Re: Confronting an Old Problem May Require a New Deal, by Eduardo Porter
Dear Sirs:
Mr. Porter recently trotted out every discredited economic idea of the New Deal, from Keynes’ fallacious idea of permanent, structural unemployment to the fallacious idea that technology permanently destroys jobs to the fallacious claim that raising the minimum wage is good for employment (the craziest one of all!) to the discredited claim that “the WWII production explosion” ended the Great Depression. In an unhampered free market economy with sound money prices there is no unwilling unemployment, because the only true limit on an economy’s production capacity is the existing pool of labor. Technology makes workers more productive, expanding production and lowering prices. Make-work WPA projects drain resources from the private economy. The minimum wage eliminates from the legal workforce those whose marginal productivity falls below the all-in minimum wage, which, of course, is much, much higher than the new $10.10 minimum. Unemployment in WWII was solved by two factors–placing millions of men under arms, and sending them off to kill and be killed, and the elimination of the most onerous New Deal legislation that hobbled American war production. The Great Depression really didn’t end until 1946 after the worst New Dealer, FDR himself, was gone and a Republican congress was able to end even more anti-business madness.