A Fiscal Stimulus Turkey

From A Brief History of Black Friday:

In 1939, the Retail Dry Goods Association warned Franklin Roosevelt that if the holiday season wouldn't begin until after Americans celebrated Thanksgiving on the traditional final Thursday in November, retail sales would go in the tank. Ever the iconoclast, Roosevelt saw an easy solution to this problem: he moved Thanksgiving up by a week.

Roosevelt didn't make the announcement until late October, and by then most Americans had already made their holiday travel plans. Many rebelled and continued to celebrate Thanksgiving on its "real" date while derisively referring to the impostor holiday as "Franksgiving." State governments didn't know which Thanksgiving to observe, so some of them took both days off. In short, it was a bit of a mess.

Trying to increase spending by moving Thanksgiving up a week?  Dumb.  But really, is this so different than say cash for clunkers?  Hat tip: Boing Boing.

Comments

Yes Alex, it is so different that you would have to be an economist of your weird persuasion to see the analogy. The only point of similarity is the motivation - the desire to speed up consumer spending. None of the downside you cited (or people objected to) for moving Thanksgiving pertains.

If you really want an analogy, try daylight saving time. Similar motivation, and similarly annoying the hell out of a big chunk of the population. Unlike Franksgiving and C for C, of course, it is intended to cause a long term rather than a temporary increase in consumption, so is quite stupid on Keynesian grounds.

"But really, is this so different than say cash for clunkers?"

Umm...yes?...

"Any time the government believes it can turn an economy around simply by attempting to trick the citizens into spending more, that government is deluding itself."

Half true. The government cannot turn the economy around, but tricking consumers into spending more doesn't seem that difficult a feat where Americans are concerned.

>But really, is this so different than say cash for clunkers?

Dramatically and markedly, yes, it is. C4C cost billions of taxpayer dollars.

What, you haven't read about the plans for Christmas II?

The Chinese President on C4C:
"You are not allowed to pay us back in clunkers."

OK, that is not the real Chinese president speaking, but I suspect the real one also won't take clunkers.

The "press conference" here:

http://www.liveleak.com/view?i=d9c_1258865433

John - [At best it would have] moved spending earlier and reduced it later with little net effect

I continue to be amazed at how you (and Alex) continue to buy into the superstition that there is nothing to be done about the lost production from massive unemployment. Loss of production causes a long term loss of GDP for everybody. When nobody can afford to borrow to create jobs and production except the government, it makes perfect sense for the government to do so.

It's amazing how much your head can clear when you stop smoking that RBC crack. You should try it.

Doc M,

You should try comparing your ideas to the real world sometimes. There is no shortage of borrowable funds in the world - look at the price of treasuries. What there is is fear - fear that any private borrower is likely to default. Following your prescription produces the familiar death spiral of a panic that ensures that many of them will. We came very close to one of the worst in modern history last fall.

Try reading some economic history.

I think FDR is back in the whitehouse, younger, ambulatory,but clearly his pedigree is on the expanded state.

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