Thursday, February 08, 2007
Rethinking the New Deal
I just finished reading Rethinking the Great Depression, by Gene Smiley. Dr. Smiley, an economist at Marquette University, presents a compelling thesis: New Deal policies undertaken by the Roosevelt Administration actually prolonged the Great Depression. My only beef with the book is that it often overwhelms the reader with statistics. Nevertheless, I recommend Smiley's book to anyone who seeks greater insight into the United States' economic history.
That being said, the Wall Street Journal has posted a New Deal debate, if you will, featuring economists Brad DeLong and Arnold Kling. A sample (from Kling):
The New Deal is a mythical event in history. Just as we revere the constitution as the basis for our government and we revere Abraham Lincoln for ending slavery and preserving the union, we are supposed to revere the New Deal as somehow providing the basis for our modern prosperity. Yet the policies of the New Deal are quite a mixed bag, to say the least. Most were discarded by 1950. The survivors include agricultural policies that were almost certainly wrong then and are almost certainly wrong now. Most of the financial regulations, such as interest rate ceilings on bank deposits, proved unworkable by the 1970s. Social Security, and its offspring Medicare, are going to be the next great financial crisis in this country.
That being said, the Wall Street Journal has posted a New Deal debate, if you will, featuring economists Brad DeLong and Arnold Kling. A sample (from Kling):
The New Deal is a mythical event in history. Just as we revere the constitution as the basis for our government and we revere Abraham Lincoln for ending slavery and preserving the union, we are supposed to revere the New Deal as somehow providing the basis for our modern prosperity. Yet the policies of the New Deal are quite a mixed bag, to say the least. Most were discarded by 1950. The survivors include agricultural policies that were almost certainly wrong then and are almost certainly wrong now. Most of the financial regulations, such as interest rate ceilings on bank deposits, proved unworkable by the 1970s. Social Security, and its offspring Medicare, are going to be the next great financial crisis in this country.
# posted by Joltin' Django @ Thursday, February 08, 2007 
