OT: Did FDR help or hurt?

You might read the whole argument of Cole and Ohanian.

Here is a little bit.

"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."

The policies were contained in the National Industrial Recovery Act (NIRA), which exempted industries from antitrust prosecution if they agreed to enter into collective bargaining agreements that significantly raised wages. Because protection from antitrust prosecution all but ensured higher prices for goods and services, a wide range of industries took the bait, Cole and Ohanian found. By

1934 more than 500 industries, which accounted for nearly 80 percent of private, non-agricultural employment, had entered into the collective bargaining agreements called for under NIRA.

So the major part of their argument is that FDR pushed for higher wages and prices and the higher wages and prices were responsible for prolonging the depression. Their argument is not about government spending, but about exempting industries from antitrust if they unionized and raised wages.

Dan

Henry Morgenthau, Jr., FDR's Treasury Secretary 1934 -1945:

"We have tried spending money. We are spending more than we have ever spent before and it does not work.

The book to read on what a mess that FDR made when he turned a rescission into a depression is

nt before and it does not work.

into a depression is

before and it does not work.

into a depression is

"recission"? Somebody rescind Clark. Time for a twit filter, Denis.

So, is this the truth, unfiltered by the times, or is it revisionist history? Who here was alive (and paying attention) back then that can remember it?

-- However beautiful the strategy, you should occasionally look at the results. -- Sir Winston Churchill

spent before and it does not work.

ion into a depression is

=A0 =A0 =A0 =A0 =A0 =A0 =A0 =A0-- Sir Winston Churchill

I don't know what to tell you Larry. Choose your poison, I guess. The mainstream isn't always right.

spent before and it does not work.

into a depression is

I prefer the truth over poison, thanks, no matter how bitter it may be. But truth is hard to come by.

-- However beautiful the strategy, you should occasionally look at the results. -- Sir Winston Churchill

FDR was good for the US like Stalin was good for the USSR.

Both were poison.

into a depression is

Here's another - FDR's Folly.

The public school textbooks painted Roosevelt as a hero, but my parents, particularly my father disagreed. Two thoughts that I remember were that he felt it was dishonest to try to pack the Supreme Court in order to bypass the intent of the constitution, and that WW II was what ended the great depression, not anything dealing with his economic policies.

In a (civil) discussion of the latter with one of our regular contributors here off list, that individual's thought was that WWII ended the depression because of the massive amounts of money that were spent - i.e. the Keynsian stimulus of war spending. My take was that it ended it by removing men from the workforce, and creating artificial shortages of labor, and artificial shortages of goods through rationing and redirecting the output of industry to war materials so that there was pent up demand.

I say it somewhat jokingly, but a good bout of inflation would cure our current economic situation. It would relieve the debtors by allowing them to pay back in cheap dollars, and create demand because people would be buying things before the price could go up. Not sure what that would do to the government and its social obligations though. Also have to admit that the stagflation of the 70s wasn't a great time economically for the country as a whole, but those of us with student loans and mortgages made out pretty well for the times.

RWL

into a depression is

Certainly true, but it didn't happen. The Supreme Court was already evolving away from its "anything goes" approach to corporations and banks, all on their own, before FDR even proposed the Court-packing. See "The switch in time that saved nine."

Which did he think did it, billions in deficit spending (and then blowing up the products), wage and price controls, or conscripting millions of men to work for the government?

WWII most certainly WAS an economic issue, the purest example of central-planning socialism, deficit spending on goods that had no productive value, and forced labor that we've ever had in the US. And it worked like a charm.

If you study it from a conservative economics point of view, it's scary as hell.

Of course. But no conservative economist would ever say that increasing demand by blocking its fulfillment could accomplish a recovery from a recession or depression. In the conservative economics world, the factor that moves an economy is production, not consumption. Consumption just follows production in conservative economics theory, and if you reduce the production of consumer goods, the demand declines accordingly.

That is, unless the consumers are working at and getting paid for doing something else -- like a make-work program, or producing war materiel, which, economically, are the same thing. Conservative economists say that can't work to expand an economy. Shhhh...don't tell them about what happened after WWII. d8-)

It's not a joke. The major liberal economists, including some Nobel Prize winners, are saying exactly the same thing.

The middle class usually benefits from inflation if debt is high and economic activity is low. It's the moneyed class that suffers from it. And they've built anti-inflation into the conservative catechism.

Exactly.

That depends more on economic growth than anything else. If moderate amounts of inflation increase economic activity, that would outweigh the increased cost of fulfilling those obligations. This is not speculation. The effect of bumping up growth rates by even two or three percent is huge, in terms of government revenues. That is, unless we slash corporate income taxes.

It was a very confused economic situation, and nobody really was sure of what to do to cure it. Except for Paul Volcker. He had faith that strangling the money supply, causing a steep recession, and driving up unemployment rates (they hit over 10%) would kill us or cure us. Fortunately, we survived the poison treatment and recovered. He is a very brave man.

Carter hired him and he started to work right away. Reagan was smart enough to keep him on to finish the job.

A lot of people would disagree with the statement about spending on goods with no productive value. Winning the war certainly had some value. There was also a lot of things done that had value. Things like building plants to produce nylon and teflon.

Dan

FDR built lots of ships that sunk, and that kept us busy. FDR had lots of propaganda news reels with no rebuttal.

And Stalin built a canal too, that kept many busy. Stalin had lots of propaganda news reels with no rebuttal.

Central planning keeps us poor and under control.

To individualists, you are selling slavery with your big government collectivism.

And with the internet, we will fight the enslavement by liberals.