New essay from Donald J. Boudreaux is chairman of the Department of Economics at George Mason University
"The ever-present demand to "do something" is unfortunately immune to the wisdom counseling that there are some problems best left to sort themselves out. Government efforts to "solve" market adjustments and dislocations typically -- and at best -- supply only short-run relief while making the longer-run situation more dire....
On the eve of entering World War II in 1941, America's economy was still quite depressed -- as it had been for more than a decade. And as economic historian Robert Higgs shows in his 2006 book, "Depression, War, and Cold War," New Deal policies and the prevailing climate of ideas from which they sprang suppressed investment.
The New Deal and the genuine risk of outright socialization of industry in the 1930s kept the American economy in deep doldrums for a much longer time than would have been the case if Uncle Sam just said "laissez faire" and had conspicuously ignored all the Very Smart People who clamored for socialism. No investor, after all, wants to put his assets at stake in a country whose government might tax away or outright confiscate these assets...
History is clear that freer trade means more opportunity and greater and more widespread prosperity. That Uncle Sam might be losing his taste for freer trade is very frightening. "
Read the entire essay here.
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