Bad Deal: Fdr's Public Works Only Exacerbated the Depression (Economics) (Franklin D. Roosevelt‪)‬

NEVER HAS THE PHRASE "the worst economic crisis since the Great Depression" been uttered so often. Reporters and commentators routinely discuss our current financial woes as though it were 1930 again. Pundits and even economists urge President-elect Barack Obama to launch a "new New Deal" as soon as he takes office. Thus it might be useful to revisit the original Great Depression and New Deal to see what actually happened and what lessons we might draw for the present crisis. The first thing to understand is that these events did not occur in an environment of laissez faire. Contrary to popular accounts, government intervention in the U.S. economy did not begin in 1933 with the inauguration of Franklin Roosevelt. Before that America was no land of unregulated markets. Far from it. Government had intervened in the economy from the very beginning: the first economic act of the first Congress--on July 4, 1789--was a comprehensive protective tariff. Before long, the banking industry, in particular, faced detailed federal and state regulation. Significantly, branch and interstate banking were forbidden. Free-market banking did not exist, and the gold standard was limited.