in front of the whole world?

Irrelevant. 

Did that American have that opportunity because of, Keynes economic theorys aside and irrelevant, some Americans had reached out to help others fight for and win legal equality for all races?

Irrelevant again. 

Rather than apply the "pull up by your own bootstrap theory".

It was similar to "pull up by your bootstrap". 

Is economic theory the LEAST important consideration when comparing these two men?

Yes. 

Or do I have the wrong guy?

Yes. :):):) 

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#26) On June 24, 2009 at 3:28 PM, GNUBEE (24.37) wrote:

I was really sweating being called out on giving the answer.

Thanks David, It was thoroughly enjoyable

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#27) On June 24, 2009 at 3:35 PM, outoffocus (23.24) wrote:

Its funny because I figured it out about halfway through the comments then I got to your answer at the end.  Good post.

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#28) On June 24, 2009 at 3:53 PM, FleaBagger (28.21) wrote:

I think devoish has made his point, and missed David's. I don't doubt we shall soon see devoish labeling Hitler "right-wing" with the implication that he was pro-free markets and anti-welfare, as though being "mean" to the poor and being a genocidal tyrant are just two stops on the same metro line.

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#29) On June 24, 2009 at 6:11 PM, jahbu (84.50) wrote:

I remember when ol Bushy Wushy was scaryin the heck out of us with his terrorism rhetoric and justifying his attack on Iraq to protect the petro-dollar hegemony, a blogger did something similar to this post.

"An evil exists that threatens every man, women and child of this great nation.  We must take steps to ensure our domestic security and protect our Homeland" 

Sounded alot like Bushy justifying the Homeland Security Agency.

It wasnt Bushy, but Alolf Hitler proposing the Gestapo.

A famous man once said that history doesnt repeat, but ryhmes.

Thanks for the great post

Jahbu

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#30) On June 24, 2009 at 7:42 PM, devoish (96.00) wrote:

Comparing FDR to Hitler is a real stretch of the ideology.

Fleabagger,

Keep my thoughts to yourself. I'll speak them when I have them.

If you think I have missed Davids point, make it clear.

David.

You are against the bank bailouts, but you were not here then. Congress passed the bailouts under President Bush as advised by Hank Paulson. Should President Obama disregard the rule of law and claim to have the power to rescind that bailout, further concentrating power in the Presidency? Should President Obama disregard the rule of law and prevent the distribution of those bailout funds, further concentrating power in the hands of the Presidency?

You promote small Government with no model but within your imagination, but there are small governments that suck.

You are against concentrating more regulatory authority in the hands of the FED, but the most explosive years of the bubble happened when Fed rates were rising. Five investment banks were handed the ability to overwhelm interest rate increases by being allowed to lever at 40:1 from 12:1. And the Fed left hand did not know what the SEC right hand had done. Had those authorities been concentrated things might have turned out the same. Or not. All finance needs to answer to the same rules, in the same court, publicly and well known. President Obama's reforms are working toward that. No special players, not even you. Unfortunately insurers may be excepted.

The gold standard is no answer either. The 1929 collapse and depression happened with the gold standard in force. Unfortunately hoarding can easily grind an economy to a halt when there is so little gold for so many sales in such a large economy.

And certainly now is no time to switch back, when the thieves from finance are the ones with stolen cash to buy gold with.

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#31) On June 25, 2009 at 3:54 AM, whereaminow (< 20) wrote:

devoish,

I wasn't blogging when the bailouts happened. You are correct. But I have been here reading the articles since 2001. (I even had one of the old Motley Fool Visa cards from like 2002-ish.)  I was never interested in writing anything.  I never read the CAPS blogs. The bailouts changed that.  I started writing here after Richard Gibbons posted an article titled This Bailout is Great! on the front page.  That was the last straw.  I wrote a detailed response and that was that. 

My early blogging career, as anyone's, is a mixed bag of convoluted thoughts.  Although I still think my rebuttal to Gibbons was very well done.  A lot of other stuff sucked ass.  But when I concentrate on what I know - classical economics - I do well.

If it were up to me, George W. Bush and Hank Paulson would be in jail for life.  Period.  No possibility of parole.  Bush for the Iraq War.  Paulson for fraud on a massive scale.  They are liars and crooks of the highest order and I dream of the day that a million angry citizens descend upon their households and take them into custody (peacefully.)  

But that's not all.  There are probably another hundred or so that are as bad as those too... both in the financial sector and in Congress.  In a just world, they would also be caught, tried, convicted and sent to jail for life.

I agree that we will have no chance of changing our system until justice is served.  They got away with it.  That's all today's criminals need to see.  I'm sure they are hard at work robbing the ever-living-sh*t out of us right now, because they know that as long as they have friends in government nothing will happen to them.

Alas, what we are seeing is Mises' logical conclusions on intervention being played out right before our eyes.  Team Obama inherits a mess caused by the marriage of government and finance.  Instead of breaking that marriage, he puts them closer in bed together.  Intervention fails to achieve desired results and leads to more intervention.  Fascism leads to Socialism.  Socialism leads to totalitarianism. 

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#32) On June 25, 2009 at 5:18 AM, starbucks4ever (96.30) wrote:

"Fascism leads to Socialism.  Socialism leads to totalitarianism. "

If it were only that simple. How come then did the socialist system evolve back into capitalism? Take 1945 as your starting point, and then you'll come up with something like "totalitarianism leads to individualism. Individualism leads to democratization. Democratization leads to capitalism." Or maybe it's just a cyclical process and we're just going in circles... 

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