How to deal with a recession
"So a president early in his first term is faced with a recession that includes a stubborn unemployment rate. What does he do? Why he calls a conference on unemployment to bring together business, labor, and political leaders to figure out what should be done to solve the problem by urging cooperation and planning rather than competitive, market-driven solutions."
From Steven Horwitz at
The Austrian Economists
He continues:
Obama? Nope, Herbert Hoover. Not only several as president in 1929, but also as Secretary of Commerce during the 1920-21 recession. In the 1920-21 case, it was all a lot of hot air as none of his plans went into practice and the economy recovered reasonably quickly.
The 1929 case was a different story, as it was out of a series of such conferences that emerged the promises to maintain nominal wages in the face of falling prices. Those promises were sufficiently kept to drive unemployment up even higher, eventually to the 25% range that characterized the depths of the Great Depression.
Thankfully nothing that bad seems to have come out of this week's conference, but given the current administration's Hoover-like distrust of private enterprise as well as its Hoover-like track record, perhaps it's only a matter of time.
Nothing like sudying the previous recessions to see what worked and what did not...
Posted by DaveH at December 5, 2009 3:11 PM