Posted on 03/14/2009 9:48:26 PM PDT by ReformationFan
Two UCLA economists are blaming the length of the Great Depression on President Franklin D. Roosevelt, who instead of being blamed has always been thought of as the main catalyst who brought the country out of the Depression. Instead, in the August issue of the Journal of Political Economy, Harold L. Cole and Lee E. Ohanian conclude that the New Deal policies FDR signed into law thwarted economic recovery for the country. See UCLA Newsroom.
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.
"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies." [emphasis mine.]
"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."
My question is, does the scenario the economists talk about in the second paragraph sound familiar? Throwing stimulus plans at the depression apparently didn't help in the 1930's and it won't help today. These findings certainly don't inspire confidence in our current policies, especially since a second stimulus is being considered, at least by Nancy Pelosi. Pelosi said this week that she's keeping the door open for a second stimulus bill. See Politico.
Interestingly enough, a poll by Rasmussen just found that a majority of Americans (53%) now believe that the U.S. is somewhat likely to enter a 1930's-like depression within the next few years. These results are definitely more pessimistic than those of early January when only 44% of those surveyed thought a depression was likely.
Definitely falls in the “No, duh” category.
BTW, this article came out in August 2004.
When Obama raises taxes on the rich, that is the wealth transfer act.
NONE OF THIS has anything to do with economic recovery.
Its a takeover by the far left.
The economy was poised for a six to 10 month recovery, but that recovery is being stalled by the misguided policies of Pelosi, Reid, Frank and Obama.
Now it will probably take as long as it did last time.
It's like a bunch of gradeschoolers are running things.
That's an odd way of putting it. The "collusion" was carried out by the National Recovery Administration which attempted to set prices throughout the economy.
for a little more reinforcement
read
jim powell’s “fdr’s folly”
He gives 1000’s of examples where roosevelt’s policies made everything worse.
No surprise- he was a rat.
That never made any sense, and in today's economic climate, FDR's wrong headed policies need to dismissed as the depression prolonging mistakes they were.
Let’s not forget that FDR also dragged us needlessly into war. He provoked Hitler by giving weapons to Britain. He also had U.S. warships escort the British freighters carrying the weapons. FDR was hoping that a German submarine would sink an American ship and give him an excuse for war. He was a manipulative liar and a bastard. In terms of the wars that were entered, GWB was much more honorable and exercised countless more restraint than FDR, but one is vilified and the other beatified. Just goes to show you who writes the history books.
I have done much research. I do not believe that FDR prolonged the depression. Much of what FDR did was to keep people going until the depression was over...he saved the country from a Hitler or a Stalin. Obviously the American people don’t agree with these economists with their fake date, the elected Roosevelt four times. One should not revise history to suit a particular political persuasion. It is what it is. As for Britain, do you think we should have let that country fall to Germany? Are you crazy or what? People do not understand we came close to losing WWII.
Also, as for Iraq, I would have been much happier if Pres. Bush had followed the Powell doctrine...overwhelm the enemy. Put any who resisted up against the wall and shoot them. I hate politically correct wars which never really go away...Korea, Vietnam and Bosnia are great examples. Defeat your enemy completely. Be willing to wage a tough war with the understanding that civilians will die; they always do and win the war-no peace agreements and no surrender.
The Federal Reserve (which is not Federal) intentionally created the depression by constricting the money supply. Caveat le bankers.
In your research have you figured out why other countries, such as Canada and Britain, came out of the depression so much sooner than America?
You say you have done much research. I like researching also. Let me refer a couple things I have found useful on the Depression:
Lawrence Reed's Myths of the Great Depression. There is also an interview with Mike Rosen on the book.
Sheldon Richman's article FDR Didn't Restore Prosperity.
An article in the Wall Street Journal by the authors of the study discussed above is here.
Good article by Robert Higgs, always a good read, with his reasons why FDR made the depression worse, on libertyforlife.com .
And a lifetime education on mises.org . There are many articles here by various well-known writers on different aspects of the Depression.
These authors do not agree that FDR's policies improved the economy, and coming from a free-market perspective, I find them very persuasive.
It’s politics. You simply can’t give away the Treasury to Wall Street and then do nothing anywhere else.
These authors all have political axes to grind...so it’s skewed...I looked at the raw data...what’s available and read everyone. There is no reason to believe this...In my opinion this amounts to a defense of Wall Street’s first leap into the economic destruction of the US economy with risky trading policies. This time they invented economic products like derivatives that have bankrupted this country.
The first country to come out of the depression was Sweden who used a pure Keynesian approach. As for Great Britain...times were very bad there until they started preparing for war. As for Canada, they were very hard hit by the depression worse than Europe and they did not recover before the US.
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