19 Jun 2009

Roosevelt the Free Marketeer

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In a Washington Post article Ezra Klein rips John Tamny for giving a (very dumbed down) Austrian spin on the social function of recessions (HT2PK). Klein concludes:

At this moment, federal spending does not exist in competition with household spending. It’s one of the last forces sustaining it. Indeed, the idea that the economy will heal itself if the government only steps out of the way is exactly the thinking that led to the deep recession of 1937. What a pity those lessons haven’t been better learned.

Look, I understand why Christina Romer can argue with a straight face that declining deficits are bad news in a depression. But Klein has upped the ante here. Now Roosevelt wasn’t merely trying to rein in deficits (which after all was his 1932 campaign pledge), but we’re saying it was because he believed in laissez-faire?! I guess he learned his lesson when the Supreme Court overturned his unconstitutional attempts to centrally plan the economy, eh? It’s funny the different paths some of us take to our free market views.

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