One of the most harmfully enduring myths of US economic history is that President Franklin Delano Roosevelt’s policy responses to the Great Depression saved America.
In this John Stossel interview, economics professor Donald J. Boudreaux explains how instead FDR’s “New Deal” made the problem much worse.
A “stupendously stupid” policy illustrating FDR’s total economic ignorance was paying farmers to destroy crops at a time when people were struggling to afford food. 🤦♂️
Another enduring myth was that World War II ended the Great Depression. But reducing employment by conscripting men into the military and sending them off to die overseas didn’t fix the economy. Nor did massive government spending on war and destruction. Destruction is the opposite of productivity.
What finally ended the depression was the war ending and young men coming home and putting their labor toward more productive and industrious endeavors and the end of the “regime uncertainty”, as economist Robert Higgs famously described it, caused by harmful government interventions into the market.
To learn more, read Robert Higgs’ paper “Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War”, published in The Independent Review in 1997.
