From UCLA
Public policy made in haste can create as much if not more havoc than the conditions it aims to remedy. That's the trenchant reminder from research on the only American economic collapse that exceeds the current crisis. An economist says that President Hoover's pro-labor actions in the wake of the great 1929 market crash accounted for almost two-thirds of the drop in the gross domestic product and transformed a bad recession into the Great Depression. By propping up wages, encouraging job sharing and other such steps, Hoover prompted a steep decline in manufacturing hours worked, depressing employment and singularly leading to an economic collapse that was three times worse than it might have been, the researcher says. He previously has faulted President Roosevelt, too, for his policies, blaming them for prolonging the Depression for years. The debate over the Great Depression, its causes and remedies is more than academic; stark disagreements over the issues dominate current discussions over actions by President Obama, Congress and, yes, Fed chairman Ben Bernanke, himself an economics scholar on government responses to the Depression.
Pro-Labor Policies by Hoover Faulted as Key Cause of Depression
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