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  • The Ghost of New Deal Pork

    The “cash for clunkers” plan recently proposed in Congress would provide a subsidy for a new car purchase to anyone willing to have their current car destroyed. But the economic rationale is eerily similar to the New Deal program most widely agreed to be a catastrophic failure: FDR’s agriculture plan that slaughtered pigs. The reasoning goes like this:

    Crushing the old car has two benefits. First, it ensures that the consumer’s purchase of a more efficient vehicle actually has a net environmental benefit. Second, it prevents a glut of used cars on the market, which would reduce trade-in values for new car buyers, which would cut into the sales incentive effect.

    This was the same misguided reasoning that led to the slaughter of six million pigs and plowing under of about half the crop area under cultivation. The head of the Agricultural Adjustment Administration argued that:

    People who believe that we ordered the destruction of food are merely the victims of their prejudices and the misinformation that has been fed to them by interested persons. What we actually did was to stop the destruction of foodstuffs by making it worth while for farmers to sell them rather than to destroy them.

    In other words, the destruction of crops and livestock would ultimately lead to less waste because prices would be lifted, and so farmers would have more incentive to produce. However, despite vigorous defense by the administration, it is now known that most of the meat went to waste and it was an abysmal failure. Government cannot do a better job than the market in setting prices, and government’s destruction of output will never lead to increased output. It was a failure of economic reasoning – which is now coming back in vogue.

    Posted in Ongoing Priorities [slideshow_deploy]

    10 Responses to The Ghost of New Deal Pork

    1. Kristina, Gloucester VA says:

      We can banter about facts all day about what will get this economy moving – and relate historical evidence to back up what works. The problem we have is that we have factions in government and in society that don’t want the economy to get moving. “That would be unfair.” That would mean that the successful will succeed- ie., earn more money. The successful shouldn’t be allowed to earn more money because they will not spend it wisely on social programs like the benevolent government. They will buy things like corporate jets and fancy spa vacations – which, of course in no way will benefit the “common” man or “working class”. The common man cannot afford such things therefore how dare the rich spend money on such frivolities. The seekers of ultimate benevolence (those of clean hearts who live in shacks and give their hard earned millions to the poor and downtrodded) disdain such frivolous spending, and completely ignore the fact that the “workers” of this country just happen to be the ones who WORK on BUILDING such frivolous things as CORPORATE JETS AND some WORK AT SPA RESORTS. Our economy is faltering, in part, because those with money have been either “shamed” in to not spending it by the captains of moral benevolent care, or are scared to spend (ie. invest) because their previous investments have been destroyed by the same enlightened people.

    2. Alyce, California says:

      OMG!!! Will anyone in DC ever learn from our past

      mistakes??? I strongly suggest that Pres. Obama AND his entire new administration set aside their

      selfish personal agendas, seriously study FDR's

      mistakes and failed policies ( his policies caused

      a prolonged delay in the recovery of the Great Depression ). Then, MAYBE they will do the RIGHT things to put our country on a positive track!!!

      Don't everybody hold your breath, but you'd BETTER

      do alot of praying!!!! I remember the Depression–

      it was definitely no " tea party "!!!!

    3. Barb -mn says:

      /stop the farming subsidies now! If farmers can't do the job without taking from taxpayers, we'll raise our own food. Everyone with a yard with access to raise their own should get subsidies. Or take the subsidies away. Fair is fair. Farmers shouldn't be taking away from us twice and in spite of subsidies, unfairly continue to raise the cost. Where there is greed, there is dishonesty. And where there is GOVERNMENT, there is short cuts. Don't worry about subsidized farmers. They're living off the hog!

      STOP THE FARMING SUBSIDIES NOW!

    4. Ralph Goff, Portland says:

      The Ghost of the Past

      Obama claims to be related to everyone by DNA, he does not care about the New Deal or Lincoln. Obama only what’s to claim their fame and power as they relate to history. Remember he is half White, Black, Christian, Muslim, and FDR-Lincoln all in one he does not have his own identity. However, if one was paying real attention they would know that Obama’s New Deal play book was written by W.E.B Dubois, “The Ghost of Obama’s Past” who was half White and Black, president and founder of the NAACP, author of Black and Red. Dubois graduated from the same Universities as Obama, Columbia U. and Harvard. Dubois also conducted the Kenyan experiment, can you say; “Who’s Your Daddy”? National Association for the Advancement of the Communist Party was its original name, but outrage forced it to change to Colored People. It was established by liberal whites and blacks. While Saul Alinsky wrote the rules, Dubois wrote the playbook. I just wonder when Obama is going to set wage limits on Sports Figures, R&B singers, Hollywood actors, Trial Lawyers, these are businesses also and on the amount paid for Super bowel commercials.

    5. Ralph Goff, Portland says:

      The Ghost of the Past Pork

      Pres. Obama claims to be related to everyone by DNA, he does not care about the New Deal or Lincoln. Pres. Obama only what’s to claim their fame and power as they relate to history. Remember he is half White, Black, Christian, Muslim, and FDR-Lincoln all in one he does not have his own identity. However, if one was paying real attention they would know that Pres. Obama’s New Deal play book was written by W.E.B Dubois, “The Ghost of Obama’s Past” who was half White and Black, president and founder of the NAACP, author of Black and Red. Dubois graduated from the same Universities as Obama, Columbia U. and Harvard. Dubois also conducted the Kenyan experiment, can you say; “Who’s Your Daddy”? National Association for the Advancement of the Communist Party was its original name, but outrage forced it to change to Colored People. It was established by liberal whites and blacks. While Saul Alinsky wrote the rules, Dubois wrote the playbook. I just wonder when Obama is going to set wage limits on Sports Figures, R&B singers, Hollywood actors, Trial Lawyers, these are businesses also and on the amount paid for Super bowel commercials.

    6. james Minooka IL says:

      follow the money …I bet the george soros the democratic money man is manipulating the whole economy …he's done it before…. any real reporters willing to take him on?? lets get on the ball 2010 !!!

    7. John Theobald, Marie says:

      Clearly Obama, Pelosi and Reid watch way too many 3 Stooges marathons on cable TV. It is obvious they get all their best ideas (AKA lame brain) from Larry, Curly and Moe. Apologies to Larry, Curly and Moe…

      "There is no King, who, with sufficient force, is not always ready to make himself absolute." –Thomas Jefferson

    8. chuck, pine bluffs w says:

      If this goes thru, we'll become the next socilist regime in the world… perhaps the USSA vice the USA. That's whats going to happen.

      Big brother has always screwed-up in the private sector. Pick any topic and they have always over spent our money for their new toys, gagets, bells, whistles, etc…

    9. duelles says:

      It is funny, this whole political scene. Just as Hoover tried some of the failed policies expanded by FDR, Nixon and Ford tried some goofy Keynesian policies that may have contributed to Carter’s disastrous term. Bush’s rebates were were non starters and $350 billion simply “wasn’t enough” nor was FDR’s $30 billion during the depression according to the Paul Krugman apologist. The Keynes thing didn’t work since they never spent enough money. Sort of like Communism never working since the Soviets never tried pure Communism.
      Idiots.
      Tax cheats and Lobbyists in the ethical cabinet. Hope and change, my ass!
      I will continue to add value to goods and service, creating money for the sloths and mindless to steal from me in the beautiful confiscatory way that they have perfected.
      If these guys like Daschle work and serve me, I’m doomed. I can’t wait until 2020 when they try to bail out Social Security,and medicare with $ 200 trillion or so.
      Idiots!
      Fix the banks, regulate derivatives, suspend mark-to-market and lets move on.
      Anyone ever ask Clinton about that bridge to the 21st century, so well engineered, is holding up.
      Idiot.

    10. Roger Hodges says:

      We all blog, read, discuss the results of this so called stimulus plan. Obama and the rest of the socialist liberals in Washington are doing nothing but making a mockery of the Constitution and the Declaration of Independace on a daily basis. Lib politicians not paying taxes, Secretary of State in position to do favors for Foreign entities, etc. Obama has done nothing but lie from day one and they had better wake up. But the real reason for this is my disgust for what is supposed to be my NEWS. This whole industry is in bed with Obama, willing to discredit any negative truth brought to light by any one that has the dignity to report that truth. No one has even really demanded that the real truth to why we are in this mess to begin with be brought to light and the CRIMINALS brought to justice.

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