Posted on 10/31/2008 3:56:50 AM PDT by NavVet
Those who ignore history are doomed to repeat it.
In 2004, economists at the University of California, Los Angeles (UCLA), studied the policies of President Franklin Roosevelt’s New Deal and determined his policies prolonged the Depression by seven years.
Harold L. Cole and Lee E. Ohanian blamed anti-free market measures for the slow recovery in an article published in the August 2004 issue of the Journal of Political Economy
(Excerpt) Read more at businessandmedia.org ...
Will you post this on DIGG? the boyz over there need to understand that their Messiah is lame.
I’m not familiar with DIGG.
Actually, it was Hoover's interventionist policies, following Kenesyian Economic theory, that allowed the Depression to continue and FDR just added to it.
In 1938, unemployment was at 25%, the same level it was in 1931.
fdr was a socialist... stalin’s good buddy... and McCarthy was right all along also!
LLS
Government interference in the free interactions of people(the market) are always an attempt to cheat reality. Insane and childish. It’s a game of let’s pretend. Let’s pretend that everyone has earned and can afford a house. Let’s pretend that everyone is equally credit worhty. Let’s take money from some people and give it to others so we all can pretend that they are prosperous.
You can fool reality only for so long. Then it all comes crashing down. The bailout is one more attempt to pretend. CRASH!
No, not really. The Fed failed, is what happened. It dropped the ball. Compare that to now when the Fed is ensuring liquidity. Now, FDR’s legislative increase in the price of labor (social security taxes) made labor more expensive, and that didn’t help unemployment. Neither did the wide ranging set of regulations implemented make it easier for business to profit. Read Schlaes book before you spout off.
Did Hoover’s increase of tax rates on the eeeeeevil rich from 20% to 61% play a part?
And before you 'spout off' read M. Rothbard's work on the Great Depression.
Hoover kept the Depression going with Gov't interventionism and FDR, who ran on returning to balanced budgets, just added to what Hoover had begun.
The Great Depression was the RESULT of Goverment, not market failures, with its start at the Fed, which kept prices stable during the 20's when they should have been dropping (causing inflation and malinvestiment) to the attempts by the Gov't to 'fix' what it had caused with further intervention, including the Smoot-Hawley act which raised tarrifs by 50%.
At the end of last week, the government announced that insurance companies were next to be bailed out. It became clear that firms were lining up making the claim that they too deserved government help. The effect that Higgs had written about feels palpable right now. When you know the government can save your company and your bottom line, you start spending an increasing amount of time on that possibility rather than trying to actually turn things around or look for private suitors. When you're not sure about the rules of the game, risk-taking and investing becomes much more uncertain than usual.
In today's WSJ, I argue that government policy appears to be making things worse and that doing nothing, at least for a time, is probably better. Of course, government has a problem with credible commitment. Doing nothing cannot be guaranteed to last for very long. And unfortunately, neither presidential candidate has a commitment even to the principle that doing nothing might be the best policy. Such a principle might make a commitment to inaction somewhat credible. But even though the commitment to do nothing might be only temporary, I think it still would be useful for alternative strategies to the current one (so something, anything) to emerge and generate a consensus as to whether such alternatives might be preferable to the current scattershot approach of doing one thing today and something else tomorrow. Such uncertainty has to effect the calculus of risk-taking.
‘’’’’’’’’’’’’’’’’’’’’’’’’’’’’’’
Would you play in a poker game where the rules of which cards to hold keep changing?
Would you build a house on shifting sands?
Would you pay 50 million dollars for a new factory when your market might be changed by law, next year, or the year after?
If you knew you could get 5%, 15% more bailout money, wouldn't you wait around, not do anything, until you got bailed out?
Why go to work, when by not working you can get cash, an apartment, healthcare, and wake up at noon, hang out and get a cash job? That's way better than paying for apartment, working for de man, taking crap from customers, getting up.
Government at work.
But everyone was voting Democrat, so progress was actually being made....
Actually I’ve read Friedman, and find his account persuasive. You can keep your anarcho-capitalism thank you very much.
This has nothing to do with 'anarcho-capitialism', which is a political movement, this has to do with sound economics.
Paul Johnson wrote about it in his work, 'The History of America'.
The Great Depression was caused by Government and kept going by Government.
Yea, it was amazing how the people kept voting for FDR.
The Democrats did take a beating in the 1936 year elections, with Republicans running against the New Deal and winning many seats.
That was when FDR switched his attentions to foreign policy and the New Deal faded away until Truman came along with his 'Fair Deal' nonsense.
I've read Friedman myself and the problem with the Monterist school is that they believe in stable prices, which in a free market is impossible.
By keeping prices 'stable' during the 20's, they did not allow what should have happened, which was price drops due to increase manufacture.
So, the Fed was actually inflating, and causing a 'boom' even though it wasn't showing up in price increases.
Friedman blames the Fed for excessive tightening, but that was only the RESULT of the previous 'boom' which led to excessive credit expansion.
The Monterist school thinks that the Government can fine tune the money/credit supply, but they function under the same laws of supply and demand as any other good.
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