Let's Not Repeat The New Deal Follies

A couple of years ago Amity Shlaes wrote The Forgotten Man about the utter folly of US economic policy during the Great Depression.

First it was Herbert Hoover that helped prolong a necessary correction (ably assisted by the Federal Reserve System). Then it was Franklin Roosevelt starring in the ten year run of the New Deal Follies.

So if our political leaders want to avoid a repeat of that ten year disaster as the credit crunch continues, maybe they should may attention to Shlaes. There are five things to avoid, she writes in the Washington Post.

1. Don’t give in to protection
2. Don’t blame the messenger (i.e., Wall Street and business leaders)
3. Don’t increase taxes in a downturn
4. Don’t assumes that big government will bring back growth
5. Don’t be inconsistent

The problem is, of course, that our modern Democrats like to do all five of these things. They like protection, they like to demonize the private sector, they like to increase taxes, they like to increase spending, and they like to go off in all directions at once with new programs that may very likely work against each other, like agricultural subsidies and food stamps.

In fact, the way to get out of an economic jam is to free up the economy, lower taxes, lower wasteful spending, encourage business confidence, and make all your actions work together.

It works every time it is tried.