Friday, September 4, 2009

Wage Rates Must Fall!

I've always wondered why the 20'-21' depression, which began with a far greater price deflation than the G.D., was so much shorter. "Aggregate Supply" increases can only explain a small part of that rapid price deflation of nearly %40 (in 1 year!), the most ever I believe...

"Thus, for decades Rothbard and a handful of Misesian economists were virtually alone in maintaining that Hoover's interventionist policies, particularly as they impacted the industrial labor market, were mainly responsible for transforming what should have been a short and sharp recession into the economic catastrophe of epic proportions that we now know as the "Great Depression." Now comes a National Bureau of Economic Research (
NBER) working paper written by a prominent macroeconomist with impeccable academic credentials — and accepted for publication by the influential Journal of Economic Theory — which challenges the Friedman-Schwartz view and lends ample evidence to the Rothbardian position on the genesis of the Great Depression. In writing his article, "Who — or What — Started the Great Depression," UCLA economist Lee E. Ohanian spent four years poring over wage data and culling information from sources related to Hoover and his administration."

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"Who - or What - Started the Great Depression" by Lee E. Ohanian

"There will be depression after inflation, just as surely as the tides ebb and flow." - Pres. Warren Harding