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How Government Prolonged the Depression (WSJ):
The New Deal is widely perceived to have ended the Great Depression, and this has led many to support a "new" New Deal to address the current crisis. But the facts do not support the perception that FDR's policies shortened the Depression, or that similar policies will pull our nation out of its current economic downturn.
So what stopped a blockbuster recovery from ever starting? The New Deal. .... New Deal policies .... violated the most basic economic principles by suppressing competition, and setting prices and wages in many sectors well above their normal levels. All told, these antimarket policies choked off powerful recovery forces that would have plausibly returned the economy back to trend by the mid-1930s.
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Creeping Smoot-Hawleyism may deepen recession" By Martin Hutchinson:
Within three days of promising not to impose further tariffs, Russia and India raised them to protect domestic industries. Russia also tightened import quotas while the EU imposed anti-dumping duties. Creeping protectionism seriously threatens the global economy.
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The Relevance of the Great Depression" by David Friedman:
It could happen again. One can imagine a future in which President Obama, supported by Democratic majorities in both houses, engages in massive interventions in the economy following the massive interventions already under way and the result is a serious economic downturn prolonged for years, perhaps for two terms. If that happens many people--most obviously, the same people who insist that the collapse of Fannie Mae and the associated difficulties are the fault of laissez-faire and deregulation--will conclude that only massive intervention preserved us from a still worse outcome.
