I believe that the statement, “The Great Depression was caused by a failure of the free market and was resolved by government intervention,” is a myth. It is a myth because after the government stepped in to help out, things got worse. We have had many other recessions that only lasted a couple years WITHOUT government interference. The Great Depression lasted ten years and the government intervened. That shows that without getting help from the government we were still able to fix our economy.

When Franklin D. Roosevelt introduced the New Deal it was very intriguing. It seemed like a perfect plan to most. It was supposed to give Americans jobs. Instead, the amount of people working during that time was even less than before Roosevelt took office. Parts of the New Deal did help out the economy, such as Social Security and unemployment benefits. Other policies that he put in place messed up basic economic principles by suppressing competition, and setting prices and wages in many sectors well above their normal levels. One of the most damaging policies that he put in place was the National Industrial Recovery Act (NIRA). The NIRA gave the President authority to regulate industry and permit cartels and monopolies. The NIRA eliminated excessive competition and we learned in the “Greed” video that competition is a necessity for a prosperous economy.

Government intervention did not get us out of the depression; it only put us into it deeper. FDR wanted to help the economy and he came up with ideas to do it, unfortunately those ideas made things worse rather than better. I believe our economy should be like Hayek’s way of thinking. The government should not interfere with the economy; they should leave it up to the businesses.