Originally Posted by AustinChief
For anyone interested.. there is a fantastic paper about regime(or policy) uncertainty. It basically shows how the New Deal policies directly caused the Great Depression to last as long as it did. It was only after Roosevelt had died and WWII ended that business leaders felt confident that the government was not going to further expand and cause more uncertainty, so they began to invest heavily again.
Here is an excerpt:
So, the next time your socialist friends point to the New Deal.. explain to them how it was a BAD deal for America.
(caveat: some of the new deal policies and undertakings worked, there is no denying that.. of course most of those were conceived of by Hoover... but the OVERALL effect was chilling and kept us in poverty far longer than needed)
This small portion of the PDF paper had my ears ringing about Praxeology. The author does try to compromise on the use of charts and numbers and calculations. But all the arguments are made outside the tools of making his point. His measuring tool is the confidence the business investors have in what author deems is "property rights." And that is represented anti trust business rulings and laws like Social Security, labor laws and all what is the focus of present discussions about the size and scope of governmental powers compared to unrestricted business dealings. I think it is interesting that surveys were his tool and in the survey of business people for just after the war, had four choices. Single digit opinions existed that things would return to pre New Deal ideas or that the government would be Fascists or Communist in the extreme of central control. The majority of the rest of the respondents saw the Government choices being involved in some areas, this being the majority position of the two, and a more socialist position. Yet he frames these sets as totally anti investment. And yet the ability to plan based upon this framing is not a case of uncertainty being express about governmental practices, but had to then be framed as over burdensome inroads to business practices and profits.
What also is missing here is the amount of start ups outside the business elite that where able to do so as a middle class wealth allowed individuals to start new activities. In other words it was either the very rich invest or new ideas and enterprise would not take place. It didn't allow for monopolistic practices to crush upstart enterprises.