Wednesday, October 08, 2008

An Interesting View of the New Deal

From the UCLA Newsroom:

Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.

After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years...

"President Roosevelt believed that excessive competition was responsible for the Depression by reducing prices and wages, and by extension reducing employment and demand for goods and services," said Cole, also a UCLA professor of economics. "So he came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies."

We should be wary of such policies, especially today.


Ellen K said...

Let's see, if you control the income of the population, then you can divert them from the frivolity of politics because they are too busy trying to survive to question what is being done to them. Why does this not comfort me?

Chanman said...

My favorite part of the New Deal was when FDR had tons of crops plowed under and destroyed and millions of livestock killed in an attempt to prop up farm prices. All this while people were going hungry.

Oh, and don't forget that if you wanted to keep your job in the CCC or WPA, you had better vote Democrat or you would find yourself back out on the street. Yes, that actually happened.

David said...

It would have been nice for the university to reference to work of Amity Shlaes, who published a book on this very subject about 2 years ago.

allen (in Michigan) said...

This info's been around for a while, you just have to know where to look for it.

One apocryphal story similar to the plowing under of crops is the Baltimore barber who was prosecute by the federal government for charging fifteen cents for a haircut rather then the mandated twenty-five cents.

Also, the CCC and WPA were well known for widespread corruption and then there's FDRs indifference to racism. The Tuskegee Airmen didn't get into the war until Eleanor Roosevelt discovered them and the longest-training fighter pilots in the U.S. military were finally committed to battle.

And then there's Woodrow Wilson's overt and unapologetic racism. Screen "Birth of a Nation" in the White House and racially-cleansed the federal government.

There's more but why bother? The party of the Ku Klux Klan gets an on-going pass from the media.

Ellen K said...

So I divert the population from frivolities because they are just trying to survive....okay, now I am really worried. I may start stockpiling canned goods. And buy a gun-for me.