Saturday, 27 August 2011

How the 'New Deal' prolonged the Great Depression

For many years we've been told of the wonder that was the New deal - how it saved America and how FDR was the sainted godfather of progressive liberalism. Seems that his policies weren't so great after all - at least according to academics from that dreadful right-wing institution, UCLA:

"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."

So when Ed Miliband or Caroline Lucas talks of limiting competition, of a 'living wage' or of some expensive intervention into the trading economy, they are invoking the spirit of the New Deal - something that prolonged the agony and pain of depression leaving millions to suffer in the name of 'progressivism'.


1 comment:

Anonymous said...

.. and at the same time prolonging the length of stay in office for all the politicians who congregate themselves around the progressive label and popularized themes, such as FDR did good.

What "worked" last time wasn't so much a boost to the economy out of depression as it was a boost to the political class who managed to hold on to their positions of authority by kow-towing to the FDR label.

So why not proclaim the same today. If they can prolong the recession/depression, they can prolong their hold on power by way of progressivism, faulty though it may be in logic.