Posted on 06/02/2009 10:42:17 AM PDT by bs9021
New Deal Reality Check
by: Malcolm A. Kline, June 02, 2009
As self-proclaimed intellectuals get embarassingly excited over the prospect of a new, New Deal, the rest of us would do well to take every opportunity to examine how the first one turned out. For one thing, it didn’t start under Roosevelt.
In The Politically Incorrect Guide To The Great Depression And The New Deal, economist Robert P. Murphy, Ph. D., gives us a very useful comparison of what happened in another recession that occurred in the 1920s when so-called laissez-faire economics was practiced and the more famous economic collapse when it wasn’t.
“The annual unemployment rate peaked at 11.7 percent in 1921, but it had fallen to 6.7 percent by the following year, and was down to an incredible 2.4 percent by 1923,” Murphy writes. “That is how a market with flexible wages and prices quickly corrects itself after a Fed-induced inflationary boom.”
“But because the ‘compassionate’ Hoover forbade businesses from cutting wages after the 1929 crash, unemployment went up and up and up, hitting the unimaginable peak of 28.33 percent in March 1933.” “Compassionate conservatism,” then, is not a terribly new deal either.
“During every single year of the Roaring ‘20s, the federal government had run budget surpluses, which it used both to justify [U. S. Secretary of the Treasury Andrew] Mellon’s bold tax cuts as well as retire a large portion of the public debt,” Murphy relates. “(Following the massive borrowing needed for World War I, the federal government paid down the debt from $25.5 billion in FY [Fiscal Year] 1919 to $16.2 billion in FY 1930.)”....
(Excerpt) Read more at campusreportonline.net ...
The “New Deal” was largely responsible for the “Great Depression”.
The Depression was finally solved by Adolf Hitler and Admiral Hirohito, Roosevelt had nothing to do with the solution as he was the chief architect of that economic disaster.
Read more about it from Murray Rothbard’s brilliant analysis:
http://www.mises.org/rothbard/agd.pdf
bfl
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