Hacker Newsnew | comments | show | ask | jobs | submit login

That's partially correct. FDR wasn't just trying to buy farmers votes, he really did believe that high prices were good for the economy. He correctly realized that the deflation being experienced in the US was bad, but he thought that artificially increasing prices would fix things, but in reality people didn't have the money to pay the new, higher, prices and all of FDR's efforts to raise the prices of things (the NRA especially) just ended up making the depression worse.

Now, FDR did a lot of things and some of them worked pretty well. He'd touched off the fastest industrial expansion in US history a few months before he killed it with the NRA, for example. I'm not aware of any current economic school of thought that would endorse the idea that price supports actually helped with the depression. A Keynesian would say that you have to run a deficit to increase the aggregate demand, a Monetarist would say you need more money to increase aggregate demand, a Supply-Sider would say you can't help, a Socialist would say the state needs to take over the means of production, etc.

Now, I do have friends from states that rely on agricultural subsidies, and their high school history textbooks evidently did wax poetic about how awesome agricultural subsidies were, but that isn't in most American's high school educations.




Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | DMCA | Apply to YC | Contact

Search: