FDR's policies prolonged Depression by 7 years, UCLA economists calculate
Submitted by xntryk1 on Mon, 10/20/2008 - 12:53
8/10/2004 12:23:12 PM
FDR's policies prolonged Depression by 7 years, UCLA economists calculate
By Meg Sullivan
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."
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."
Continue at: http://tinyurl.com/44ysum
Hang on...
we're likely to get a new "new deal." we're already seeing unprecedented actions taken within the banking system. it's not good.
Laissez-faire Blog
Laissez-faire
A surprising admission, but...
Letting him off the hook for only seven years of the depression? Get serious! It lasted until 1946.
-jcr
"The problem with trying to child-proof the world, is that it makes people neglect the far more important task of world-proofing the child." -- Hugh Daniel
bump
digg #11
http://digg.com/politics/...
http://digg.com/politics/FDR_s_Policies_Prolonged_Depression...
If you believe the
If you believe the propaganda then you think "the invisible hand of the market" ploughed under the crops which caused the mass starvation.
http://www.russiatoday.com/features/news/31913
FRD was doing as he was told
the goal was to create a prolonged depression.
They succeeded in that.
The policies were designed to bring the US closer to one world government and they did.
Mission accomplished.
The thought that a president is free to set policies that have some kind of "effect" on this country is ludicrous. He is held to a script.
Everything is planned and controlled and that is that.
The current crisis is designed to bring us still closer to one government and it is.
Unify
Didn't we know this already?
Murray Rothbard's book America's Great Depression is about this exact thesis - and it was first published in 1963. You can read the entire book online here: http://mises.org/rothbard/agd/contents.asp
I don't believe this!
My understanding is that the FED kept sucking cash out of the economy throughout the 1930s so that there was no means of exchange, no ability to get loans, start businesses, etc. Everybody was cash poor ... couldn't buy, couldn't sell. The stock market crash only had a minimal effect on the economy ... speculators jumped out of windows and lots of paper wealth disappeared ... it should have caused no more than a mild recession.
What can you expect from UCLA economics professors ... they are spitting into the wind with this story.
Bad news is that the FED will now do it to us in reverse this time ... print up so much funny money that it buys almost nothing.
Many communities have created their own forms of exchange (check out Ithica, NY for a town run bartering system). A community-wide bartering system could help ease the misery.