Folsom on New Deal
By David Henderson
Folsom has a lot of energy and humor. The way he told the story of FDR’s attempted cartelization of the U.S. economy with the National Recovery Act was wonderful. Also, he told of the depression of 1921 in which unemployment hit double digits but fell quickly after President Harding slashed marginal tax rates and government spending.
I also learned about a lot of inventions that came along in the early 1920s after marginal tax rates fell. His stories about the inventions of refrigerators, air conditioning, zippers, and, yes, sliced bread were fun. I’m less convinced than Burton is that we can clearly attribute these inventions to the drop in tax rates, although one can clearly make a logical argument that this is likely. Also, when he asked a question about the decline of federal government spending as a percent of GDP during the Clinton administration, he highlighted welfare reform as a major cause. The major cause, in fact, was the decline in military spending.
If you ever get a chance to see this man talk, take it.