No, the economy was on track to go down around six or eight months ago. There is hardly an economist in the western world who doesn't know this. There isn't one economist worth spit who didn't say, around the first of the year, that unemployment wouldn't peak until sometime early in 2010.
That's the legacy we've been handed. It's been a very sharp downturn, for a variety of reasons.
That's nothing but a bunch of ideological bull that's been running around, mostly since the '70s, and there isn't a single example to support it.
And if you want to go back to Hoover's days, or before that, the "free market" some people thought existed then was based on tariffs running as high as 40%, a great big gift bag of export subsidies, and several other things that made the market about as *un* free as it could be. And that was BEFORE the Smoot-Hawley Tariff Act (1930).
We always do. Hoover and Treasury Sec. Mellon pursued a free-market approach; they dug us into a deep, deep depression. FDR started to turn it around but then lost his political clout and cut back on stimulus programs in 1936; the result was another whipsaw back into depression.
Free markets can't pull you out of a recession, Rich. If you try, the whole economy just stalls out. The worst case is what happened under Hoover. With nobody buying anything, nobody was investing. So the economy just spiralled down.
We saw a smaller version with Japan over the past decade. They got into a deflationary spin and a liquidity trap, and nothing budged. Japan's economy just went into the doldrums. If we don't stimulate ours sufficiently, we're likely to run into the same trap.
Again, this is what experience tells us. There IS NO experience to prove that "free markets" can get you out of a deep recession.
-- Ed Huntress