CHESSNOID

I was reading a Fortune article that was trying to answer the question “Did FDR’s New Deal prolong the Great Depression, as some critics of Obama’s ‘new New Deal’ argue” and the author attempts to give a balanced argument that it was both good and bad.  After reading her article :  The truth about stimulus and the Depression I realize she makes an argument that clearly indicates FDR’s New Deal did prolong the Great Depression.

It’s inarguably true that in the very short-term, the New Deal did not fix the economy. Roosevelt’s programs were first passed in 1933 but economists generally agree that the Great Depression did not end until 1939, when the country began preparing for World War II. Unemployment rates, which reached as high as 25%, took several years to recover and did not get below 9% until 1940.

Critics say the New Deal failed because some of the government’s actions suppressed competition, slowing the economy’s ability to rebound. A central culprit was the National Recovery Administration (NRA), from 1933. The goal of the NRA was to lift wages for workers. But to do this, it encouraged industry leaders to meet and establish minimum prices and wages, effectively creating cartels. The result was wholesale prices rising 23 percent in two years.

It’s hard to find anyone now who will defend the NRA, which academics agree was a bad program because it stifled competition. It was obvious to people even then that the NRA was seriously flawed; in 1935, the Supreme Court ruled the program unconstitutional

“Anytime you put in price and wage controls, you are more likely than not to make the economy worse off,” says Valerie Ramey, professor of economics at University of California, San Diego. “That’s the lesson of all economic history.”

Economists differ, though, in their estimates of how badly the NRA’s bad policies damaged the economy. On the more dire end of the scale, Harold L. Cole and Lee E. Ohanian, economics professors at the University of Pennsylvania and UCLA respectively, estimate the New Deal’s labor and industrial policies caused the Depression to last seven years longer than otherwise. (Here’s one of Cole and Ohanian’s papers.)

We have many experts who were right about the housing bubble from 2 years ago that it would bust. Now these experts are warning that the bailouts and stimulus packages are going to make the economy worse. I believe we are entering into the age of the Bush-Obama Depression which I fear will be truly worse than the Great Depression.

Peter Schiff interview

In this interview, Schiff repeats what the other experts have said in the Fortune article.  Everything I bold printed above seems to be the actions our new Obama administration will be taking.

Ron Paul interview on the US dollar