It's too bad current G20 leaders don't know about a study by UCLA on the United States' response to the Great Depression. The 1933 "New Deal" by President Franklin Roosevelt is often hailed as the reason the nation emerged out of its economic slump. In fact, the UCLA study showed that the New Deal actually extended the depression by seven years.
Recovery came only after the Department of Justice dramatically stepped enforcement of antitrust cases nearly four-fold and organized labor suffered a string of setbacks, the economists found.Meanwhile, Canadian taxpayers are bracing themselves for federal intervention in the next fiscal year rumoured to be $20-billion to $30-billion. Will it take Canada seven years to recover?
"The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened."
Jan 19 update: this article agrees, with confessions from the New Deal architects themselves.