Giddy leftists have lately been blathering away about the prospects for a new New Deal under an Obama administration. Either they don’t know much history or are banking on the fact that most voters don’t know much history — or both.
The New Deal, as Michael Barone writes here was an economic failure of gigantic proportions. It dragged the country into the swamp of politicization from which it has never esaped. It prolonged and deepened the depression by relying on federal economic planning and intervention rather than the natural market forces of reallocating resources from enterprises where they were losers (Federal Reserve inflation in the late-20s having brought about a profusion of the malinvestments Austrian economists argue must always occur when the government creates artificial credit) and putting them to work where they could be profitably employed.
If you want to be well informed, read Amity Schlaes’ 2007 book The Forgotten Man (which Barone mentions) and also Burt Folsom’s new book New Deal or Raw Deal? I have nearly finished the latter and commend Professor Folsom for the wealth of illuminating detail he includes. For one thing, we learn about what a really nasty, venal man FDR was. Anyone who criticized him was in for a tongue-lashing at best. At worst, FDR was intent on sending out the IRS to prosecute those whom he disliked. Free speech became dangerous for those who dared to question the wisdom or morality of FDR’s visionary policies.
That’s worth keeping in mind. Some of the leftist zealots today are eager to use the power of the state to silence those who don’t fall into line with their thinking. History has an unpleasant way of repeating itself.
