Professor Cole explained, “The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes. Ironically, our work shows that the recovery would have been very rapid had the government not intervened.” Professors Cole and Ohanian argue that FDR’s economic policies added at least seven years to the depression.
Where do the trillion-plus dollars come from that Congress and Obama are spending in an effort to stimulate the economy? How about Santa Claus, or maybe the Tooth Fairy? If you said, “Come on, Williams, you’re being silly! The only way government can spend a dollar is to tax or borrow it,” go to the head of the class. In the case of a tax, one should ask what would that taxpayer have done with the dollar had it not been taxed away. He would have spent it on something that would have created a job for someone. If the government hadn’t borrowed the dollar, it might have been invested in some project that would have created a job. When government taxes, borrows and spends, it shifts unemployment from one sector to another. Of course, the sector that benefits tends to be a political favorite of the shifter.
Between 1787 and 1930, our nation has seen both mild and severe economic downturns, sometimes called panics, that have ranged from one to seven years. During that interval, no one considered it to be the business of the federal government to try to get the economy out of a depression because there was no constitutional authority to do so. It took Hoover, FDR and a frightened and derelict U.S. Supreme Court to turn what might have been a three- or four-year sharp downturn into a 15-year meltdown.
Walter E. Williams is a professor of economics at George Mason University.
Another great article by Dr. Williams. The reason Obama is doing what he is doing is all explained in the term Fabian Socialist. He is consolidating power in the new socialist government he is creating. He knows exactly what FDR did and why. He is finishing the job.
The shame and real danger is that Americans voted him into office. A moral and educated citizenry is needed to sustain a Republic and it looks like we certainly are lacking in that regard.
This is all true but we need to remember that since the 70s America has been borrowing money to pay for entitlements. The current crisis is a result of 40 years of reckless spending of money we don't have.
We are the author of our own misfortune. We elect people who do not understand how jobs are created, or whose desire for votes overcomes their desire to help the common good.
Look at all the countries south of our Mexican border who have elected socialists who not only demolish their democracy, but put them into a state of perpetual poverty.
Look at Iran, whose people's enthusiastic revolution brought in a totalitarian dictatorship of economically left-wing and theologically extreme dictators who among other things have ruined their economy.
Look how long China was in extreme poverty because of their own embrace of Communism. And we can see what they are capable of when they embrace even partly the free-market.
How can the progressives keep repeating such failed tactics?
Has everyone on the left gone completely mad?
THANK YOU, THANK YOU, THANK YOU…Walter E. Williams, one of my heroes. Your comments and referenced readings should be MANDATORY reading homework for every high school student during Summer break between that student's Sophomore – Junior year. Parents and their children will soon learn some very severe lessons because of their economic and historical ignorance. I would wager that the great majority of parents and children have no idea that Japan, once the supposed threat to U.S. economic superiority, has been in stagflation for 19 or 20 years. I think that door is ready to open on us and if / when it does, what, oh, what will we do?
"Why is Obama ignoring the most blatant lessons of the Great Depression?…?
My guess is that he's not ignoring them but using them to finish the job FDR started but couldn't finish because of WWII – replacing capitalism with socialism. To do this requires destroying the bourgeoisie: the middle class and small businesses. Lenin, Stalin, Mao and Pol Pot did it by killing them all. The other way is to tax them out of existence and that's what's in progress under Oblunder. IMO
Obama and other leftists want this current economic disaster to be as bad as the Great Depression. The Great Depression allowed the Federal government the excuse to expand at a greater pace towards Socialism than at any other time in our history. Of course leftists look at the era with reverence. Why wouldn't they?
TWO WERE SENT YESTERDAY…NEITHER ONE IS POSTED…AND EACH SHOWED IT HAD BEEN SENT 6 MINUTES BEFORE ACTUALLY SENT…PLEASE CHECK YOUR SYSTEM. THANK YOU.
Walter Williams should be known as the Hammer of Economics because he's always nailing down the fallacies that drive politicians to commit acts of incredible destruction.
The extraordinary length of the Great Depression should have been seen as the result of something different than the much shorter previous depressions. The lack of a depression after WWII came as a complete surprise to the economists who predicted that the drop in government spending would trigger a catastrophe.
You would think that it would be obvious that the cure for low production levels is not more spending, but more production. Jean Baptiste Say wrote about this more than 200 years ago but the will to power of modern politicians made them accept the Keynesian formulas because Keynes offered them a path to power while Say and the later Austrian school of economics merely offered them early retirement.
As usual, thanks Walter for being willing to say what politicians dare not even try to understand.