Diary

The Lessons Of The New Deal

As told by Tyler Cowen. The point made about ensuring the expansion of monetary policy is highly important, but so is the point that Roosevelt’s agricultural subsidies and imposition of industry cartels were utterly and completely disastrous economically. One certainly hopes that taxes will not be raised and that the Bush tax cuts will still have a lot of life left in them during the Obama Administration–quite frankly, if the President-elect wants to encourage some serious economic stimulus, he would do well to take a page from Milton Friedman, recognize that individuals need to sense a long-term increase in their take-home pay, and pledge to make the tax cuts permanent. I am certainly glad to see that Professor Cowen ends his article by noting that our economic recovery will likely come about “for reasons that have little to do with most policy initiatives.” A good point for Team Obama to remember; it might inculcate some humility on their part concerning the limit of government’s power to do good, even as government will now seek to increase even further its power to meddle.