These Eight Words . . . .

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These Eight Words Helped Cause the Great Depression

Here are the fateful words that introduced the second section of the Republican Party's 1932 platform, right after a waffling plank on prohibition: "We believe in the principle of high wages."

This was Herbert Hoover speaking. His most cherished economic belief was that wages could not be allowed to fall, and after the Crash of 1929 he vigorously jawboned business leaders to keep wages up. It was not just a question of persuasion. He made it clear that if businesses did not do as he demanded, legislative wage controls would swiftly follow. Business leaders were afraid to defy this edict, and did their best to keep wages where they had been.

This was almost a century ago, but the public and politicians still fall for the same twisted illogic. In his 2014 state of the union address, President Obama said that " I ask America's business leader to raise your employees' wages." In her 2016 campaign, Hillary Clinton said the same thing: "It's a pretty simple formula: higher wages lead to more demand, which leads to more jobs with higher wages...." Hillary did not explain why, given her premise, she was only asking for minor wage boosts. Why not mandate 100X higher wages? And while she was at it, why not also mandate 75% lower prices. The truth of course is that even modest wage and price controls hamper the free price system and sooner or later lead to unemployment and misery for those least able to protect themselves, the poor and the middle class.

Read on:
https://www.lewrockwell.com/2018/07/hunter-lewis/these-eight-words-helped-cause-the-great-depression/


Republicans and modern Democrats are very like-minded.