Thursday, February 5, 2009

Did New Deal and World War II help depression?

Thomas E. Woods, Jr., the author of Politically Incorrect Guide to American History (listen to it here) says: “Don’t be ridiculous.”

In this lecture he explains how New Deal only hurt economy and WWII did not help it. He gives a thorough explanation of “broken window fallacy” (why destruction or taxation can never create wealth or boost anything in grand scale).

You can find the rest of Mr. Woods’s lecture here.

(Thanks to Shmulie for prompting me to look for this lecture.)

1 comment:

shmulie said...

That audio looks long! Me, listen? Don't be ridiculous.

How does he explain the recovery?

Since I haven't listened I'll take a shot at it myself, advocating for my client, Mr. Devil.

Is War wasteful? Yes. Is the free market? Yes. But maybe the difference lies in that in a controlled economy, what the government gains in alleviation of inefficiency, it more than loses in its inability to account for the changing forces of a dynamic economy. But maybe when the planning is centralized with not the goal of allocating resources, but warmaking, well that's something they're rather proficient at (thereby reducing inefficiency).

In the rear view mirror, it's a little macroeconomic for my tastes.