If you want more detail that can be covered in this blog explaining how the New Deal made the Great Depression worse, increasing suffering, and extending the pain by years, check out Great Myths of the Great Depression By Lawrence W. Reed. (Cross post from my other blog, Outrun Change, Read more…
Hunger sculpture at FDR Memorial in Washington DC. A monument to the man whose policies added extra years to the Depression yet who rarely gets credit for the unnecessary suffering. Photo courtesy of DollarPhotoClub.com.
An extra seven years.
That is the conclusion two economists published back in 2004: intentional policies from FDR added seven years of suffering for the country.
Yes, that analysis was published back in 2004. Sometimes it takes me a while to catch up on the news.
On 8/10/04 the UCLA Newsroom published FDR’s policies prolonged Depression by seven years, UCLA economists calculate. Update: The analysis is from Professors Harold L. Cole and Lee E. Ohanian
Cause
The cause of extending the Great Depression, according to the economists, was the National Industrial Recovery Act (NIRA) which protected industries from antitrust prosecution in return for adopting collective bargaining agreements. The result was unions drove up wages beyond where the market would have set them, companies were intentionally not prosecuted for collusion, thus companies cooperated in setting prices, which in turn drove up prices to consumers. As a result consumers had much more difficulty affording stuff and therefore actually bought less stuff, which further contracted the economy.
The Wall Street Journal editorial page has a few more comments on the Supreme Court ruling that when the Department of Agriculture ‘takes’ a portion of the crop from raisin farmers, the farmers have to be paid for the ‘taking’: Raisin Owners in the Sun. Previous discussion of the ruling is here.
Editorial points out the law authorizing the feds to take whatever amount of agricultural crops they want and pay whatever little amount they want was passed in 1937, which is 78 years ago. This case centers on crops that were seized in 2003 and 2004. The later of those two attempted seizures was 11 years ago.
That makes eight decades for the Supreme Court to get around to reading the Constitution and just over a decade for this case to work its way through the legal system.
Did you know raisin growers have to turn over a huge portion of their crop to the federal government? Growers get paid whatever is left over after the feds sell at a discount, giveaway or throw in the trash the reasons they collected.
In one year, a particular farmer got back less than what cost him to raise the raisins. In the following year he got zero. Zip.
Well, the good news is that as of today, that one specific New Deal program comes to an end. At least for raisins.
(cross-post from my other blog)
The New Deal policy of confiscating a portion of raisins from farmers every year in order to drive up prices to consumers has been previously discussed here, here, and here.
The Wall Street Journal provides more background on this foolishness that is being considered in the Supreme Court today: The Incredible Raisin Heist / A property-rights challenge to federal marketing orders hits the Supreme Court.
(Cross-post from my other blog, Outrun Change.)
I’ve been wondering what the Raisin Administrative Committee does with all those raisins after they are surrendered by the farmers. Editorial points out the government may sell the raisins on the open market, ship them overseas, or just give them away.
I have to find someone far brighter than me to explain how selling the raisins or giving them away stabilizes prices. Seems that would drop prices to what would otherwise be equilibrium or even lower.
The WSJ editorial outlines the progress of the case through the federal courts. I promise you this is a paraphrase of the editorial and not the outline of a dystopian political novel I’ve been mulling over.
For reasons that defy logic, common sense, and basic morality, the federal government still has in place a New Deal era policy that raisin farmers must turn over some percentage of their crop to the federal government without compensation.
The purpose of the program is to increase prices to consumers.
No, this isn’t an April Fool’s Day post.
No, I’m not making this up.
George Will points out in his April 17 article, Shriveled grapes, shriveled liberty, the Supreme Court will finally hear oral arguments next Wednesday (4/22) on a case that has been in court for years.
(Cross-post from my other blog, Outrun Change.)
It is common belief that the massive federal spending and even more massive federal rules and regulations during the New Deal ended the Great Depression.
There are many books and articles refuting that falsehood.
For a brief explanation, check out Stephen Moore’s article, The enduring myth of FDR and the New Deal / Rather than end the Great Depression, his policies prolonged it.
It was neither massive federal spending during the Depression nor even more massive federal spending during World War II that ended the Great Depression.
That’s what I was taught in school and what most people believe today.
Stephen Moore explains the WWII part of the falsehood in his article How did the Gret Depression actually run its course?
FDR and his whiz kids were totally convinced that the economy would completely collapse after the end of the war. They planned but fortunately did not implement a New Deal II. Doing so would have strangled the economy, perhaps for yet another decade.
Here is the conclusion to the article: (more…)