Posted on 08/31/2009 5:43:26 PM PDT by RobinMasters
In times of economic crisis, the temptation for public officials to do something is both overwhelming and tremendously dangerous. UCLA’s Dr. Lee Ohanian makes that point plain in his latest research on the Great Depression and its primary causes, in which Herbert Hoover’s reputation as a free-market politician gets serious revision. Hoover’s deal with manufacturing giants to keep wages high turned what should have been a deep but temporary recession into an economic disaster:
Pro-labor policies pushed by President Herbert Hoover after the stock market crash of 1929 accounted for close to two-thirds of the drop in the nation’s gross domestic product over the two years that followed, causing what might otherwise have been a bad recession to slip into the Great Depression, a UCLA economist concludes in a new study.
“These findings suggest that the recession was three times worse — at a minimum — than it would otherwise have been, because of Hoover,” said Lee E. Ohanian, a UCLA professor of economics. …
After the crash, Hoover met with major leaders of industry and cut a deal with them to either maintain or raise wages and institute job-sharing to keep workers employed, at least to some degree, Ohanian found. In response, General Motors, Ford, U.S. Steel, Dupont, International Harvester and many other large firms fell in line, even publicly underscoring their compliance with Hoover’s program.
(Excerpt) Read more at hotair.com ...
When did he have that reputation? What a crock!
On TV and other Media outlets, there were many ads on how
to make money in real-estate.
And the FRB opened the spigot on real-estate loans,
It closed the spigot and started a new depression.
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