The New New Deal

One reason the Depression lasted until World War II, as Paul Krugman argued this week in the New York Times, is that the New Dealers sabotaged their own plan.

With one hand the New Dealers gave, spending to stimulate the economy. In fact, they put through the same kinds of infrastructure projects that Obama and congressional Democrats are considering today.

With the other hand the New Dealers took away, by raising tax rates -- just as the new president and Congress are likely to do in 2009.

Especially damaging to the prospects of recovery were the heavy levies of the second half of the 1930s, which, as Krugman points out, were key in ``precipitating an economic relapse that drove unemployment back into the double digits.'' President Franklin D. Roosevelt specialized in persecuting the rich via taxes, telling the upper class, point blank, that they had ``met their master.''

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