Jon, The New Deal did not work. The average recession lasts from 6 to 18 months. By implementing the New Deal, Roosevelt prolonged the Depression from 1932 to 1941. (It only ended because he manipulated a country that did not want to get involved in a European war into just that war.)
Many of the New Deal programs are still with us because the Demonpublicans have discovered that they can buy votes with them - which is why Roosevelt implemented them in the first place. Roosevelt and his elitist buddies were afraid of riots and thought that the New Deal would help prevent riots. The agricultural production controls concentrated on destroying food so they prevented people from eating. Yes, while people were going hungry, the government was destroying food that had already been grown. What has happened to us recently can only be analyzed once we are aware of a little known reason for our success. Hernando de Soto set out to find out why Peru was only growing slowly, while the USA was growing much faster. His research center is in the Peru, but he pursued this problem around the world and came up with the book "The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else". He came to the conclusion that the West had worked out the crucial institutions a long time ago and no longer remembered their importance. The difference is that the average homeowner in the USA (and the West) has a strong and reliable title to his home. The average homeowner in the developing world, the countries of the former Soviet Union, etc do not have a sound title. Since the home owner in the USA has a reliable title, he is able to get a mortgage on his home to be able to finance his dream of starting a new company. In the developing world, the homeowner is unable to get a mortgage to develop his idea. (There is more to it and I do recommend reading the book.) So libertarians have a straight forward explanation of what has happened. Starting with Carter, expanding under Clinton, pushed by the government in several ways including Fannie and Freddie, banks were forced to make loans to people who they were not convinced could repay them. This escalated the price of houses. After foreclosures started, all these weak loans led to increasing foreclosures. That collapsed the mortgage industry. So the Democrats (with help from some Republicans) ripped the heart out of the miracle that is the USA and reduced us to facing the problems people have in Third World countries. (Reality note - mortgages are still available, but only if you have really good credit.) Bobby On Tue, Feb 10, 2009 at 11:08 AM, Jon Roland <[email protected]>wrote: > The New Deal <http://en.wikipedia.org/wiki/New_Deal> had some > government jobs programs, like the > WPA<http://en.wikipedia.org/wiki/Works_Progress_Administration>and the > CCC <http://en.wikipedia.org/wiki/Civilian_Conservation_Corps>, that > created some low-paying jobs that, combined with agricultural price and > production controls, enabled people to eat. But it did so by diverting such > capital as remained from being invested in new private construction or > manufacturing, what is called capital > formation<http://en.wikipedia.org/wiki/Capital_formation>. > ("Capital" is not money, despite popular misconception. It is the stock of > the the means of production, such as tools, factories, roads, etc.) Now some > of those jobs did build public capital: the WPA built courthouses, roads, > bridges, etc. The CCC did important work to conserve soil and treat the > abuses that led to the Dust Bowl, so that deserves credit. But it should be > noted there were few private housing starts in that period. On the contrary, > owners of private housing were forced to accept additional nonpaying > tenants, so that dwellings designed for one family came to house two or > three unrelated families, most of them noncontributing. > > There was some military buildup, however. Contrary to popular view, it > began well before Pearl Harbor. That is what jumpstarted the reformation of > industrial capital. It was made possible by severely restricting private > consumption, and putting everything into industrial production. (Remember > rationing <http://en.wikipedia.org/wiki/Rationing>?) In effect, the entire > civilian population was mobilized for the war effort. The entire nation > became a military force. > > So "work" is not the right word for the New Deal measures, which enabled a > lot of people to eat and prevented civil disorder, but that "worked" only > because the U.S. was then still largely an agrarian nation, with a smaller > population. We produced enough food to export much of it, and that > production was less dependent on inputs of fossil fuels. The New Deal > measures that had some benefit are still in use, and more of the same cannot > be expected to improve the situation. We have run out of arrows from that > quiver. > > Americans like to imagine the United States is a breadbasket of the world, > but that agricultural production depends on imports of raw materials, > especially fossil fuels, and that importation in turn depends on the > availability of credit to finance it. The 94% decline in the Baltic Dry > Index <http://en.wikipedia.org/wiki/Baltic_Dry_Index> of shipping is > ominous. In the dry land agriculture of the 19th century about 98% of the > energy in a grain of wheat came from the sun and natural rainfall. Today, > more than 95% comes from artificial inputs of mechanical cultivation, > irrigation, fertilizer, pesticides, harvesting, storage, processing, and > transport. If credit stops, imports stop, and food production reverts to > 1890 levels, not enough to feed all the people in the cities. > > Libertarians are going to be hard pressed to convince people that this is > not a failure of capitalism <http://en.wikipedia.org/wiki/Capitalism> or > the market <http://en.wikipedia.org/wiki/Free_market>. In some ways it is. > But it is mainly a failure of large > organizations<http://en.wikipedia.org/wiki/Principal-agent_problem>, > within which the market does not operate. Within large organizations we get > political processes and the undue influences of competing factions studied > by public choice theory<http://en.wikipedia.org/wiki/Public_choice_theory> > . > > We are entering a dark period, long predicted by many of us, in which our > constitutional rights will be threatened. I expect things to get a lot worse > before they can get better, and for that cause, the Constitution Society > exists, trying to preserve a foundation for recovery against a time when > people will be ready for it. > > ma ni wrote: > > What do Libertarians, and Ron Paul, think of Rachel Maddow's > chart last night (trying to advocate obama's government > stimulus/spending plan) supposedly showing how the New Deal DID > work? Her chart showed how jobs rose right after the New Deal. If > it's accurate, how does a good libertarian quickly refute it? > > > -- Jon > > ------------------------------------------------------------------- > Constitution Society 2900 W Anderson Ln C-200-322, Austin, TX 78757 > 512/299-5001 www.constitution.org [email protected] > ------------------------------------------------------------------- > > > -- Toward freedom, Bobby Yates Emory [Non-text portions of this message have been removed]
