Pt 2

"Historians have assumed that the policies didn't have an impact because they were too short-lived, but the proof is in the pudding," Ohanian said. "We show that they really did artificially inflate wages and prices."

Even after being deemed unconstitutional, Roosevelt's anti-competition policies persisted — albeit under a different guise, the scholars found. Ohanian and Cole painstakingly documented the extent to which the Roosevelt administration looked the other way as industries once protected by NIRA continued to engage in price-fixing practices for four more years.

The number of antitrust cases brought by the Department of Justice fell from an average of 12.5 cases per year during the 1920s to an average of 6.5 cases per year from 1935 to 1938, the scholars found. Collusion had become so widespread that one Department of Interior official complained of receiving identical bids from a protected industry (steel) on 257 different occasions between mid-1935 and mid-1936. The bids were not only identical but also 50 percent higher than foreign steel prices. Without competition, wholesale prices remained inflated, averaging 14 percent higher than they would have been without the troublesome practices, the UCLA economists calculate.

NIRA's labor provisions, meanwhile, were strengthened in the National Relations Act, signed into law in 1935. As union membership doubled, so did labor's bargaining power, rising from 14 million strike days in 1936 to about 28 million in 1937. By 1939 wages in protected industries remained 24 percent to 33 percent above where they should have been, based on 1929 figures, Cole and Ohanian calculate. Unemployment persisted. By 1939 the U.S. unemployment rate was 17.2 percent, down somewhat from its 1933 peak of 24.9 percent but still remarkably high. By comparison, in May 2003, the unemployment rate of 6.1 percent was the highest in nine years.

Recovery came only after the Department of Justice dramatically stepped enforcement of antitrust cases nearly four-fold and organized labor suffered a string of setbacks, the economists found.

"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," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened."

"Historians have assumed that the policies didn't have an impact because they were too short-lived, but the proof is in the pudding,"
Who's proof - Which pudding?
The problem with revisionist history is by definition it goes against the mainstream. The mainstream may not always be right; but I would caution against accepting contrary theories simply because they are new. This particular theory does deserve to be debated, but I suspect it has only been brought forth, now, to argue that, perhaps, our present economic difficulties were not caused by excessive deregulation.
.
"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," Cole said. "IRONICALLY, OUR WORK SHOWS THAT THE RECOVERY WOULD HAVE BEEN VERY RAPID HAD THE GOVERNMENT NOT INTERVENED." (My caps)
Are they defining rapid in geological terms? The stock market crashed in 1929. Things kept getting progressively worse from then all through 1932 - without Government intervention. That is why the new dealers were swept into office. These guys seem to be claiming that just a few more months of laissez-faire policies would have straightened thing out. If we had waited much longer, the pudding would not have been worth eating.

Guido and Vinnie...
I guess he means Italian. Now some Italian's would take that as an insult, Not me though My Middle name is Guido!

Duane, I really think you should stop renting those Old Untouchable Movies! Your getting Delusional again.


You are without a Doubt a , Testa di *****!

Needless to say, there are a significant number of economists (including recent Nobel prize winners) who disagree with UCLA pair's assumptions and conclusions about the causes of the Great Depression and the effect that FDR had on it.

I won't get into a duelling economists post, but among the bones of contention are the treatment of all WPA workers as unemployed - which strikes me as odd, since they did receive wages, did spend money, and did produce a lot of infrastructure that had sufficient value to still be in regular use today.

Few would argue that the NIRA added anything to the recovery, but most would say that FDR's fiscal stimulus was definitely helping and that it had a positive effect on net investment - right up until he tried to return to more conservative/traditional economics in 1937 (he raised taxes and tried to balance the budget), causing another major downturn.

The pro-stimulus group of economists say that FDR's major flaw was that his efforts at economic stimulus were too small.

How come none of you jinx jaqui mad doc Mike ivy have not mentioned the role of FDR going on the national cable t v network after the stock market crash in 1929. According to the democrat historian and democrat icon joe biden. Roosevelt as president reassured the american people. Havent you guys heard about that. Ole joe said that right on CBS in an interview with katie couric. And as i said before about this employee free choice act . No secret ballot is just the first step eliminating secret ballots and all elections in this country. Just the same as the old soviet union. one pary rule no oppistion to the rulers the Democrats no one shall say anything the democrats dont like. And if they say it once they wont say it twice .

Let us not, forget about the draught and the Dust Bowl. Things which added to the economic upheaval, social displacement, and unemployment, but couldn't be predicted.

Duane states: Havent you guys heard about that.

Duane I was not around back then and am trying to be optomistic and look to tomorrow.

Yes he did say that Duane.

But still will be the New Vice President.

I guess the American People didn't put as much emphasis on it as you Loooooooooooosers do!

Quano, you slay me. Having a Bush worshipper point out another politician's verbal gaffes pretty definitely qualifies as high comedy.