In the 1930s, Franklin Roosevelt, and a sympathetic Congress, passed laws that kept the Depression going which, after blaming the rich for not investing, he used to justify more laws that kept it going still longer. All that was following what Hoover did. Am I the only one who worries that we could wind up making the same mistakes?
The classic understanding of the Depression is that it was exacerbated from Recession to Depression for three reasons:
1. The Federal Reserve not backstopping a major financial freeze (they kept waiting until it was a "real crisis")
2. Hawley-Smoot tariff hike.
3. Tax hikes in a futile effort to balance the budget in bad times.
The Fed has avoided mistake number one. I fear both candidates, plus the new Congress, will do two and three.
Arthur Schlessinger once said, "There seems no inherent obstacle to the gradualadvance of socialism in the United States through aseries of New Deals.”
Each step represents a further weakening of our liberty, and ain’t good for the economy either.