By George C. Leef
Looking at the steady electoral successes of the Democrats during the Great Depression, J. T. Young asks what is different now (“Democrats and the Politics Of Recession,” Wall Street Journal op-ed, Oct. 20). Unfortunately, he misses what I think is the crucial difference: knowledge.
In the 1930s, almost no one understood how bad government policy distorts the economy by misallocating resources. Most Americans thought that the Depression either “just happened” or, in the account given by the left, was due to the inherent instability of capitalism. In contrast, many today understand that the current recession is rooted in the massive distortions caused by the (bipartisan) political crusade for making home ownership affordable to nearly everyone.
Furthermore, in the 1930s very few people understood that government policies meant to stimulate the economy are counterproductive. FDR's numerous plans and programs sounded good to a great majority of Americans and they gave him credit for trying. Today, in contrast, we have abundant evidence that further government interventions can only prolong and increase our economic distress. Many knew that the “stimulus” spending would fail to lower unemployment even before the bills were passed, and now only deep partisans continue to believe that more government action will be our salvation.
Better economic comprehension today is creating very choppy waters for President Obama and his party.
We had no examples of nations that struggle economically and experience increasing social unrest as a consequence of too much government meddling. Today we can look at France, Greece, Argentina, and other countries where statist redistribution is wrecking the nation.
George Leef is director of research for the John William Pope Center for Higher Education Policy.