Sometimes government tries to fix the problem; then it makes the problem worse.
In 2004, economists at the University of California, Los Angeles (UCLA), studied the policies of President Franklin Roosevelt's New Deal and determined it actually 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.
Cole and Ohanian asserted that Roosevelt thought excessive business competition led to low prices and wages, adding to the severity of the Depression.
"[Roosevelt] 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," Cole said in a press release dated Aug. 10, 2004.
The professors paid particular attention to the National Industrial Recovery Act (NIRA) and the effect it had on competition. Passed in June 1933, the NIRA required companies to write industry-wide fair competition codes that fixed prices and wages, established production quotas, and imposed restrictions on companies if they wanted to enter into alliances, according to OurDocuments.gov.
The Supreme Court declared the NIRA unconstitutional two years after it was passed, but Cole and Ohanian said that the act caused enough damage during those two years leading to even more regulation.
—Paul Detrick is a research analyst at the Business & Media Institute.
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"UCLA Economists:
October 27, 2008 - 15:42 ET by Chris Norman"ULA Economists: Government Intervention Prolonged Great Depression"
This won't get reported, but on the oft chance that it was, these guys would be tarred with the same brush as "Global Warming Deniers".
McNotObama '08
But Chris, that's only
October 27, 2008 - 16:01 ET by motherbeltBut Chris, that's only because that was the wrong government!
When Obama is President everything that he does, even if it never worked before, will have amazing results, because he is the RIGHT person, the Lightworker, who is going to save the country AND the world!! (He said so himself!)
mb, That, and more
October 27, 2008 - 16:05 ET by Chris Normanmb,
That, and more money!
McNotObama '08
I said thes below. Both
October 27, 2008 - 15:48 ET by mattmBoth Hoover and FDR turned what was basically a market correction into a depression.
Must read, by Robert Higgs.
Wont happen again....see my
October 27, 2008 - 16:02 ET by motherbeltWont happen again....see my explanation to Chris above. ;-)
Government Intervention Prolonged Great Depression
October 27, 2008 - 16:16 ET by Joe C.Duh!
The problem was that Hoover - a champion of free-markets and efficiency - after "The Crash" and the resultant recession as well as slipping political support, latched on to the "progressive" doctrine sweeping Russia, Europe, and the academic and press intelligentsia. His protectionism (Taft-Hartley) and increased taxes worsened the recession, which led FDR to run against the Hoover economy - although he planned to do the same thing, and then some - blaming the rich and Wall St.
FDR won comfortably (with a Dem House majority and filibuster proof Dem Senate), then instituted confiscatory tax rates, a demand economy, Davis-Bacon (strengthening unions), and packed the Supreme Court after it ruled his "New Deal" unconstitutional, which was later overturned. This resulted in The Great Depression for which we are still paying today.
Does any of this sound familiar?
Quite familiar. But the inevitable reply will be...
October 28, 2008 - 11:15 ET by JohnMcGrew...that the only reason the "New Deal" didn't really work was because it didn't go far enough. The last time around, we only micromanaged big business. Now they're ready to micromanage everyone, and we'll have a president who will not be ashamed to say that we must "spread the wealth", and a congress that has already signaled that it's ready to do so.
My question is, are Cole
October 27, 2008 - 17:21 ET by R D HelmMy question is, are Cole and Ohanian still UCLA economists?
Or have they been banished to the academic netherworld?
-Dave
In order for wealth to be spread, it first must be seized.
I guess the economists
October 27, 2008 - 18:05 ET by MrDebaterat UCLA finally got aroung to reading the book "THE FORGOTTEN MAN"...DUH....
Nice Article - I posted it on a Military Thread
October 27, 2008 - 18:35 ET by ZachJonesIsHomeGreat. I posted it on a military thread I maintain. Credit given with link here. The following article links to a great economics lesson set at a bar and 10 patrons. See Below:
Will America
follow a course steeped in ideology tempered by history or will she follow a
course steeped mainly in ideology? “Nine-tenths
of wisdom is being wise in time. “ Theodore Roosevelt - Please consider: Americans Might Want To Heed the Admonitions of The Past
Regarding Election at -http://zachjonesishome.wordpress.com/2008/10/25/americans-might-want-to-heed-the-admonitions-of-the-past-regarding-election/
zachjonesishome.wordpress.com
20th Century Lesson: Socialism Doesn't Work
October 28, 2008 - 13:02 ET by deerjerkydaveA major lesson learned by history during the 20th century is that socialism doesn't work. It looks great on paper and it has been tried to varying degrees and the conclusion is that it is bad for economies, bad for jobs, bad for equality, and bad for freedom.
It is, however, good for power hungry politicians. Which is why we continue to see it peddled to the masses by politicians.