Because of pervasive statism by both Herbert Hoover and Franklin Roosevelt, the 1930s were the worst decade in American economic history.
- No economic growth
- High unemployment
- Confiscatory tax rates
- Growth of government
- Federal Reserve errors
- Onerous protectionism
- Pervasive intervention
The key thing to understand is that government policy mistakes caused the Great Depression and government policy mistakes lengthened and deepened the downturn.
The good news is that the economics profession and policy community now have a better understanding of what really happened in the 1930s.
The bad news is that some people are still behind the times. Indeed, one of them wrote what might be the worst-ever sentence about economic policy.
The time has come for the right to discover the greatness of the New Deal and to improve it.
That comes from Jeffery Tyler Syck, an Assistant Professor of Political Science at University of Pikeville in Kentucky. Here are excerpts from his article, which appeared in the American Conservative.
American conservatives need to cut their frequent historic (and historically groundless) cries of socialism and understand that the New Deal was intended as a conserving rather revolutionary project. Even more importantly, conservatives need to abandon their reactionary tendencies against any ounce of government intervention in the economy and see that, if properly preserved, the New Deal represents the third great constitutional development in the history of our nation. …Roosevelt saw the Great Depression as part of a larger problem that originated not in the Wall Street crash but in the Industrial Revolution. …the Industrial Revolution had given rise to an entirely new form of individual: the economic royalist. …Roosevelt argued that the concentration of economic influence in the hands of the few eroded the basic liberty that formed the heart of the American regime. To be free from government tyranny is essentially meaningless in the face of private companies that can dominate the lives of all those citizens inevitably drawn into their orbit. The Great Depression merely threw this problem into stark relief… The New Deal was designed to resolve the crisis by balancing the influence of government and private industry. This would create space for individual freedom to flourish. …The time has come for the right to discover the greatness of the New Deal and to improve it.
There are two big problems with Professor Syck’s article.
First, he never offers a shred of evidence to show that the New Deal produced positive results. And he also doesn’t provide any evidence to counter the more up-to-date analysis showing it caused great damage.
Though I can understand why he dodged these issues.
Second, his argument is based on the theory that the industrial revolution produced a class of “economic royalists” and that government needed more power to protect people from exploitation.
It is true that some entrepreneurs became rich during the industrial revolution, but there were also dramatic increases in living standards for the overall population.
If that’s exploitation, let’s have more of it!
There is a real problem with big business and exploitation, to be sure, but it occurs when companies get in bed with government.
P.S. I challenge Professor Syck or anyone else to defend FDR after learning about his “Second Bill of Rights” or his proposal for a 100 percent tax rate.
