- The Washington Times - Friday, February 20, 2009

ANALYSIS/OPINION:

World War I ended in 1918, and our country began to prosper for the next 10 years. It looked as if prosperity would go on forever. Congress thought it was a good time to raise taxes to pay World War I expenses.

About that time, our industries started complaining. They had a hard time competing with the older, established industries of Europe. So Congress put a tariff on goods from Europe. Earlier, in 1913, President Wilson had figured that if the government could control the money supply, there would be no more depressions - ever. So he established the Federal Reserve System. It would carefully monitor economic conditions in 12 selected areas of the United States and restrict the money supply by raising or lowering interest rates as necessary (government-controlled economy).

These three actions together were the main cause of the economic crash of 1929, followed by the worldwide depression of the 1930s. So there you have the recipe: If you raise taxes, raise interest rates, restrict trade and give the government control, you likely will cause a depression. Our new president talks as if he has not learned these lessons. Time will tell.

ERNEST BEHN

Boone, Iowa

• • •

It seems to me that despite all the talk about the Republican free-market/capitalism argument, there has been virtually no discussion of a true free-market solution to the current situation. Even a large number of Republicans and conservatives have either advocated or gone along with the Democratic solution of throwing huge amounts of money at the problem. In the 1930s, as I recall, it was called “priming the pump.” Of course, this phraseology was understood in those days as the same thing as a bailout, and it had the same result, as I fully expect it will have today. In short, President Franklin Delano Roosevelt managed to parlay a two-year recession into an eight-year depression.

I would think it would be obvious to real economic conservatives that what is most needed at this time in our country’s history is to get the Treasury out of the act in any except a minor role. We also should unburden private enterprise of the onerous laws and regulations the federal government has imposed over the years.

If this were accomplished, think what the reaction would be in the energy and utilities industries. Construction of nuclear power plants would be initiated speedily, the oil companies would start up exploration and drilling, the construction of additional refinery capacity would be undertaken, and supporting industries would be brought online. Unemployment would be reduced to normal.

All this could be accomplished at little cost to the governments concerned, except for the overtime incurred to clean up the legislative atrocities now on the books. This should be the Republican legislative response to Democratic profligacy.

JAMES G. McFADDEN

Edgewater, Md.

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