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Trump’s Economic Era

economy in 1920-21 with a policy of nonintervention.
As unemployment increased, President Harding refused
to take action, preferring to let prices and wages
continue to fall. Rather than increased activism,
Harding called for smaller government. By late 1921,
commodity prices and economic activity reversed their
decline and started to rise.

Most educators believe that the laissez-faire
policies of President Hoover in the early 1930s
aggravated unemployment, and Roosevelt saved
American capitalism with his New Deal Programs after
1933. Austrians believe that the policies of the New
Deal hampered the recovery. The book Meltdown, by
Thomas Woods Jr., 2009, is a compelling read on the
subject.
President Herbert Hoover favored active fiscal
policies by launching public works projects, raising
taxes, and extending emergency loans to failing firms.
He lent money to the states for relief programs and
encouraged businesses to raise wages.

In the presidential election of 1932, Roosevelt
blamed the Hoover Administration for too much
spending and intervention. Nevertheless, when FDR
took office in 1933, he expanded programs by raising
taxes, established public works and social welfare
programs and encouraged investments by keeping
prices as high as possible. Austrians believe that the
Hoover-Roosevelt policies prevented the economy from
seeking its full employment equilibrium. Austrians
believe that the economic recovery would have come
sooner had the government not intervened.

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