This story was previously titled "Regarding the Stimulus - FDR's policies prolonged Depression by 7 years, UCLA economists calculate"
Regarding the Stimulus - FDR's policies prolonged Depression by 7 years, UCLA economists calculate »
Posted By pc25 1 month ago in News
FDR's policies prolonged Depression by 7 years,
Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.
After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.
"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."
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pc251 month ago
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FTA
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"The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened."
-UCLA--
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Beau78901 month ago
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Do you read your own submissions, pc?
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From the article:
In an article in the August issue of the Journal of Political Economy, Ohanian and Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law June 16, 1933.
"President Roosevelt believed that excessive competition was responsible for the Depression by reducing prices and wages, and by extension reducing employment and demand for goods and services," said Cole, also a UCLA professor of economics. "So he 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." [Emphasis mine.]
This is not a policy Obama has supported or will support. In fact, he appears to stand against industry collusion in every form and to be reevaluating previous administrations' blatant disregard of existing antitrust legislation. He and Congress also favor breaking up businesses that have grown "too big to fail" and that wield too much power over the marketplace.
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pc251 month ago
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you have to love this cover in light of this
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http://img.timeinc.net/time/magazine/archive/cover...
just goes to show you, the clueless, in the tank, Obama worshiping, enabling, MSM can't in 20/20 hindsight even get history right. -
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pc251 month ago
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The first package worked so well they are talking about another one, to try to fix the damage the first one did.....
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http://www.humanevents.com/article.php?id=33926
As Democrats consider another round of so-called stimulus spending, Republicans on the House Committee on Ways and Means have compiled a stark assessment of the job losses since the first one began, measured by President Obama’s own set of rosy predictions of jobs “created or saved” in the earlier stages of his spending spree.
Back in February, while framing the argument in favor of passage of the “stimulus” bill, the White House released its state-by-state estimates (pdf) on the impact of the American Recovery and Reinvestment Act a.k.a. the “stimulus” spending bill. The report promised 3.5 million jobs “saved or created” -- 90 percent in the private sector.
Yet the Department of Labor’s own payroll employment data through August 2009 (the latest available) reflects that America continues to bleed jobs at a colossal rate. Only one area of the country has actually come close to surpassing only half of the estimate put forth by the president: Washington, D.C. -
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truthiness1 month ago
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it is probable that the cycle of crash to boom would have turned faster without FDR's policies. However, the amount of human suffering during the crash cycle would have been greatly increased, which was what FDR was working to avoid, more so than helping big business. There also would have been far greater instability in the market in the years following FDR's admin if not for the managed economy. This is why Nixon said, "We're all Keynesians now."
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Striker1011 month ago
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by Henry Hazlitt "Economics in One Lesson" first copyrighted 1946, clearly explained the negative effects of minimum and union manipulated wages, price controls and other manipulations. Hazlitt discussed the effects without specifically targeting FDR's attempts at manipulation, yet stated the effects which has taken 2 UCLA economic researchers all these years to "rediscover".
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A high-school class of econ001 using this as course textbook would save many people from such unreasoned mistakes. People like Droppers bubba2 DenCuddy Mystic_Moldovan and fiftynine. -
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engineer1 month ago
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http://www.truthdig.com/report/item/20090101_fdr_p...
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FTA
"According to Federal Reserve Chairman Ben Bernanke, “Only with the New Deal’s rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression.” In fact, even famed conservative economist Milton Friedman admitted that the New Deal’s Federal Deposit Insurance Corp. was “the structural change most conducive to monetary stability since ... the Civil War.”
OK—if the verifiable evidence proves the New Deal did not prolong the Depression, what about historians—do they “pretty much agree” on the opposite?
Again, no.
As Newsweek’s Daniel Gross reports, “One would be very hard-pressed to find a serious professional historian who believes that the New Deal prolonged the Depression.”" -
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canadianrancher571 month ago
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First of all I don't have much use for economists, and the article dealt with some of the policies of the new deal but likely missed out on some of them. When it comes to government stimulus I can't say that I'm 100 percent against them as long as they show a net gain to the country. Some of FDR's policies did aid the country and may not in the short term looked beneficial, The building of roads and infrastructure aided the country by opening the country up to transportation which was a long term effect. when these economists looked at growth did they maybe factor in things like the benefits that where gained by the economy from some of the government spending. If the economy had to spend money out of the gain in production would of the gains been as large and would some of the projects even been attempted at all.
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To me the biggest problem with FDR's stimulus idea has more to do with the acceptance by politicians and society that government must come to the aid of the economy or even to the aid of certain sectors of the economy during corrections.
As for the present round of stimulus ideas, I'm not in favor of any of them, the bank and auto bailouts rewarded poor management, the cash for clunkers idea was just another bailout, and so far most ideas are not going to ever show a net gain to the country.
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