Except that's not what happened jackson, unemployment fell, so obviously any effect from wage inflation towards unemployment was negligible at best, government intervention was a much bigger positive than negative.

Comapnies that try to artificailly increase prices beyond what the market will accept will not survive, as I said its demand driven, look at Sony which is having more and more trouble because they bucked what the market would accept, so your assumption that its an important thing to go after fails on that simple point.

Yes you're exactly right hat government intervention lowered the unemployment rate, kind of defeats your argument that government intervention prolonged the Depression then doesn't it?

Sorry but its reaching to say that the recovery would have been quicker, since it was only when the US actually entered the war that the economy was brought out of the Depression, since our date of entry would not have changed, recovery would have been on the same schedule

Also citing right wing whack job economists isn't going to sway me to your argument, these are the guys who argued that the new deal didn't do anything for unemployment, when it obviously did

Yes, unemployment certainly decreased. Markedly decreasing total hours worked and increasing government spending will obviously effect unemployment numbers. Only someone with an ideological bent would deny that. Nevertheless, this does not signify that artificially inflating wages had negligible to no effect on employment. In fact, unemployment was 25% higher than it should have been absent the wage policies. Had those policies not been enacted, the unemployment rate would have been decidedly lower. I implore everyone to read the paper I posted. They are not right-wing, whack-job economists. They are employed by UCLA and the Federal Reserve Bank in Minneapolis. They also praised certain elements (FDIC, SEC, unemployment benefits) of Roosevelt's New Deal.

Companies will not survive because there are alternatives. Sony bucked market trends and failed because there were alternatives in Nintendo and Microsoft. The problem with the policies is that there were no alternatives. Companies in the same industries were allowed to collusively price fix their products. For example, in the mid-30s, prices for US steel were 50% higher than foreign steel prices. This type of collusion, that the government typically prevented, was allowed by the government.

No, that does not defeat my argument. Not all forms of Government interference have similar effects.  

Yeah and they stated in one of their writings that the new Deal did not restore employment, that alone kills it, if they're going to make a ridiculous statement like that then I question their bias, trying to use the argument that people worked fewer hours is garbage jackson, the fact is the alternative would have been not working at all, these people had the option of being employed at lower hours, but still makign money, or just being on the street, the fact is those employed were responsible for many of the needed infrasturuture improvements made during the depression, and they were able to earn an income that they could then spend

Also Jackson unemployment was already around 25% before the NIRA, so arguing that the wage inflation made the unemployment 25% greater than it shoud be is false, because it was already at that level before the NIRA was passed, it fell during the peirod that the NIRA was in effect.

Actually there is always an alternative, the biggest one is called not consuming, which people were already not doing, the fact is if prices were fixed at a lelvel that the consumer would not bear there was aleways the option of not consuming, things like steel for example is not something that most people need immediately, as steel is a durable good and one can hold off on purchasing a durable good. If the action of the NIRA had been long term, you might have a good argument, but the period it was in effect was too small, to have any real effect.

No, you're right not all government intervention has the same effect, but the intervention of the New Deal did not prolong or cause or make the Depression worse. It was rather that the new deal wasn't large enough and wasn't followed through for as long as it should have been that was the problem

It is not a garbage argument. You even admitted that the alternative would have been unemployment. A workforce willing to work less hours that has received a sudden influx in government spending will see a decrease in unemployment. The statement about restoring employment is slightly hyperbolic, but it is understandable when it is taken into account that people worked 25% fewer hours during the New Deal. The study, regardless of erroneous charges about bias, indicates the damage done by artificial wage inflation and collusive price fixing. 

It is not false. The assertion is not that wage inflation increased unemployment rate to 25% of the enitre workforce, but that it increased by 25%. A cursory calculation shows that the unemployment rate without artifical wage inflation would have been approximately 19%. 

It was not only the steel industry that was price fixed but also durable goods such as textiles. Two years of supressed consumption due to price fixing would have a marked effect on the economy. Still, price fixing did not cease with the end of the NIRA. Antitrust cases perpetuated at NIRA levels until 1939 when FRD admitted that the cartels were impeding recovery and resumed antitrust prosecutions. 

You can continue to assert that, and I will continue to assert that certain provisions prolonged it. I really see no point in continuing if that is the case.

But that's the point you seem to be missing and they missed, the fact is without the intervention they would have been out of work, the fact that they were working less has nothing to do with the government intervention it has to do with the Great Depression, the overnment intervention saved these people from having nothing. SO their argument that the new Del didn't resteor employment is garbage. When given a choice of no intervention and no work and intervention and sone work they took the work. Having full employment required massive government intervention called WW2. Hence why the New deal just wasn't big enough.

Wrong the study doesn't show anything, the unemployment was already there before the wage inflation and collusion, they're trying to blame the New Deal after the fact, the unemployment was already 23.6, before FDR was elected so arguing that the New Deal caused it is false.

It was 23.6 before the wage inflation, how would it be 19%? It fell to below 17% because of the government intervention of the New Deal in his first term

Again Durable good can be put off for a time, and not consumed, hence the concern that cartels could force people to pay more is false.

Your arguments that it was prolonged is based on faulty reasoning, first you say that unemployment was raised to 25% by the wage inflation, and would have been 19%., false, it was over 23.6 when FDR was elected, and probably near 25% when he was actually inaugurated, sothe fact was wage inflation did nothing, in fact during the time the NIRA was in effect unemployment dropped to below 17%, so your argument has no basis, since your figures don't gel with what actually happened.

You assume that they could force people to pay more for durable goods with a short term of two years and hur the economy, durable good are goods that can be put off for later, and the NIRA only asted two years, not enough time to have an effect on the economy when you are talking about goods that aren't immediately replaced.

The fact is that Historical facts prove yours and their's argument false, unemployment was higher than 19% (over 23.6) before the wage inflation and cartels, and fell below 19% (below 17%), during the time that the NIRA was in effect. This shows that recovery was better than your estimates, and that the policies did not prlong the depression.

It is not entirely garbage. The increase in spending decreased the unemployment rate by a few percentage points while people were working markedly less hours. The nation limped along. Anyway, debating the meaning of a hyperbolic statement made in a newspaper article is not something I am interested in.

I meant nondurable goods. Textiles, as with other nondurable goods, were also price fixed during the New Deal. Also, as I said in my previous post, the price fixing continued until 1939...which was more than two years.

Actually, unemployment was not higher before wage inflation. One of Hoover's misguided attempts at curbing the downturn was to artificially inflate wages. It was a new tactic used in conjunction with Smoot-Hawley to combat the downturn. As we can see from the massive increases in unemployment during Hoover's term, it had disastrous effects. Real hourly wages increased greatly in 1930 and 1931 when unemployment was increasing at its fastest rates. Companies finally ceased this foolishness in 1932 which is when the unemployment slowed and stabilized. FDR, for whatever reason, thought it was a good idea to reinstate this practice in conjunction with the aforementioned cartels.

You are missing their point. They are not arguing that those policies caused the Depression. They are arguing that the policies slowed the recovery. Even if unemployment decreased, which it did, it decreased at a slower rate than what it should have. The study effectively demonstrates this. Anyway, I am finished debating this. It will only result in an increasingly silly back and forth.

Nope, they mke the biggest mistkae in their article when they try and compare 1939 and 1929, 1939 shows they are cherry picking, because in 1937 and 38 we had the Reccession within the Depression when FDR tried to balance the budget and recude spending, when he abandoned the New Deal ideas of government intervention.

But again you're missing the point the fact is that they would have been unemployed without the intervention, you're saying that the nation was liming along, well without the government intervention it would have died, forget reduced hours try no hours, you're trying to argue that without the intervention things would have been better, and the fact is no they would have been worse, some work is better than no work and the New Deal gave people some work, without the new Deal no work, so yes, their argument against government intervention becomes garabge, you're trying to argue that Government intervention made the unemployment worse, when in fact it did the opposite, without intervention the unemployment would have been higher.

After 1935, it was illegal for them to act in that manner, so it had nothing to do with government intervention after 1935, any price fixing after that point was totally seperate from government action, the two year action of the government, however had little effect as we saw the economy improve strongly during that two year period, GDP rose fast and Unemployment fell, yet under the previous years of Hoover it didn't, obviously then price fixing and wage inflation are not to blame for the depression, if they were then the actions of the New Deal wouldn't have caused the economy to recover, it would have declined much like it did under hoover.

You argue that FDR decided to reinstate the foolish actions, and yet actual empirical data disagrees with you, unemployment fell, the Smoot Hartley tariff was a stupid idea, but it wasn't FDR's idea it was Hoover, trying to blame FDR's actions, by tying the failure of the tariff to wage inflation fails, because when FDR did it, we had falling unemployment, it was only when he went away from non intervention in 1937 and 38 that unemployment went back up.

The study didn't demonstrate anything, I read it, it tried to use a comparison of 1939 to 1929, which is flawed, because first off in 1939, was after FDR abandoned Keyensian ideas and tried to reduce spending and cut the deficit, and the economy tanked, he abandoned those government intervention ideas you decry and the economy collapsed again, so trying to blame government policies for the situation in 1939 only proves their argument's stupidity, the only reason we were in that mess in 1939 was because of non-interventionist ideas, the same ideas you champion.

I admit I didn't read the last two posts, but I have a question that might put out some of the fire:

Jackson, are you saying that the New Deal prolonged the Great Depression OVERALL, or are you saying that SOME PARTS of the New Deal had a negative effect while others had positive effect that outweighed the negatives?

Well, it did prolong it overall. They were curious as to why the recovery had been insipidly weak, and they found the answer. As concurrent with basic economic theory, price fixing and wage fixing had marked negative impacts on the economy. 

^^We did have a recession in the late 30s, but to say that was after FDR abandoned his Keynesian ideas is specious. FDR enacted a massive multi-billion dollar spending program in early 1938. 

See, you are attempting to paint me as someone opposed to all forms of intervention, and you are treating all forms of intervention as equal. As I demonstrated earlier in this thread, I advocate intervention when it works. However, I do not advocate intervention that impedes our economy. This includes allowing price collusion and artificially inflating wages. 

Yeah, but in 1937, Jackson, FDR unwisely tried to cut back on spending and balance the budget, now that was far worse than wage inflation and allowing price collusion, and that was when the economy went south again, for all your railing against flawed government intervention, our economy went up during that period, it was only when he stopped following that idea that the economy tanked.

Also Jackson FDR did pass the Agricultural Adjustment Act of 1938 and the Fair Labor Standards Act in 1938, but that was the last major legislation he got through because his political power was weakend by the 1937-38 recession, one piece of legislation wasn't enough to undo the damage of those right wing ideas

 Also Jackson, the only reason recovery was weak in 1939 was because 1939 was after the new deal had basically been snuffed out and FDR had unwisely reversed himself, you're blaming the new deal when the real culprit was not sticking to the new deal

Also After 1939, the US starts gaering for war, and that takes deficit spending and government intervention and that brings us out of the Depression