- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -

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

Posted By Conn Carroll On November 24, 2008 @ 1:52 pm In Economics | Comments Disabled

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. [1]” Well someone might want to tell George Mason University economics professor Tyler Cowen [2] that he’s now officially part of the Vast Rightwing Conspiracy. He writes for the New York Times [3]:

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. [4] Strengthening unions to destroy job creation. Check [5].

Maybe Obama really is the new FDR [6].


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2008/11/24/the-worst-of-the-old-new-deal-still-part-of-new-new-deal/

URLs in this post:

[1] favored pasttime of activists on the radical right.: http://pr.thinkprogress.org/2008/11/pr20081124/index.html

[2] George Mason University economics professor Tyler Cowen: http://www.marginalrevolution.com/marginalrevolution/

[3] New York Times: http://www.nytimes.com/2008/11/23/business/23view.html?_r=3&oref=slogin&partner=permalink&exprod=permalink&pagewanted=print

[4] Cartelizing entire industries. Check.: http://www.latimes.com/news/politics/la-fi-autobailout24-2008nov24,0,3918568.story

[5] Strengthening unions to destroy job creation. Check: http://thehill.com/leading-the-news/obama-renews-promise-on-nafta-card-check-2008-09-01.html

[6] Maybe Obama really is the new FDR: http://www.time.com/time/covers/0,16641,20081124,00.html

Copyright © 2011 The Heritage Foundation. All rights reserved.