This is a fascinating National Bureau of Economic Research working paper by Lee Ohanian, an economics professor at UCLA.
Ohanian argues,
I conclude that the Depression is the consequence of government programs and policies, including those of Hoover, that increased labor?s ability to raise wages above their competitive levels.
[snip]
Presidents Hoover and Roosevelt shared similar goals of fostering industrial collusion and increasing real wages and raising labor?s bargaining power. Hoover accomplished these goals during a period of deflation by inducing industry to maintain nominal wages, and by promoting and signing legislation that facilitated union organization and that increased wages above competitive levels, including the Davis-Bacon Act and the Norris-Lagaurdia Act. Roosevelt accomplished these goals with the NIRA and the Wagner Act, both of which raised wages well above competitive levels while increasing industrial collusion.
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.
