Amity Shlaes The Rules of the Game and Economic Recovery https://www.hillsdale.edu/news/imprimis/archive/issue.asp?year=2010&month=09 From that article: 1.When you go to research the 1930s, you find that government prevented recovery. Roosevelt and his New Deal policies impeded recovery, especially during the latter half of the decade. In short, the prolonged Depression can be put down to government arrogancearrogance that came at the expense of economic common sense, the rule of law, and respect for property rights. 2.Consider the centerpiece of the New Deals first 100 days, the National Recovery Administration (NRA), : prices needed to be pushed up to make recovery possible, whereas competition constrained recovery by driving prices down. They held that big firms in industrythose too big to failwere to write codes for all members of their sector, large and smallwhich naturally worked to the advantage of those larger firms. As for consumer choice, it was deemed inefficient and an inhibitor of recovery. a. As Henry Morgenthau reports in his diaries, prices were set by the president personally. FDR took the U.S. off the gold standard in April 1933, and by summer he was setting the gold price every morning from his bed. Morgenthau reports that at one point the president ordered the gold price up 21 cents. Why 21, Morgenthau asked. Roosevelt replied, because its 3 x 7, and three is a lucky number. If anyone knew how we set the gold price, wrote Morgenthau in his diary, they would be frightened. 3. As for big labor, the Wagner Act of 1935 proved to be quite destructive. It brought on drastic changes at factories, including the closed shopthe exclusion of non-union members. Another innovation it helped bring about was the sit-down strike, which threatened the basic property right of factory owners to close their doors. Most importantly, it gave unions the power to demand higher wagesand they did. A wage chart for the 20th century shows that real wages in the 1930s were higher than the trend for the rest of the century. This seems perverse, considering the economic conditions at the time. The result was high paying jobs for a few and high unemployment for everyone else. 4. It is not hard to see some of todays troubles as a repeat of the errors of the 1930s. There is arrogance up top. The federal government is dilettantish with money and exhibits disregard and even hostility to all other players. It is only as a result of this that economic recovery seems out of reach. a. The key to recovery, now as in the 1930s, is to be found in property rights. These rights suffer under our current politics in several ways. The mortgage crisis, for example, arose out of a long-standing erosion of the property rights conceptfirst on the part of Fannie Mae and Freddie Mac, but also on that of the Federal Reserve. Broadening FDRs entitlement theories, Congress taught the country that home ownership was a right. b. Property rights are endangered as well by the ongoing assault on contracts generally. A perfect example of this was the treatment of Chrysler bonds during the companys bankruptcy, where senior secured creditors were ignored, notwithstanding the status of their bonds under bankruptcy law. c. Three other threats to property loom. One is tax increases, such as the coming expiration of the Bush tax cuts. More taxes mean less private property. A second threat is in the area of infrastructure. Stimulus plans tend to emphasize infrastructureespecially roads and railroads. And after the Supreme Courts Kelo decision of 2005, the federal government will have enormous license to use eminent domain to claim private property for these purposes. Third and finally, there is the worst kind of confiscation of private property: inflation, which excessive government spending necessarily encourages. Many of us sense that inflation is closer than the country thinks.