A couple of days ago, the New York Times published a piece by David Stockman in which he said that "we’ve had eight decades of increasingly frenetic fiscal and monetary policy activism intended to counter the cyclical bumps and grinds of the free market and its purported tendency to underproduce jobs and economic output. The toll has been heavy." However, he doesn't give any detailed comparison of economic performance before and after the United States started down the road to ruin, so here are figures for annual growth in per-capita GDP, from data originally compiled by Angus Maddison and maintained at the Maddison Project.
Mean Standard Deviation
1868-1929 1.82 4.81
1930-1946 2.36 11.71
1947-2010 1.92 2.46
The mean rates of growth are remarkably similar in the first and last period, despite all the other changes that have taken place in society. But the standard deviation is much smaller in the recent period, meaning that economic ups and downs have been less pronounced. For example, 2009 was the worst year for economic growth since 1947, at -4.3%. In the 1868-1929 period, there were four years that were worse than that, but also three years with a growth rate of more than 10%.
For this comparison, I set the years of depression and world war aside. According to Stockman, the change took place in 1933, when FDR "opted for fiat money (currency not fundamentally backed by gold), economic nationalism and capitalist cartels in agriculture and industry." So here is the comparison using 1933 as the dividing line.
Mean Standard Deviation
1868-1932 1.24 5.41
1933-2010 2.50 4.17
This way, there is a difference in the means, but not the standard deviations. By either comparison, the differences favor the age of frenetic activism.
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