Skip to comments.Obama riles Dems by spurning New Deal complacency
Posted on 12/12/2010 4:01:57 AM PST by gusopol3
It's hard to disagree. Robust economic growth solves a lot of fiscal and other problems.
But Obama's fellow Democrats, to whom he explicitly directed these comments, can be forgiven for being puzzled. The whole thrust of his first two years -- the stimulus package, the health care legislation, the vast increases in government spending -- has been to put programs in place that have done little or nothing to stimulate economic growth.
That's not accidental. The template for the Obama Democrats' policies, the New Deal of the 1930s, was not designed to stimulate economic growth, but to freeze in place a tolerable but not dynamic status quo.
The New Deal's father, Franklin Roosevelt, believed that the era of economic growth was over, just as many contemporaries believed that technological progress was at an end (how far could you go beyond the radio and the refrigerator?). FDR, like his cousin Theodore, was an affluent heir who had contempt for men who built businesses and made money. They were "economic royalists" and "malefactors of great wealth" -- sentiments echoed by Obama last week.
The initial New Deal program, the National Recovery Act, set up 700-plus industry codes to hold up wages and prices. That made some sense in a time of deflationary downward spiral, but proved unsustainable over a longer term.
(Excerpt) Read more at washingtonexaminer.com ...
The New Deal of the 1930’s was a complete crock of shit.
It was sold to the American people as good for the country when in fact it was anything but.
It was nothing more than a certified propaganda campaign that lulled the American people into buying the lies.
The only thing that stopped the Great Depression dead in its tracks was WWII.
I’m not sure yhat it was WW II that ended the depression; that’s not the conclusion that Ohanian came to. Barone’s comments in this article look like a full-throated echo of the conclusions that Ohanian reached. Although opposite sides of the same coin, it seems it’s better to ask, “What delayed the recovery?” more than to ask “What ended the depression?” (BTW, Ohanian’s paper was written in ‘04 , which gives it a prophetic luster)
“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.”
Unlikely. He and the "Progressives" continue to believe that dollars handed out by the treasury are the same as dollars earned by a working person.
Example: He crippled the offshore drilling industry in the Gulf, partly I believe, because all of the shoreline states have Republican governors, and said that the affected workers could just collect UI and reparations from BP.
Income problem solved as far as his conscience and his economic literacy was concerned.