Something that is important to consider when dealing with examples of economic policy during the past Is to view the past through the lens of the past rather than the Lens of the present. The saying goes that hindsight is 20/20, and as such we need to keep in mind that something that sounds completely irrational now may have
sounded very feasible then. with this in mind I would like to address the condition that made the NRA
sound feasible .
My understanding of the NRA is that it was enacted in order to combat the growing problem of overproduction which many economists of the time viewed as the cause of the Great Depression The theory was that when companies were producing too much thereby creating a loss, because of which companies wouldn't hire more people, and would lay off current workers. the people that companies weren't hiring would have no income and would buy less goods with resulting in more overproduction and the vicious cycle would start again. also people were desperate for a solution to the depression and may not have considered the full consequences of the act.
Keeping this in mind the NRA was economically sound especially with the influx of fascist/communist ideas
floating around at the time. In fact the biggest reason I can see why the NRA didn't succeed was because the
problem it addressed was not in fact the cause of the Great Depression.
There's still a lot of debate about the actual cause of the Great Depression and I won't claim to know the answer but I believe it was due to too much credit and low interest rates
sound feasible .
My understanding of the NRA is that it was enacted in order to combat the growing problem of overproduction which many economists of the time viewed as the cause of the Great Depression The theory was that when companies were producing too much thereby creating a loss, because of which companies wouldn't hire more people, and would lay off current workers. the people that companies weren't hiring would have no income and would buy less goods with resulting in more overproduction and the vicious cycle would start again. also people were desperate for a solution to the depression and may not have considered the full consequences of the act.
Keeping this in mind the NRA was economically sound especially with the influx of fascist/communist ideas
floating around at the time. In fact the biggest reason I can see why the NRA didn't succeed was because the
problem it addressed was not in fact the cause of the Great Depression.
There's still a lot of debate about the actual cause of the Great Depression and I won't claim to know the answer but I believe it was due to too much credit and low interest rates
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ReplyDeleteI'd need a more substantial post to give you credit. Is there any way for you to format it properly? It's unreadable as of now.
ReplyDelete