The year of 1937 was the year that the New Deal chickens came home to roost. Rapid unionization courtesy of the Wagner Act was raising the cost of labor in an economy swimming in surplus labor. In the first six months of 1937 wages had risen 11 percent. In the steel industry wages went up 33 percent. And higher wages without higher output hurt company profits. Then there was the new tax on wages mandated by the Social Security Act of 1935 that employers and workers started paying in 1937. The Undistributed Profits Tax of 1936 was biting business, and companies were laying off employees. A new concern about balancing the federal budget meant cutting the federal budget from $10.5 billion to $8.6 billion and an end to the vote-buying programs like the Public Works Administration and the Works Progress Administration. The crash when it came was more severe than in 1929. The Dow Jones Industrials collapsed from 190 in August to a low of 114 on November 24. At the end of the year Harold L. Ickes asserted that sixty families who ran the nation were on strike against the rest of the country.
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1929-1939: A Decade that will live in stupidity.
Why Stuck on Stupid?
Seventy years ago the leaders of both US political parties turned away from the policies that had created
an economic powerhouse we call the Roaring Twenties. For ten long years Americans suffered
economic dislocations: deflation, inflation, a four-year economic contraction, endless unemployment, mindless political experiments, and
ruthless attacks on businessmen for political gain as their leaders stayed Stuck on Stupid.
Today, after a twenty-five year economic boom, Americans are once more faced with a political elite
that wants to monkey with success. It wants to raise tax rates. It wants to restrict trade.
It wants to increase government power.
Its time to look back and remind ourselves how it came to be, starting in 1929, that America
got itself Stuck on Stupid. Otherwise it could happen again.