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NewDeal - A nervous crowd gathers across the street from...

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Unformatted text preview: A nervous crowd gathers across the street from the New Yuri: Stock Exchange - assooarm race. on Oct. 24.1929. Five days latm, many investors would lose their life savings in the worst trash in stockvrnaritet history. New 100k at NEW Deal FDR’s frenetic solutions maysctuallyhave lengthened the Depression WASHINGTBH arly In what became the Ehlftayn Great Depression. John Was anmengsnnilar had ever mhapiim cued. "Yes,” he re- plied, “it was called the Dark Jlllsit-5ianditlitsted-itlttyears.” It did take 25 years, until Novem- ber 1954, for the Dow to return to the peak it reached to Sep- tember 1929. So, caution is sensible con- cerning calls for anewNew Deal. The as sumption is that the New Deal tran- quished the Depression. Intelligent, in- formedpeopledifferahoutwhy the Depression lasted so long. But people whosereci for re- covery todayis New Deal should remember that Americas biggest industrial collapses ocourred in 1935', eight moien’i'fiemfism years inmflteNewDeaLIn 1939‘, sf- ter a decade of frantic federal $31M unemployment was Gm In The limiter! More A New History of the Great De- pression, limit:r Siflaes of the Cmmeil on Foreign Relations and Bloomherg News argues that governme olicies, be- the Federfi Reserves drained into labor expenses that left many worlsers primd outofthemarket. In a zoos paper, Harold-I... Cole of UCLAandIeeE. Gha- nianofUCLAandtheFederal Reserve Bank of Minneapolis argued that the Depression would have ended in 1936, EEMHhanigfitMiwereitmsays pellet' 'es tmagmfied' poweroflahorandencouraged thecartelization of industries. These policies expressed the NewDealpremiseFafeidiiagydieDe- presstonwas EXCEE- sive eompetition that first re- duoed pnoes and wages, and empandloymeut om- sunaerdemanilnaforthom ingpaper, Dhanian that “muchoi'tiiedepth theDe- pression ”isexplainedhyI-Ioov- er’spo‘ ,apr-itycnrsoufrofthe NewDe men pressin- higbusinessestoheepnominal wagesfised. Fulthemiore.flooyer’s1932 increase in the top incomevtas rate, from 25 percent to 63 per- oent, was unhelpful. And FDR’s hyperltinefic New Deal created uncertainties that paralysed private-sector decision-malt- ing. Which sounds familiar Russell Roberts of George with“ 11,2?“ "3" acting ' t' r_ or rea- son, politicians have destroyed the rules of the game. There is -noreasontoimrest,noreasonto takefisknoreasonhibepm— dent, no reason to look for humifyourfitmisfailingEv- isupinfiteairand, ass result, only prudent policy istowaitaud seewhstthegotr- ernmentwilldonextThefi-e— netie efforts ofFDRhad the same hnpacn Netinvesonmt was negative through much of - the 193-03." . r Baraolt Dharna says the next stimulus should deliver a “jolt.” His adviser Austen Goolshee saysit must be big “startle the thing into su sion. "' Their theory is thatthe mm 1“” whim treatment. (1sz “rescue plan for the middle class” Includes a tax credit for bushtesses “for each new employee they hire” -in America over the next two mas. The assumption is that inesses will create jobs that would not have been created without the subsidy If so, the subsidy will suEfuse the econo— my witii inefficiencies Herewogoagaiu. Reach fill or will @woahpostrom. ...
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