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No Barry, you do not grow the economy from the middle out

Hatuey said:
I didn't ask about the Great Depression. I asked whether we were in a recession in 1938. However, now that you bring up WWII, how would you say we recovered from the 1937-1938 recession?

A) Free market policies
B) Government action
C) Other

Please explain your choices.
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The depression started in 1930 and ended by some accounts in the early 40's. I don't understand your question about recession.

To bring us out of depression FDR first tried price controls by creating and implementing rules administered by the NRA, or National Recovery Act. Many economists think that the price controls actually lengthened the depression. In a famous case, the US vs. Schecter Poultry, SCOTUS found the price controls to be unconstitutional. It's an interesting case, I encourage you to read about it. When price and wage controls were lifted FDR was forced to cooperate with Carnege, Mellon and some of the other industrialists of the day to help them expand their industries, rather that increase government control over them. That's when the economy started to recover. The US officially entered the war in 1941 and many say that marks the end of the depression.

Let me say that was a move toward free market policies but acknowledge that in our economy there is no truly free market. Some government control is warranted to increase competition and to protect us from force or fraud.

Government action is unavoidable. In this case, understanding that SCOTUS is the third branch of government, I would say that the judicial branch helped to correct the mistake of the executive, so yes, government had a role to play.

The other thing to recognize is that, even though there was a depression, business cycles always play a part in the economy. Even though the depression brought the economy to a grinding halt, nothing lasts forever and eventually normal business cycles came back into play.

An excellent book on the depression was written by Amity Schlays called The Forgotten Man. The Forgotten man was coined by William Graham Sumner, a sociologist at Yale who described a situation in society where person x has a problem and persons a and b come up with a solution but person y has to pay for it. The Forgotten man is person y.

I hope that helps.
 
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