Master CraftsMon

Sunday, November 27, 2005

Liberal "Victory" #1: The New Deal

Master CraftsMon - Aired Monday, November 28, 2005 at about 11pm CST

The rooster gets up before dawn and crows and crows and crows and the sun comes up. Obviously the sun came up because the rooster crowed.

Liberalism has five major moral wins over the last seventy years. Each of them are failures when examined in detail. By my standards, they did not really achieve the moral goals that they set out to achieve. However Liberals view each of the following examples as having achieved their goals. How can it be moral to steal money from everyone and support a project that achieved nothing OR makes the problem worse?

The first of course is the New Deal. The thinking there is that Roosevelt saved Capitalism from itself. By using governmental intervention, the New Deal ended the Depression and things got better and proved that government was a source of positive social change.

By my standards the New Deal did nothing to fix the economy. The government increased taxes and raised tariffs thus cutting off foreign trade. That's what the Republicans did about 1930 by enacting the Smoot-Hawley bill. Democrats then came in and raised taxes and tried to intervene in the economy directly. Roosevelt tinkered. Never before had the government tried to intervene in an economic downturn. The macroeconomics and the microeconomics were screwed up by the government, then the government compounded the error by making sure that investors could not see what was going to happen in five years. If you are an investor, you have to have a stable economy for the five after you invest or it probably isn't worth the risk. I personally do not see how the Depression could have been avoided once the Smoot-Hawley bill was enacted in 1930, but I do not think the New Deal helped. The Depression ended in 1947 after a period where the government eased up on tinkering with the economy.

I suggest that you look up Smoot-Hawley in Wikipedia before you get hot under the collar. I also suggest that you think on these questions: What happens when you raise taxes in an economic downturn? What happens when you make policy that discourages investment? In both cases, would the economy go up or down?


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