The price-cutting tailor vs. the New Deal

The price-cutting tailor vs. the New Deal September 17, 2010

George Will gives an object lesson about what happened to an ordinary citizen when the government presumed to control the economy:

The crime scene at 138 Griffith St. has changed in 76 years. Today it is a barber shop. In 1934, it was a tailoring and cleaning establishment owned and run by Jacob Maged, 49.

With his responsibilities as a father of four, Maged should have shunned a life of crime. Instead, he advertised his criminal activity with a placard in his shop window, promising to press men’s suits for 35 cents. This he did, even though President Franklin Roosevelt’s New Dealers, who knew an amazing number of things — his economic aides were not called a “Brains Trust” for nothing — knew that the proper price for pressing a man’s suit was 40 cents.

The National Recovery Administration was an administrative mechanism for the National Industrial Recovery Act of 1933, which envisioned regulating the economy back to health by using, among other things, codes of fair competition. The theory was that by promoting the cartelization of labor by encouraging unions, and the cartelization of industries by codes that would inhibit competition, prices would be propped up and prosperity would return.

Soon there were more than 500 NRA codes covering the manufacture of products from lightning rods to dog leashes to women’s corsets. Amity Shlaes, in “The Forgotten Man,” her history of the New Deal, reports that the NRA “generated more paper than the entire legislative output of the federal government since 1789.” Businesses were asked to display the Blue Eagle, an emblem signifying participation in the NRA. Gen. Hugh “Iron Pants” Johnson, an admirer of Mussolini who headed the NRA, declared, “May God have mercy on the man or group of men who attempt to trifle with this bird.

Maged trifled by his 5-cent violation of New Jersey’s “tailors’ code,” written in conjunction with the NRA. On April 20, 1934, he was fined $100 — serious money when the average family income was about $1,500 — and sentenced to 30 days in jail. The New York Times reported that Maged “was only vaguely aware of the existence of a code.” Not that such ignorance was forgivable. It is every citizen’s duty to stay up late at night, if necessary, reading the fine print about the government’s multiplying mandates.

“In court yesterday,” the Times reported, “he stood as if in a trance when sentence was pronounced. He hoped that it was a joke.” Maged was an immigrant from Poland, which in the Cold War would become familiar with the concept of “economic crimes” and the use of criminal law for the “re-education” of deviationists.

Actually, his sentence was a judicial jest. After Maged spent three days in jail, the judge canceled the rest of his sentence, remitted the fine and, according to the Times, “gave him a little lecture on the importance of cooperation as opposed to individualism.” The judge emphasized that people “should uphold the president . . . and General Johnson” in their struggle against — among other miscreants — “price cutters.” Then, like a feudal lord granting a dispensation to a serf, the judge promised to have Maged “measure me for a new suit.”

Maged, suitably broken to the saddle of government, removed from his shop window the placard advertising 35-cent pressings and replaced it with a Blue Eagle. “Maged,” reported the Times, “if not quite so ruggedly individualistic as formerly, was a free man once more.” So that is freedom — embracing, under coercion, a government propaganda symbol.

via George F. Will – Trifle with the government? Just ask Jacob Maged.

"Yours is a very complex field of study, this seems to me. I think of ..."

The New Atheist Crack-up
"This is a complex issue on which different parts of the Christian Church will emphasize ..."

Faith + Reason, Logos and Logic
"SALSo I looked over the piece you linked to, primarily in Section 8 ("Philosophical/metaphysical implications"), ..."

Faith + Reason, Logos and Logic
"That there is overlap doesn't really falsify my statement. Such overlap is rather common when ..."

The New Atheist Crack-up

Browse Our Archives

Follow Us!


TRENDING AT PATHEOS Evangelical
What Are Your Thoughts?leave a comment
  • Tom Hering

    Is there a state – yes, state – in the union that doesn’t have pricing laws and regulations?

  • Tom Hering

    Is there a state – yes, state – in the union that doesn’t have pricing laws and regulations?

  • Bryan Lindemood

    Well, that’s depressing.

  • Bryan Lindemood

    Well, that’s depressing.

  • Winston Smith

    Whenever you hear them talk about how the troops are overseas fighting for our freedoms, remember this.

    The real threat to freedom is not from al-qaeda but from al-Washington.

  • Winston Smith

    Whenever you hear them talk about how the troops are overseas fighting for our freedoms, remember this.

    The real threat to freedom is not from al-qaeda but from al-Washington.

  • Tom Hering

    Let’s look at the story without Wills’ ideological coloring. Pricing laws and regulations had been established – something most businesses favor. Maged wasn’t in compliance. He was made an example for others who weren’t in compliance. He was then shown mercy, the example having been made. (Released after three days, fine returned in full.) Did Maged go out of business? Wills doesn’t tell us. Or did Maged increase his profits? Hmm. It would be nice to know how the story really ended. (Rather than jumping straight to his death by cancer – as if that were caused by the NRA!)

  • Tom Hering

    Let’s look at the story without Wills’ ideological coloring. Pricing laws and regulations had been established – something most businesses favor. Maged wasn’t in compliance. He was made an example for others who weren’t in compliance. He was then shown mercy, the example having been made. (Released after three days, fine returned in full.) Did Maged go out of business? Wills doesn’t tell us. Or did Maged increase his profits? Hmm. It would be nice to know how the story really ended. (Rather than jumping straight to his death by cancer – as if that were caused by the NRA!)

  • Porcell

    Tom, states have some pricing statutes that effect the margins, though by and large goods and services in the private economy reflect market realities. The NRA price controls were eventually overruled by the Supreme Court. Roosevelt tried to get around this by packing the court with increased numbers, though the people rebelled at this and Congress rejected it.

    The best book on the authoritarian Progressive and Liberal movements is Jonah Goldberg’s Liberal Fascism: The Secret History of the American Left, From Mussolini to the Politics of Meaning

  • Porcell

    Tom, states have some pricing statutes that effect the margins, though by and large goods and services in the private economy reflect market realities. The NRA price controls were eventually overruled by the Supreme Court. Roosevelt tried to get around this by packing the court with increased numbers, though the people rebelled at this and Congress rejected it.

    The best book on the authoritarian Progressive and Liberal movements is Jonah Goldberg’s Liberal Fascism: The Secret History of the American Left, From Mussolini to the Politics of Meaning

  • Tom Hering

    “… states have some pricing statutes that effect the margins …”

    That would just be control of prices by a different mechanism.

  • Tom Hering

    “… states have some pricing statutes that effect the margins …”

    That would just be control of prices by a different mechanism.

  • One of my friends just received a certified letter telling him he got kicked out of Obama’s Loan Modification Program for ‘not submitting his documents before the deadline.’ He showed me a Fedex receipt and a confirmation of delivery (complete with a signature from the recipient) showing that he submitted the documents two weeks before the deadline.

    Another friend whose son receives SSI (Supplemental Social Security Income) says that the amount of the checks changes every month. The SS Admin. sent him a bunch of checks at once that were obviously overpayments. When he called to inquire, they told him that they were ‘back payments’ and to deposit the checks into his bank. He did so. He then received a notice in the mail saying he had been overpaid and they would deduct the amount of overpayment in installments from his future checks, The amount of the deduction changes every month.

    Needless to say, my confidence in the government’s ability to do even simple things is not very high, and I cringe when I hear they are taking over student loans, mortgages, and health care.

    Not only are we going socialist, but we are getting a big dose of Soviet/Eastern European style ineptitude.

  • One of my friends just received a certified letter telling him he got kicked out of Obama’s Loan Modification Program for ‘not submitting his documents before the deadline.’ He showed me a Fedex receipt and a confirmation of delivery (complete with a signature from the recipient) showing that he submitted the documents two weeks before the deadline.

    Another friend whose son receives SSI (Supplemental Social Security Income) says that the amount of the checks changes every month. The SS Admin. sent him a bunch of checks at once that were obviously overpayments. When he called to inquire, they told him that they were ‘back payments’ and to deposit the checks into his bank. He did so. He then received a notice in the mail saying he had been overpaid and they would deduct the amount of overpayment in installments from his future checks, The amount of the deduction changes every month.

    Needless to say, my confidence in the government’s ability to do even simple things is not very high, and I cringe when I hear they are taking over student loans, mortgages, and health care.

    Not only are we going socialist, but we are getting a big dose of Soviet/Eastern European style ineptitude.

  • Porcell

    Tom, cut the bologna. Tell us about any federal or state that has a price statute that would come close to what this tailor dealt with, or for that have any effect on the price of goods ands services in the private economy.

    We do have anti-trust and other federal regulations that have an effect on prices at the margin.

  • Porcell

    Tom, cut the bologna. Tell us about any federal or state that has a price statute that would come close to what this tailor dealt with, or for that have any effect on the price of goods ands services in the private economy.

    We do have anti-trust and other federal regulations that have an effect on prices at the margin.

  • ptl

    “He gazed up at the enormous face. Forty years it had taken him to learn what kind of smile was hidden beneath the dark mustache. O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving beast! Two gin-scented tears trickled down the sides of his nose. But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother!” 1984, George Orwell

    This is how the world ends….not with a bang, but with a whimper 🙁

  • ptl

    “He gazed up at the enormous face. Forty years it had taken him to learn what kind of smile was hidden beneath the dark mustache. O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving beast! Two gin-scented tears trickled down the sides of his nose. But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother!” 1984, George Orwell

    This is how the world ends….not with a bang, but with a whimper 🙁

  • Tom, since when have price controls worked? Come one; draw a standard graph with a minimum or maximum price decreed. Either the minima or maxima are meaningless, or they create shortages.

    Just ask anyone in the two highest price cities for rent in the country; New York City and San Francisco. Guess which two are the only two major cities with rent control? See the pattern?

    Yes, those already in the business love government interference, because it prevents others from competing with them on that basis. However, it’s not good economics.

  • Tom, since when have price controls worked? Come one; draw a standard graph with a minimum or maximum price decreed. Either the minima or maxima are meaningless, or they create shortages.

    Just ask anyone in the two highest price cities for rent in the country; New York City and San Francisco. Guess which two are the only two major cities with rent control? See the pattern?

    Yes, those already in the business love government interference, because it prevents others from competing with them on that basis. However, it’s not good economics.

  • DonS

    Tom, I don’t get your point. Are you defending minimum price laws? On what basis and for what purpose? To protect unions? To protect cartels? To deny a certain number of people on the lower end of the wage scale access to certain products and services? Because you think government is smarter than the market?

  • DonS

    Tom, I don’t get your point. Are you defending minimum price laws? On what basis and for what purpose? To protect unions? To protect cartels? To deny a certain number of people on the lower end of the wage scale access to certain products and services? Because you think government is smarter than the market?

  • ptl

    Now a days, if Maged’s company was big enough, he would move operations over to a third world nation in order to keep his prices low. Funny how the government sees nothing wrong with that, and may well encourage with some favorable tax breaks….what’s up with dat?

  • ptl

    Now a days, if Maged’s company was big enough, he would move operations over to a third world nation in order to keep his prices low. Funny how the government sees nothing wrong with that, and may well encourage with some favorable tax breaks….what’s up with dat?

  • sg

    ” Pricing laws and regulations had been established – something most businesses favor. Maged wasn’t in compliance. He was made an example for others who weren’t in compliance. He was then shown mercy, the example having been made.”

    This is not freedom.

    It is tyranny of the majority.

  • sg

    ” Pricing laws and regulations had been established – something most businesses favor. Maged wasn’t in compliance. He was made an example for others who weren’t in compliance. He was then shown mercy, the example having been made.”

    This is not freedom.

    It is tyranny of the majority.

  • George A. Marquart

    In 1934 I was not yet born, and it would be another 15 years before we emigrated to the USA, But when I went to school here, I learned that what was called “The Great Depression” was the result of private enterprise running rampant and exercising greed to the point that the system could no longer support itself. Herbert Hoover’s response was to do nothing, except to give private enterprise more opportunity for enrichment. As I understand it, most people today agree that the efforts of the government were needed to restore the economy.
    The Roosevelt administration, as I understand it, was not interested in “controlling the economy.” They were very much interested in preventing the breakdown of society and in relieving the misery of millions of people who lacked even the mere opportunity to provide for themselves. The people in the administration did what they thought was right. Obviously, they were not perfect.
    As Christians, we know that by their nature people are evil, lust for power and wealth, despise their needy neighbors, and hate God. This is true of “capitalists” as well as of “socialists.” But for some reason, even Christians object when the government applies the Law to keep peoples greed in check, even though they learned that this is a proper function of the Law.
    Today, when control of the economy is much firmer in the hands of government than it was in 1934, with both Republicans and Democrats having contributed to this state of affairs, Maged would not have come to court as helplessly as he did. He would have challenged the government’s case in court, and from what we know of the current state of jurisprudence, he would most likely have won, and would maybe even have collected civil and criminal damages. Ironically, he would have done it in an economic climate which bears some resemblance to 1934. The only reason that it is not as severe as it was then, is that government, or the Law, has put more limitations on people’s greed, so that the depression is not as severe.
    But what I resent most about this story is the implication that the story of Maged proves the rightness of a particular economic theory. People like George Will are educated enough to know that this is not true. But because they cannot adjust their ideology to the demands of real life, or rather, because they do not want to recognize the needs of other people, they preach hate against anyone who opposes it.
    Peace and Joy!
    George A. Marquart

  • George A. Marquart

    In 1934 I was not yet born, and it would be another 15 years before we emigrated to the USA, But when I went to school here, I learned that what was called “The Great Depression” was the result of private enterprise running rampant and exercising greed to the point that the system could no longer support itself. Herbert Hoover’s response was to do nothing, except to give private enterprise more opportunity for enrichment. As I understand it, most people today agree that the efforts of the government were needed to restore the economy.
    The Roosevelt administration, as I understand it, was not interested in “controlling the economy.” They were very much interested in preventing the breakdown of society and in relieving the misery of millions of people who lacked even the mere opportunity to provide for themselves. The people in the administration did what they thought was right. Obviously, they were not perfect.
    As Christians, we know that by their nature people are evil, lust for power and wealth, despise their needy neighbors, and hate God. This is true of “capitalists” as well as of “socialists.” But for some reason, even Christians object when the government applies the Law to keep peoples greed in check, even though they learned that this is a proper function of the Law.
    Today, when control of the economy is much firmer in the hands of government than it was in 1934, with both Republicans and Democrats having contributed to this state of affairs, Maged would not have come to court as helplessly as he did. He would have challenged the government’s case in court, and from what we know of the current state of jurisprudence, he would most likely have won, and would maybe even have collected civil and criminal damages. Ironically, he would have done it in an economic climate which bears some resemblance to 1934. The only reason that it is not as severe as it was then, is that government, or the Law, has put more limitations on people’s greed, so that the depression is not as severe.
    But what I resent most about this story is the implication that the story of Maged proves the rightness of a particular economic theory. People like George Will are educated enough to know that this is not true. But because they cannot adjust their ideology to the demands of real life, or rather, because they do not want to recognize the needs of other people, they preach hate against anyone who opposes it.
    Peace and Joy!
    George A. Marquart

  • George A. Marquart

    I am unable to post my comment. I have altered some words that may be offensive, like hate and greed, but nothing helps. Is there a length limitation? My post has 2609 characters.
    Someone please help.
    George A. Marquart

  • George A. Marquart

    I am unable to post my comment. I have altered some words that may be offensive, like hate and greed, but nothing helps. Is there a length limitation? My post has 2609 characters.
    Someone please help.
    George A. Marquart

  • ptl

    George….try breaking it into several, smaller comments?

  • ptl

    George….try breaking it into several, smaller comments?

  • Porcell

    George, make sure you don’t have soci@lism in the post.

  • Porcell

    George, make sure you don’t have soci@lism in the post.

  • George A. Marquart

    Thanks for your help ptl and Porcell.

    Since my more comprehensive response is apparently not acceptable (yes, s@ocialism did occur, but I wasted my time fixing words like e@vil, h@ate, and c@riminal), here are just a few thought starters:

    1. Was the Hoover administration’s response to the Great Depression effective? (Effectiveness would be determined by how one defines the nature of the problem and the desired result)
    2. Was the purpose of the New Deal to limit individual freedom?
    3. Does logic permit making a generalization from a specific instance?
    4. Do bad things happen only during Democratic administrations?
    5. With all of the oppressive government regulations under which we suffer, would Maged possibly have been vindicated in a court of law today?
    6. Do we view laws differently, depending on whether or not we are Christians?
    7. Does human nature, as we know it to be as Christians, affect how business is conducted?
    8. Does human nature, as we know it to be as Christians, affect our understanding of what laws are needed?
    9. Has any law ever been passed in any country which did not harm someone?
    10. Has it ever been the intent of any American administration to pass laws which they know to be harmful to the country?
    11. Is limitation of individual freedom a necessary component of any law, by definition?
    Peace and Joy!
    George A. Marquart

  • George A. Marquart

    Thanks for your help ptl and Porcell.

    Since my more comprehensive response is apparently not acceptable (yes, s@ocialism did occur, but I wasted my time fixing words like e@vil, h@ate, and c@riminal), here are just a few thought starters:

    1. Was the Hoover administration’s response to the Great Depression effective? (Effectiveness would be determined by how one defines the nature of the problem and the desired result)
    2. Was the purpose of the New Deal to limit individual freedom?
    3. Does logic permit making a generalization from a specific instance?
    4. Do bad things happen only during Democratic administrations?
    5. With all of the oppressive government regulations under which we suffer, would Maged possibly have been vindicated in a court of law today?
    6. Do we view laws differently, depending on whether or not we are Christians?
    7. Does human nature, as we know it to be as Christians, affect how business is conducted?
    8. Does human nature, as we know it to be as Christians, affect our understanding of what laws are needed?
    9. Has any law ever been passed in any country which did not harm someone?
    10. Has it ever been the intent of any American administration to pass laws which they know to be harmful to the country?
    11. Is limitation of individual freedom a necessary component of any law, by definition?
    Peace and Joy!
    George A. Marquart

  • George A. Marquart

    Since my more comprehensive response is apparently not acceptable here are just a few thought starters:

    1. Was the Hoover administration’s response to the Great Depression effective? (Effectiveness would be determined by how one defines the nature of the problem and the desired result)
    2. Was the purpose of the New Deal to limit individual freedom?
    3. Does logic permit making a generalization from a specific instance?
    4. Do bad things happen only during Democratic administrations?
    5. With all of the oppressive government regulations under which we suffer, would Maged possibly have been vindicated in a court of law today?
    6. Do we view laws differently, depending on whether or not we are Christians?
    7. Does human nature, as we know it to be as Christians, affect how business is conducted?
    8. Does human nature, as we know it to be as Christians, affect our understanding of what laws are needed?
    9. Has any law ever been passed in any country which did not harm someone?
    10. Has it ever been the intent of any American administration to pass laws which they know to be harmful to the country?
    11. Is limitation of individual freedom a necessary component of any law, by definition?
    Peace and Joy!
    George A. Marquart

  • George A. Marquart

    Since my more comprehensive response is apparently not acceptable here are just a few thought starters:

    1. Was the Hoover administration’s response to the Great Depression effective? (Effectiveness would be determined by how one defines the nature of the problem and the desired result)
    2. Was the purpose of the New Deal to limit individual freedom?
    3. Does logic permit making a generalization from a specific instance?
    4. Do bad things happen only during Democratic administrations?
    5. With all of the oppressive government regulations under which we suffer, would Maged possibly have been vindicated in a court of law today?
    6. Do we view laws differently, depending on whether or not we are Christians?
    7. Does human nature, as we know it to be as Christians, affect how business is conducted?
    8. Does human nature, as we know it to be as Christians, affect our understanding of what laws are needed?
    9. Has any law ever been passed in any country which did not harm someone?
    10. Has it ever been the intent of any American administration to pass laws which they know to be harmful to the country?
    11. Is limitation of individual freedom a necessary component of any law, by definition?
    Peace and Joy!
    George A. Marquart

  • Winston Smith

    “V1agrA” and “Nigerian finance minister” will make it through the sp@m filter, but not soc1alizm, for some reason.

    ptl @ 9, apt quotation.

  • Winston Smith

    “V1agrA” and “Nigerian finance minister” will make it through the sp@m filter, but not soc1alizm, for some reason.

    ptl @ 9, apt quotation.

  • George A. Marquart

    Thanks ptl and Porcell, my revised posting did not make it on the first try either.
    All I had to do is to take out my thanks to you and it went through. Go figure.
    George

  • George A. Marquart

    Thanks ptl and Porcell, my revised posting did not make it on the first try either.
    All I had to do is to take out my thanks to you and it went through. Go figure.
    George

  • ptl

    George….you’re welcome and now you know one of the insiders tricks, ha!

    The short answer to all or your questions is “maybe” but don’t ask me to elaborate……my comments would be way too long and/or “nasty” to get past the content filter 🙂

    Peace and joy to you too!

  • ptl

    George….you’re welcome and now you know one of the insiders tricks, ha!

    The short answer to all or your questions is “maybe” but don’t ask me to elaborate……my comments would be way too long and/or “nasty” to get past the content filter 🙂

    Peace and joy to you too!

  • Porcell

    George, Roosevelt, with his NRA and other measures extended the Depression by several years. He did well initially stabilizing the banking system, though his extreme meddling and anti-business rhetoric caused investors to play it safe with their funds. The book to read on this is The Forgotten Man: A New History of the Great Depression Amity Shlaes.

    For a short article on this by by Shlaes, read FDR Was a Great Leader, But His Economic Plan Isn’t One to Follow including:

    But Roosevelt the economist is unworthy of emulation. His first goal was to reduce unemployment. Of his own great stimulus package, the National Industrial Recovery Act, he said: “The law I have just signed was passed to put people back to work.” Here, FDR failed abysmally. In the 1920s, unemployment had averaged below 5 percent. Blundering when they knew better, Herbert Hoover, his Treasury, the Federal Reserve and Congress drove that rate up to 25 percent. Roosevelt pulled unemployment down, but nowhere near enough to claim sustained recovery. From 1933 to 1940, FDR’s first two terms, it averaged in the high teens. Even if you add in all the work relief jobs, as some economists do, Roosevelt-era unemployment averages well above 10 percent. That’s a level Obama has referred to once or twice — as a nightmare.

    The second goal of the New Deal was to stimulate the private sector. Instead, it supplanted it. To justify their own work, New Dealers attacked not merely those guilty of white-collar crimes but the entire business community — the “princes of property,” FDR called them. Washington’s policy evolved into a lethal combo of spending and retribution. Never did either U.S. investors or foreigners get a sense that the United States was now open for business. As a result, the Depression lasted half a decade longer than it had to, from 1929 to 1940 rather than, say, 1929 to 1936. The Dow Jones industrial average didn’t return to its summer 1929 high until 1954. The monetary shock of the first years of the Depression was immense, but it was this duration that made the Depression Great.

    Sadly, there are distinct parallels on economic policy between Obama and FDR.

  • Porcell

    George, Roosevelt, with his NRA and other measures extended the Depression by several years. He did well initially stabilizing the banking system, though his extreme meddling and anti-business rhetoric caused investors to play it safe with their funds. The book to read on this is The Forgotten Man: A New History of the Great Depression Amity Shlaes.

    For a short article on this by by Shlaes, read FDR Was a Great Leader, But His Economic Plan Isn’t One to Follow including:

    But Roosevelt the economist is unworthy of emulation. His first goal was to reduce unemployment. Of his own great stimulus package, the National Industrial Recovery Act, he said: “The law I have just signed was passed to put people back to work.” Here, FDR failed abysmally. In the 1920s, unemployment had averaged below 5 percent. Blundering when they knew better, Herbert Hoover, his Treasury, the Federal Reserve and Congress drove that rate up to 25 percent. Roosevelt pulled unemployment down, but nowhere near enough to claim sustained recovery. From 1933 to 1940, FDR’s first two terms, it averaged in the high teens. Even if you add in all the work relief jobs, as some economists do, Roosevelt-era unemployment averages well above 10 percent. That’s a level Obama has referred to once or twice — as a nightmare.

    The second goal of the New Deal was to stimulate the private sector. Instead, it supplanted it. To justify their own work, New Dealers attacked not merely those guilty of white-collar crimes but the entire business community — the “princes of property,” FDR called them. Washington’s policy evolved into a lethal combo of spending and retribution. Never did either U.S. investors or foreigners get a sense that the United States was now open for business. As a result, the Depression lasted half a decade longer than it had to, from 1929 to 1940 rather than, say, 1929 to 1936. The Dow Jones industrial average didn’t return to its summer 1929 high until 1954. The monetary shock of the first years of the Depression was immense, but it was this duration that made the Depression Great.

    Sadly, there are distinct parallels on economic policy between Obama and FDR.

  • DonS

    George @ 14: I must strongly dispute your assertion that “Herbert Hoover’s response [to the beginning of the Great Depression] was to do nothing, except to give private enterprise more opportunity for enrichment.” Unfortunately, his response instead, was to institute the Smoot-Hawley Tariff Act of 1930, which worsened the depression by sharply increasing protectionist tariffs, and the Revenue Act of 1932, which raised U.S. tax rates across the board, with the rate on top incomes rising from 25 percent to 63 percent. The estate tax was doubled and corporate taxes were raised by about 15 percent. Would that he had done nothing, for these sharp tax increases pitched the economy into a spiral from which there was no recovery for nearly a decade.

    Of course, I don’t believe that Roosevelt’s intention was just to aggrandize power. He wanted to help. It’s just that his statist policies were hopelessly heavy handed, and, as is the way of politics, often tilted toward his political friends, as was the case in this story. There is no good reason to believe that you can improve an economy by setting minimum prices. That effort was clearly one to undergird and support higher than market union wages.

    George Will is not preaching “hate” by recounting this story. He is, rather, warning that the past is prologue, and we do not want to return to the failed road of using coercive government regulation to try to improve our economy. Arguing against a political philosophy is not preaching hate. But denying an individual the right to compete in the marketplace, and declaring with a heavy hand “May God have mercy on the man or group of men who attempt to trifle with this bird” is unAmerican and beneath this great nation.

  • DonS

    George @ 14: I must strongly dispute your assertion that “Herbert Hoover’s response [to the beginning of the Great Depression] was to do nothing, except to give private enterprise more opportunity for enrichment.” Unfortunately, his response instead, was to institute the Smoot-Hawley Tariff Act of 1930, which worsened the depression by sharply increasing protectionist tariffs, and the Revenue Act of 1932, which raised U.S. tax rates across the board, with the rate on top incomes rising from 25 percent to 63 percent. The estate tax was doubled and corporate taxes were raised by about 15 percent. Would that he had done nothing, for these sharp tax increases pitched the economy into a spiral from which there was no recovery for nearly a decade.

    Of course, I don’t believe that Roosevelt’s intention was just to aggrandize power. He wanted to help. It’s just that his statist policies were hopelessly heavy handed, and, as is the way of politics, often tilted toward his political friends, as was the case in this story. There is no good reason to believe that you can improve an economy by setting minimum prices. That effort was clearly one to undergird and support higher than market union wages.

    George Will is not preaching “hate” by recounting this story. He is, rather, warning that the past is prologue, and we do not want to return to the failed road of using coercive government regulation to try to improve our economy. Arguing against a political philosophy is not preaching hate. But denying an individual the right to compete in the marketplace, and declaring with a heavy hand “May God have mercy on the man or group of men who attempt to trifle with this bird” is unAmerican and beneath this great nation.

  • George, Murray Rothbard wrote a book about the Great Depression in which he argues–rather persuasively–that it was created by loose fiscal policy in the 1920s (largely aimed at keeping fixed exchange with the fiat pound vs. the gold dollar), and that Hoover and Roosevelt extended it by greatly expanding the scope of government and by controlling markets.

    My favorite example from where I grew up; when thousands in Chicago had not tasted meat on a long time, Roosevelt’s USDA was telling farmers near Michigan City to kill their hogs to prop up prices. Roosevelt’s fear of deflation (unfounded) bailed out borrowers at the expense of savers, killing capital formation for a decade.

  • George, Murray Rothbard wrote a book about the Great Depression in which he argues–rather persuasively–that it was created by loose fiscal policy in the 1920s (largely aimed at keeping fixed exchange with the fiat pound vs. the gold dollar), and that Hoover and Roosevelt extended it by greatly expanding the scope of government and by controlling markets.

    My favorite example from where I grew up; when thousands in Chicago had not tasted meat on a long time, Roosevelt’s USDA was telling farmers near Michigan City to kill their hogs to prop up prices. Roosevelt’s fear of deflation (unfounded) bailed out borrowers at the expense of savers, killing capital formation for a decade.