Could this be the next great economic idea from the Obama White House?
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The first New Deal was essentially a scheme to turn the U.S. economy into one massive, government-run system of industrial and agricultural cartels. At a time when underemployment or unemployed of resources (including labor resources) was of tragic proportions, the focus of government was to restrict output and employment even further with supply-reducing cartel schemes and limitations on hours worked.
In her best-selling book The Forgotten Man: A New History of the Great Depression, Amity Shlaes paints a similar picture:
Roosevelt’s National Recovery Administration, created in 1933, pulled wages up when perishing companies could not afford it; come 1935, the Wagner Act gave unions more bargaining power, forcing further wage increases on companies. Roosevelt’s multiple tax increases caused businesses to postpone investment. Especially counter-productive was FDR’s “undistributed profits tax,” which punished firms for being cautious and forced them to disgorge cash at the worst possible moment.
From first-hand observation of the same events, Winston Churchill, then out of government and writing furiously to replenish his depleted financial resources, penned a long and fascinating story on FDR and his administration that appeared December 29, 1934, issue of Colliers. While bending over backwards to present the most flattering possible picture of the president, Churchill did allow some real criticism — softened somewhat by humor and an arch tone — to creep into the article. He wrote:
(British) trade unions have grown to manhood and power amid an enormous company of counterchecks and consequential corrections. But to raise American trade unionism from its previous condition to industrial sovereignty by a few sweeping decrees may easily confront both the trade unions and the United States with problems which for the time being will be at once paralyzing and unsolvable.
A second danger to President Roosevelt’s valiant and heroic experiments seems to arise from the mood to hunt down rich men as if they were noxious beasts. It is a very attractive sport, and once it gets started quite a lot of people everywhere are found ready to join in the chase.…The pursuit is long and exciting and everyone’s blood is roused by its ardor. The question arises whether the general well-being of the masses will be advanced by an excessive indulgence in this amusement.
Apparently, not wanting to upset his great wartime ally and personal friend, Churchill removed this profile of the American president from his book, Great Contemporaries, which was printed later in the 1930s. It was added to later editions of the book, published after the war and after Roosevelt’s death.
Herbert Hoover and Franklin D. Roosevelt teamed up to create the worst depression in American history. They did so by stifling private enterprise and effectively killing the only kind of investment — private sector investment — that leads to growth and prosperity.
Let’s hope we’re not about to replay this same old song — which is ironically known by the title Happy Days Are Here Again.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?
H/T to National Review Online