Sunday, April 05, 2009

What to do about the economy

Don't just stand there. Do nothing!

Item 1:
The 1930s would have been a better economic decade had government policy promoted competition in product and labor markets, rather than adopting policies that extended monopoly in product markets, and that set wages above competitive levels which prevented labor markets from clearing.
Item 2:
Why was that slump, over and done with by 1922, so much shorter than the following decade’s? Well, for starters, he said, President Woodrow Wilson suffered an incapacitating stroke at the end of 1919, while his successor, Warren G. Harding, universally considered one of the worst presidents in American history, preferred drinking, playing poker and golf, and womanizing, to governing. “So nothing happened,” Mr. Vedder said.

Of course Mr. Vedder does not wish ill health — or obliviousness — on any chief executive. Still, in his view, when you’re talking about government intervention in the economy, doing nothing is about the best you can hope for from any president.


Anonymous Anonymous said...

4:07 PM  
Anonymous An Historian said...

Yes.. closing your eyes, plugging your ears, and chanting "free market, free market" is the only way to economic prosperity ... or so Mr. Vedder would have us believe.

However, like so many economists, Vedder's understanding of history is tragically warped by his blinkered ideology. The downturn that began just after World War I was short because the U.S. was in a prime position to expand: without any war damage to repair, with a wider access to markets because of the shrinkage of the production of consumer goods by the British, French, and Germans (who, prior to the war, had been the world's chief suppliers of such items, particularly in their empires, China, and South America), with a hugely expanded wartime industry (expanded, incidentally, due to massive government spending) and with a huge surplus of capital due to the flight of money from the warring powers, the U.S. had it all.

Those conditions did not apply to the 1930s. Vedder's comparing apples and oranges and (as is consistent for him) comes up with mush.

9:47 AM  

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