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Sometimes you can read a book that will change your mind on some fundamental issue.
Rarely, however, is there just one page that can undermine or destroy a widely held belief. But there is such a page — Page 77 of the book "Out of Work" by Richard Vedder and Lowell Gallaway.
The widespread belief is that government intervention is the key to getting the country out of a serious economic downturn.
The example often cited is President Franklin D. Roosevelt's intervention, after the stock market crash of 1929 was followed by the Great Depression of the 1930s, with its massive and long-lasting unemployment.
This is more than just a question about history.
Right here and right now there is a widespread belief that the unregulated market is what got us into our present economic predicament, and that the government must "do something" to get the economy moving again. FDR's intervention in the 1930s has often been cited by those who think this way.
What is on that one page in "Out of Work" that could change people's minds? Just a simple table, giving unemployment rates for every month during the entire decade of the 1930s.
Those who think that the stock market crash in October 1929 is what caused the huge unemployment rates of the 1930s will have a hard time reconciling that belief with the data in that table.
Although the big stock market crash occurred in October 1929, unemployment never reached double digits in any of the next 12 months after that crash.
Unemployment peaked at 9%, two months after the stock market crashed — and then began drifting generally downward over the next six months, falling to 6.3% by June 1930. This was what happened in the market, before the federal government decided to "do something."
What the government decided to do in June 1930 — against the advice of literally a thousand economists, who took out newspaper ads warning against it — was impose higher tariffs, in order to save American jobs by reducing imported goods.
This was the first massive federal intervention to rescue the economy, under President Herbert Hoover, who took pride in being the first president of the United States to intervene to try to get the economy out of an economic downturn.
Within six months after this government intervention, unemployment shot up into double digits — and stayed in double digits in every month throughout the entire remainder of the decade of the 1930s, as the Roosevelt administration expanded federal intervention far beyond what Hoover had started.
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Posted By: thebassman(855) on 6/17/2010 | 9:20 PM ET
O isn't about equal opportunity - he & rest of dems are only for opportunity of their preferred (as in contributors, unions etc) constituents. The point of the article is O & Dems are replicating, and then some, the POLICY DECISIONS the CREATED the DEPRESSION. They have added MORE DEBT to date than the entire history of US. My kids & grandkids will have a MUCH TOUGHER ROAD than any of us - all thanks to pols in general, O & dems currently in power in particular. O about control - always has been
Posted By: moonhawk(5) on 6/17/2010 | 9:19 PM ET
More like "affirmative action" than "equal opportunity"... and living proof that it's a bad idea.
Posted By: Hanuman(180) on 6/17/2010 | 8:52 PM ET
Creating strawmen to know down may be fun, but it doesn't reflect reality. BHO has been the beneficiary of an effective meritocracy an opportunity that he took full advantage of to earn his way to becoming the first African American president. Our Constitution talks about equal opportunity and if anyone was ever for that, its BHO.
Posted By: Brownknows(2070) on 6/17/2010 | 7:46 PM ET
Sadly BHO believes capitalism is evil, that wealth must be redistributed back to the rightful owners (poor/limosine liberals/rulers) through any means legal or extra-legal; see Chrysler takeover, BP shake down, pay czars, EPA regulations, and mandated purchase of a product. Pure ideologue with a smooth tounge, until his first speech from the oval office. Eyes are opening, and Americans don't like what they see. If only BHO had an ounce of Sowell's intelligence & integrity. Live free or die.
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