"why would a smart businessman hire people just because he has more money to spend?"
i-node pushes this concept a lot.
I have never pushed this concept. I have, however, pushed the concept that a smart businessman looks at the additional cost of hiring an employee and carefully weigh that against the marginal revenue to be obtained. And if the MR - MC is not >= 0, he won't hire the employee. Period, end of story.
And when you increase the cost of hiring, as FDR foolishly did, the MC goes up and you have to have more MR to offset it before you'll hire anyone. And so nobody hires new employees but the government, which doesn't have to worry about marginal cost or revenue. Which is why, when the government quit hiring, the depression returned. And it took another 6-8 years, until the war was nearly over, for the depression to go away.
FDR's economic policy clearly, indisputably, prolonged the Great Depression. Now, the left will never agree with that, but the Left doesn't know shit anyway. |
