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  • The Worst of the Old New Deal Still Part of New New Deal

    According to The Center for American Progress, pointing out that much of FDR’s New Deal only prolonged the Great Depression is just a “favored pasttime of activists on the radical right.” Well someone might want to tell George Mason University economics professor Tyler Cowen that he’s now officially part of the Vast Rightwing Conspiracy. He writes for the New York Times:

    Many people are looking back to the Great Depression and the New Deal for answers to our problems. But while we can learn important lessons from this period, they’re not always the ones taught in school.

    The traditional story is that President Franklin D. Roosevelt rescued capitalism by resorting to extensive government intervention; the truth is that Roosevelt changed course from year to year, trying a mix of policies, some good and some bad. It’s worth sorting through this grab bag now, to evaluate whether any of these policies might be helpful.

    Roosevelt instituted a disastrous legacy of agricultural subsidies and sought to cartelize industry, backed by force of law. Neither policy helped the economy recover. He also took steps to strengthen unions and to keep real wages high. This helped workers who had jobs, but made it much harder for the unemployed to get back to work. One result was unemployment rates that remained high throughout the New Deal period.

    Massive subsidies for favored industries. Check.
    Cartelizing entire industries. Check. Strengthening unions to destroy job creation. Check.

    Maybe Obama really is the new FDR.

    Posted in Economics [slideshow_deploy]

    One Response to The Worst of the Old New Deal Still Part of New New Deal

    1. Bill, Kansas says:

      Which begs the question – how much did Roosevelt really know about the planned attack on Pearl Harbor prior to its implementation? History does tell us that WWII boosted American business and industry to startling new levels. The retooling for the war effort lifted the US out of the depression, employing tens of millions who would have otherwise continued to struggle. Besides, there was a growing facist element in the US that was beginning to startle American leadership. If "something" wasn't done, there was real fear of a "turnover" in government.

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