Quick recap of damage from the New Deal

Lack of jobs for a decade and a half in the Great Depression. What could have slowed the economic recovery that started to appear a few times?

Amity Schlaes provides a quick summary in her Forbes column, Roosevelts versus Plutocrats, in which she also describes the slant and bias in the new PBS series on the Roosevelts.

After the turn of the century, Teddy Roosevelt started his war on big business by going after railroads and coal. The railroad industry was already weak and the litigation toppled a tottering industry. The far less regulated trucking industry made sure rails never recovered.

Ms. Schlaes points out that creative destruction gets no credit in the documentary for undercutting and replacing the rails.

Renewed warfare against the super-rich in particular and capitalism in general by FDR held down the economy.

Two very quick summaries.

Why did the economy not recover until after WWII? Due to heavy regulations and forced wages that were higher than economic value of labor…

Intimidated business leaders hesitated to rehire. Unemployment remained in the teens, a range that would provoke outrage today. Scholars Lee Ohanian of UCLA and Harold Cole of the University of Pennsylvania recently identified one reason for this: Employers couldn’t afford the higher wages; therefore, they hired fewer people.

Don’t forget that additional major recession in 1937.

A few lessons from the Roosevelts that are still unlearned today:

Punishing an industry can kill it; class assaults launched in the name of the poor deprive those very poor of jobs.

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