Standard of Living – Madison, Wisconsin

Looks like it will be an excellent read!  Available at Amazon or Mises.org.

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Tags: bob p.murphy, book, fdr, great depression, hoover, new deal, politically incorrect guide, world war ii

Did FDR’s New Deal prolong the Great Depression?  I think so.  If you’ve got a moment, check out these multimedia resources and see if you’ve been fully informed.  I placed the 10 reasons why I believe many of FDR’s New Deal programs prolonged the Great Depression near the bottom of the post.

P.S. The video and podcasts/audio are very excellent.

Material that is Readily-Accessible and Free:

Video:

• FDR’s New Deal: did it work? And will a new “new deal” work today? – A discussion between a handful of historians and economists including GMU’s Russ Roberts

Podcasts/Audio:

• Higgs on the Great Depression – Economist Russ Roberts interviews Economist Robert Higgs
• Burton W. Folsom, Jr. on New Deal or Raw Deal: How FDR’s Economic Legacy Has Damaged America

Articles:

• “Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War” – Economist, Robert Higgs
• “The New Deal Debunked” – Economist, Thomas DiLorenzo
• “The New Deal in One Lesson” – Economist, Christopher Westley
• “Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s” – Economist, Robert Higgs
  

Books:

• Economics In One Lesson (Ch. 6, sec. 3) – New York Times editorialist, Henry Hazlitt explains how the Reconstruction Finance Corporation, the Home Owners Loan Corporation and other government agencies in 1932 and later robbed successful businesses.
• Economics In One Lesson (Ch. 13, sec. 1) – Hazlitt explains how FDR’s insistence on fixing prices lowered the standard of living for those that had to pay the higher prices.
• Economics In One Lesson (Ch. 18) – Hazlitt explains how minimum wage laws (such as created by New Deal) create unemployment.
• America’s Great Depression – Economist, Murray N. Rothbard (thanks to Mises.org)

Material that can be Purchased:

Books:

• Depression, War, and Cold War: Studies in Political Economy – Economist, Robert Higgs
• Economics In One Lesson – New York Times editorialist, Henry Hazlitt
• 33 Questions About American History You’re Not Supposed to Ask – Historian, Thomas E. Woods (see question #24 – Did Franklin Roosevelt’s New Deal Lift The United States Out Of The Depression?)
• Roosevelt Myth – Journalist (liberal), John T. Flynn
• New Deal or Raw Deal?: How FDR’s Economic Legacy Has Damaged America – Economic historian, Burton W. Folsom, Jr.
• FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression – Historian, Jim Powell
• Out of Work: Unemployment and Government in Twentieth-Century America – Economists, Lowell E. Gallaway and Richard K. Vedder

My Opinion On Why FDR’s New Deal Prolonged the Great Depression Based On The Material Above:

1. FDR’s Agricultural Adjustment Administration (AAA) program had pigs slaughtered and had corn and oat fields burned to keep prices high (to benefit farmers); this was food that could have fed the poor who were starving.
2. FDR’s programs fixed prices and wages which lowered the standard of living for those that had to pay the higher prices for food and other goods.
3. FDR’s Fair Labor Standards Act created minimum wage laws which created unemployment.  See Hazlitt’s book which I linked to above on how minimum wage laws hurt the under-skilled.
4. FDR allowed unions and industries to become cartels and push wages and prices higher during a time of mass unemployment.
5. FDR’s Reconstruction Finance Corporation, the Home Owners Loan Corporation and other government agencies took money away from successful businesses which could have employed more people if they had been able to keep their earnings to employ.
6. FDR’s Banking Act of 1935 gave powers to the Federal Reserve to change reserve requirements for banks.  The use of these new powers caused uncertainty in money markets (such as we are experiencing now with the uncertainty government has created during this credit crisis).
7. FDR’s hostility to businesspeople through new laws and regulations decreased investment in long-term projects by private investors afraid of the business environment FDR created.
8. FDR raised taxes to the top marginal rate in 1935 to 79%.  This destroyed the means to create new employment.
9. FDR’s make-work programs lowered the standard of living as resources were diverted away from profitable use by companies and were used by government workers in unprofitable, wasteful work that did not raise the standard of living for workers or customers because not all of the services/goods created were actually wanted.
10. Even FDR’s World War II did not get us out of the Great Depression either.  Higgs’ research suggests it was the buildup of wealth and the transformed expectations of the business environment that paved the way out.

What Are Your Opinions?

Please post a comment with any of your thoughts and resources that you have that are insightful.

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Tags: agricultural adjustment administration, banking act, burton folsom, cartelization, cartels, economist, fdr, great depression, henry hazlitt, historian, home owners loan corporation, jim powell, john t. flynn, make-work programs, mises.org, murray rothbard, new deal, price fixing, prolong, prolonged, reconstruction finance corporation, robert higgs, russell roberts, thomas e. woods, thomas j. dilorenzo, unions, world war ii

David Sirota is a journalist fighting an imaginary war of “the left vs. the right” in understanding the Great Depression.  In his imaginary war construct consisting of only two forces in the world, the left and the right, David Sirota succumbs to a force of nature called bias that has lead him to develop a strange strain of anti-intellectualism.  David Sirota’s strain of anti-intellectualism shows “hostility towards intellectuals and intellectual pursuits that have arrived at conclusions that counter leftist/progressive understanding of the Great Depression”.  This is what happens when an individual like David Sirota creates a strawman scenario to do battle in, such as his imaginary “left vs. right” war, so as to relieve oneself of the necessity to participate in reality.  Well, times are tough these days for some, so I guess some will always look for an escape from reality.

David Sirota says of his recent appearance on FOX News:

Fox News is starting its campaign to stop Obama’s big spending plan by stating – as assumed fact – that “historians pretty much agree” that Franklin Roosevelt prolonged the Great Depression, and that therefore, Obama shouldn’t try another New Deal.

[...]If the right wants to try to stop a serious economic recovery package and financial regulations by trying to vilify one of the most popular presidents and popular policy programs in American history, then I’ll say what George Bush once said: Bring it on.

Then Sirota quotes Daniel Gross of the New York Times to help beat down the imaginary forces of the right:

The argument that the New Deal’s efforts “perhaps had prolonged, the Depression,” is a canard. One would be very hard-pressed to find a serious professional historian–I mean a serious historian, not a think-tank wanker, not an economist, not a journalist–who believes that the New Deal prolonged the Depression.  (emphasis added)

David Sirota continues:

[...]these are not “normal people” – those making these arguments are right-wing automatons whose claim that we shouldn’t look at actual data, we should simply accept the truth of their claims because they insist “it’s in the books!” or they’ve supposedly seen “all kinds of studies and academic work” that proves their hysteria true.

Well, Madison WI individuals, here are those professional historians that Sirota and Gross say don’t exist.  This list was provided here by David T. Beito, professor of history at the University of Alabama.  They are professors with doctorates in history from top-ranked universities that according to Beito are “serious professional historians who would probably argue (and argue strongly) that the New Deal prolonged the Depression.”

1. David T. Beito of University of Alabama
2. Jonathan Bean of Southern Illinois University
3. Brad Birzer of Hillsdale College
4. Brad Thompson of Clemson College
5. Jeffrey Hummel at San Jose State University
6. Larry Schweikart of Dayton State University
7. Michael Allen of the University of Washington of Tacoma
8. Ralph Raico of Buffalo State College
9. Burton Folsom of Hillsdale College
10. David Mayer of Capital State University in Columbus
11. John Moser of Ashland University in Ohio
12. Paul Moreno of Hillsdale

And as regards an understanding of the Great Depression, there is no war of the “the left vs. the right“.  David Sirota’s use of a bullshit left-right paradigm is a resort to the False Dilemma fallacy.  I am an individual that is neither a Republican nor from the right (nor the left) but believes after much research that FDR’s New Deal prolonged the Depression.  Sirota is saying that anyone who believes as I do is from the right and are just taking the right’s side in his fantasy “left vs. right” war.  This is false.  David Sirota is the poster child of Great Depression anti-intellectualism and promoter of a false dilemma between the “the left or the right” in understanding the Great Depression.

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Tags: amity shlaes, anti-intellectualism, brad birzer, brad delong, brad thompson, burton folsom, daniel gross, david mayer, david sirota, david t. beito, eric rauchway, false dilemma fallacy, fdr, fox news, great depression, jeffrey hummel, john moser, jonathan bean, larry schweikart, michael allen, monica crowley, new deal, new york times, paul krugman, paul moreno, ralph raico, republican, the left, the right

During my time in college studying economics and now out of college and listening to economists on TV, I am always amazed at the misinformation current economists have regarding the true effects of FDR’s “New Deal” policies.  If you have ever cared to get some insight into the economic effects that carried forth from the era of the Great Depression and the policies of the New Deal, then you will be in for a treat here.  Within this great discussion among economists and historians, you will get both the correct and the incorrect analysis.  This discussion was hosted in Canada so it also features the viewpoint of a Canadian historian.  His responses will probably surprise you.  But, pay special attention to Russ Roberts as he explains with great insight what the actual economic implications of the policies of Hoover and Roosevelt were.  Russ Roberts is a professor of economics at George Mason University and blogger at Cafe Hayek.

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Tags: cafe hayek, canada, economics, george mason university, great depression, new deal, russell roberts