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President Obama, during his first press conference last night, said in response to his first question about the economy,
[There are] several who suggested that FDR was wrong to intervene back in the New Deal. They’re fighting battles that I thought were resolved a pretty long time ago.
Well if the President thinks that the New Deal ended the Depression, then the battle must not be resolved. A study published in 2004 by Harold L. Cole and Lee E. Ohanian at UCLA argued that FDR’s policies prolonged the Depression by seven years. Christina Romer, Obama’s Chair of the Council of Economic Advisors writes, “Our estimates suggest that fiscal actions contributed only moderately to recoveries.” Fiscal actions – that’s government spending, the New Deal, the stimulus package, and so on. How can the President claim that the battle is resolved when even his high ranking economic advisors disagree?
For those of you interested in learning more about the causes of the Depression, check out Great Myths of the Great Depression. For a much more detailed look at the Depression, its causes, and its cures, have a look at America’s Great Depression by Murray Rothbard.