Video: why the New Deal was a failure

December 13, 2011

Obama’s first term (1) saw a full-throated return to Keynesian economics — massive increases in government spending, debt, and (if they had gotten their way) taxes to try to stimulate the economy. As we all know, it failed miserably.

For the 2012 election, Obama has doubled-down on the Keynesianism to openly advocate policies of higher taxation, more regulation, more government-directed redistribution of income, and, yes, even more flushing tax money down the toilet stimulus spending. Obama and his people claim that this worked before under FDR, so we should do it again.

Wrong. The history of the New Deal (and its predecessor under Hoover) is almost the opposite of what we’ve been taught in school. The biggest misrepresentation of all is that it worked.

It didn’t. The New Deal was a failure that only made the misery worse, as this video from the Center for Freedom and Prosperity argues:

The real lesson we should take from the economic policies of the Hoover and FDR administrations is that big-government, statist interventions don’t work. Instead, they exacerbate the problem by hindering the self-healing properties of a free market.

In 2012, we have a choice between a party that advocates economic policies that are an empirical failure — the Democrats and the their Hoover/FDR interventionism– and one (2) offering those shown to be an empirical success, the policies of Ronald Reagan and, yes, Warren Harding.

For most voters (3), once armed with the facts, the choice becomes clear and easy.

RELATED: For more on the truth about Hoover, FDR and the New Deal, let me recommend the following:

  • Ohanian and Cole, “New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis” (Journal of Political Economy, 2004) While behind online subscriber walls, you should be able to find it at any university library.
  • Amity Shlaes, The Forgotten Man
  • Jim Powell, FDR’s Folly

Footnotes:
(1) And, to be fair, the last year of Bush’s second term.
(2) Sure, the Republicans have been far from perfect, and the eventual nominee himself may be tempted by big-government “solutions,” but they’re still a far sight better than the (Social) Demcorats.
(3) Other than a certain core that, for whatever reason, prefers to cling bitterly to their cherished myths and bad ideas and be infantilized wards of the state.

(Crossposted at Sister Toldjah)


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