Another brilliant New Deal creation was the Agricultural Adjustment Administration (AAA), and its goal was once again to prop up prices. The AAA adopted a domestic allotment plan under which the Secretary of Agriculture rented plots of land from farmers and plowed under the crops that had been planted there. In addition, "surplus" crops and livestock were destroyed. Farmers and producers of agricultural products were paid not to produce. Flynn writes:
It was a crime against our civilization to pay farmers in two years $700,000,000 to destroy crops and limit production. It was a shocking thing to see the government pay one big sugar corporation over $1,000,000 not to produce sugar. (Flynn, p. 49)
What little knowledge I have about what life was like during the Great Depression I gleaned from John Steinbeck's novel, The Grapes of Wrath. And even in high school, when I first learned about the magnificent New Deal and the man who rescued America from the grips of the Great Depression, I knew that there was something terribly wrong with burning crops and killing pigs at a time when people had to eat fried dough for sustenance.
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The effect of such a bureaucratic scheme of centralized economic planning was to further cripple the economy. The NRA regulations themselves were lunacy. Flynn writes:
A tailor named Jack Magid in New Jersey was arrested, convicted, fined and sent to jail. The crime was that he had pressed a suit of clothes for 35 cents when the Tailors' Code fixed the price at 45 cents. (Flynn, p. 44)
Thus, at a time when nearly a quarter of the population was unemployed, the NRA created artificial shortages in commercial products, while the AAA created artificial shortages in agricultural goods, all in the name of combating price deflation.
In view of FDR's accomplishments, all of which prolonged and worsened the Great Depression, we can only hope that Obama does not actually attempt to emulate FDR. So far, it looks like Obama is going to try to spend his way out of the depression. That will not work. In May of 1939, FDR's Treasury Secretary Henry Morgenthau wrote in his diary:
We have tried spending money. We are spending more than we have ever spent before and it does not work. . . . We have never made good on our promises. I say after eight years of this administration, we have just as much unemployment as when we started. And enormous debt to boot.
The repercussions of Obama's economic policy are yet to be seen, but one thing is for certain -- his administration will not do the one thing that a government can do to allow the economy to recover as quickly as possible: refrain from doing anything. This would mean cutting back government spending, regulating, inflating and taxing.
http://www.campaignforliberty.com/article.php?view=9
