Saturday, January 10, 2009

New Deal and War Economy - EconTalk podcast review

It is EconTalk's host Russ Roberts's opinion that Roosevelt's New Deal did not repair the economic dire straits the US were in during the 1930's. In fact, he believes this policy only worsened the situation. Although he is the interviewer in the podcast episodes, his views get coverage as well. And this also happened in one of the last issue when he spoke with Robert Higgs about The Great Depression.

Higgs did extensive data research into the economic development in the US during the 1930's and 1940's. His work refutes the commonly held idea that by the beginning of the war, the depression was over and the War Economy itself meant a great boost to American economy and that in fact, as off 1940, it was up and up, thanks to war.

Higgs tries to show how the figures are skewed and how in practice the economy was still recovering and still not back anywhere near the level of 1929. Furthermore, the war meant no boost, it meant an additional burden and life went into yet another economic downturn, with shortages of all sorts. Higgs and Roberts agree to the point that even World War II in the US shows that war is only costly and never good for economy. And Roberts pushes again his view: The New Deal wasn't helping either.

More EconTalk:
The Depression,
Wildlife, Property and Poverty.

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