Wednesday, August 17, 2011
FDR's depression
Most people are not aware that the Great Depression started with the stock market collapse in 1929, shortly after Herbert Hoover was elected president. Hoover, a technocrat/businessman, began a series of make work and other government spending programs that FDR expanded upon once he became president in 1933. Many of the New Deal programs were simply variations and amplifications of the Hoover Administration's attempt to create jobs with government projects and planning. Walter Williams, a conservative economist, talks about the evolution and failure of some of these programs in this column here. It's worth noting that there was at least as much unemployment, north of 20%, in 1939/40 as in 1931/33 long after the programs of Hoover and FDR were put into play. Clearly they had no impact on the unemployment rate. So why are so many keen on the leadership of FDR during this period? Maybe because he introduced many programs that have come to be known as the social safety net the runaway costs of which have now driven us into bankruptcy. Those who believe in a government directed economy that delivers the fruits of everyone's labors evenly are always keen on more and more government programs and regulations to effect this end. Hoover and FDR started the ball rolling and their big government followers remain grateful to these two.
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