No, We Don’t Need a New New Deal
As we await fall semester grades, the end of my oldest daughter’s high school career is now in sight. For all intents and purposes, the spring semester will have a muted effect.
Still, I was happy to hear recently that the economics teacher she’ll have apparently “hates” talking about the New Deal. It’s no more an economic concept than is “trickle down,” both being more governmental in nature.
It’s also one of the most undeservedly deified chapters in American history. Yet, Jacqueline L. Angel and Juan Fernando M. Torres-Gil, two professors of “social policy” remain enthralled by it.
This would be done with a “substantial financial investment that would mitigate the effects of a possible double-dip recession.” That self-fulfilling prophecy doesn’t have to happen any more than did the impetus for the original New Deal.
What President Hoover faced early in his only term was a routine, cyclical downturn. Painful though they are, recessions are the natural result of credit expansion, often facilitated by central banks.
When left alone, an economy in a time of recession is much more likely to snap back strongly, quickly. See the recession of 1920–21.
Hoover should have known that given that he was commerce secretary at the time. Alas, as president he succumbed to the typical politician’s urge to “do something!” After steep hikes in tariffs, spending, and taxes, he had pounded the economy into submission. Voilà: the Great Depression.
He had teed it up for FDR to be the savior. Except government isn’t a savior for anything but more government and well-connected cronies.
Article from Mises Wire