Economist: Great Depression Caused by Interventionism

A UCLA professor examined the causes behind the Great Depression and published some startling findings. It is "common knowledge" that President Herbert Hoover's non-intervention in the economy and pro-business stance caused the Depression, which lasted from 1929-1941.

Instead, Professor Lee Ohanian has stated that interventionist and pro-labor policies undertaken by the Hoover Administration helped cause and prolong the economic disaster. Ohanian was quoted as stating: "These findings suggest that the recession was three times worse — at a minimum — than it would otherwise have been, because of Hoover."

Hoover responded to the initial economic downturn by placing a freeze on wages-- causing them to stay artificially high and accelerating layoffs. Increasing unemployment further damaged the economy as money evaporated. With less money in the market, less goods were demanded and thus less were made, and employment declined further.

Further, Hoover was afraid of a massive backlash from Big Labor: And because of a series of recent legislative and court decisions that had expanded the power of organized labor, he also worried about the possibility of crippling strikes if such wage cuts were to come to pass.

Perhaps our current leaders could take a note from Hoover, who is widely believed to be one of the worst Presidents in American history.

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Another Obama Nominee in Trouble

Yet another nominee to the Obama Cabinet is facing some problems, as though the Administration needed another headache. Representative Hilda Solis of Florida was tapped as the next Labor Secretary. Now she is facing a tough fight for confirmation from stalwart Republicans.

Senate Republicans also have been questioning the congresswoman’s position on the board of a worker advocacy group, American Rights at Work, since the organization lobbies Congress. They have also probed her support of the Employee Free Choice Act (EFCA), a bill that would help workers organize much more easily into unions if passed. Business groups have lobbied heavily against the bill with many Republicans opposing it.

From this, it appears that yet another potential member of the Cabinet was caught double-dipping by being a lobbyist. Considering President Obama had repeatedly promised not to work with lobbyists, this move appears to render his promise moot.

However, the labor unions have been working hard to get the Congresswoman put on the Cabinet:

“Sadly, conservative Republicans — people who blocked the minimum wage, children’s health insurance — are now using the same old Washington tactics trying to stop Secretary Solis from being confirmed,” said Stern. “She has every qualification for someone we need to lead the Secretary’s role at the Department of Labor.”

This appears to be another lapse of judgment by the Administration. In the rush to get appointees who agree with the President, their qualifications may have been considered second. If this is the case, then the rites of nepotism was considered far more important that actual competence and efficiency. This would be a shame, and a continuation of the same old politics.

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