FDR's minimum wage law.

[Perd Hapley]

If I correctly recall, the first federal minimum wage was instituted by FDR, and was intended to allievate the Depression.

Was he just a moron, to be jacking up the price of labor in the midst of 25% unemployment?

Or were the minimum wage and other New Deal measures the cause of the 25% unemployment?

Or was he, like the current administration, unwilling to "waste a crisis"?  That is, was FDR engaged in intentional fear-mongering to persuade Americans to give up their liberties?

[Zardozimo Oprah Bannedalas]

There's a book by John T. Flynn on FDR. The title escapes me, but it was an excellent book. You could possibly find it at your college library.

FDR's cabinet ran a lot of the economic stuff. Some of them were pretty socialistic. FDR, IIRC, liked the way Mussolini ran Italy, and I think some programs were along those lines. I suspect that the minimum wage business was set into motion by 'true believers' with stupid ideas.

[Standing Wolf]

FDR, IIRC, liked the way Mussolini ran Italy...

So did a great many people in those days in both America and the UK.

[Matthew Carberry]

Trains on time etc...

and say what you will about National Socialism, at least it's an ethos.

[Headless Thompson Gunner]

Wages were falling at the time.  I believe the idea was that if you put a floor under wages they wouldn't fall any farther, which would put more money in peoples' pockets to spend, which would spur economic activity.

Yeah, the obvious side affect was that it'd discourage hiring. 

Whether they didn't see that, or they saw it and didn't care, I don't know.  I imagine it was a pretty popular move, politically speaking, at a time when people everywhere were seeing their paychecks shrink.   If politicians back then were similar to politicians today, I doubt they thought things through any farther than that.

[Perd Hapley]

HTG, maybe.  I was reading about the Depression and the New Deal this weekend, and the similarities were disturbing.  Been depressing me a bit.  Eg: FDR and Obama have both claimed that the economic situation was like a war.

A few days ago we were talking about how, even to those of us without tinfoil bonnets, the administration's policies seem calculated to ruin the economy.  But I hope your explanation turns out to hold true in both cases. 

[FTA84]

Wages were falling at the time.  I believe the idea was that if you put a floor under wages they wouldn't fall any farther, which would put more money in peoples' pockets to spend, which would spur economic activity.

Maybe I am wrong and trust in the free market too much.  However, if they didn't try to put a floor on wages, many new businesses would open up as labor (in high supply but low demand) became cheap.  Even socialists think it is better for everyone to have a little then a few some and others none.  Eventually, there would be a critical point where labor was so cheap and goods were so cheap, that the labors could buy those goods.  The only thing that would change would be the purchasing power of a dollar (deflation).

It seems like economic upturns and downturns (based on actual production/employment, ect, ect) are completely unavoidable despite government intervention.  It appears the only point of government intervention is to keep the dollar from deflating.  If an economy has ups and downs, then the purchasing power of the dollar should have ups and downs, so what is the purpose of keeping the dollar from deflating?  Is it like that deal with credit cards where credit card X gives you 1,000,130 super reward points and credit card Y gives you 30 cashback points and a new Krups(TM) coffee machine is 1,000,130 super points at X and 30 cashback points at Y?

[zahc]

It seems like economic upturns and downturns (based on actual production/employment, ect, ect) are completely unavoidable despite government intervention.

I tend to think they are also caused by government intervention. We can't say that the free market naturally has ups and downs, because there are no free markets.

[Hawkmoon]

So fast forward to 2009, and we have a minimum wage that the government itself tacitly undercuts by encouraging allowing illegals to work for less than said minimum wage, thereby stealing all the "jobs Americans don't want to do" and arbitrarily driving the entire wage structure of the free market down. So the .gov gets to have it both ways -- to the American workers, they get to claim they support a decent wage, while to the big capitalists they get the encourage cheap labor and sub-standard working conditions.

It's a win-win situation (for somebody).

[FTA84]

I tend to think they are also caused by government intervention. We can't say that the free market naturally has ups and downs, because there are no free markets.

Well at the very basic level, (free) economics is the (free) exchange of goods and services.  There is no reason they should be constant.  For example, new technology creates ups in cheaper more available goods but downs in the transition of workers (retraining, relocation, ect) to the jobs created by the new wealth.

I think government intervention makes the free market adjust less rapidly.  It makes the highs higher and the lows lower.