Changes

As Gene Smiley, emeritus professor of economics at Marquette University, writes in ''The Concise Encyclopedia of Economics'': "Reduced production, of course, is what happens in depressions, and it never made sense to try to get the country out of depression by reducing production further. In its zeal, the administration apparently did not consider the elementary impossibility of raising all real wage rates and all real prices."<ref>[http://www.econlib.org/library/Enc/GreatDepression.html </ref> One study found that such [[New Deal]] policies prolonged the [[Great Depression]] by about seven years.<ref>Meg Sullivan, [http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx FDR's policies prolonged Depression by 7 years, UCLA economists calculate], ''UCLA Newsroom'',  August 10, 2004. Cf. Harold L. Cole and Lee E. Ohanian, "[http://www.jstor.org/stable/10.1086/421169 New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis]," ''The Journal of Political Economy'', Vol. 112, No. 4 (August 2004), pp. 779-816; Harold L. Cole and Lee E. Ohanian, [http://www.economics.hawaii.edu/research/seminars/02-03/02-21.pdf [http://www.journals.uchicago.edu/doi/pdf/10.1086/421169 New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis] (Federal Reserve Bank of Minneapolis Research Department Staff Report XXX), February 2003</ref>

As Gene Smiley, emeritus professor of economics at Marquette University, writes in ''The Concise Encyclopedia of Economics'': "Reduced production, of course, is what happens in depressions, and it never made sense to try to get the country out of depression by reducing production further. In its zeal, the administration apparently did not consider the elementary impossibility of raising all real wage rates and all real prices."<ref>[http://www.econlib.org/library/Enc/GreatDepression.html </ref> One study found that such [[New Deal]] policies prolonged the [[Great Depression]] by about seven years.<ref>Meg Sullivan, [http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx FDR's policies prolonged Depression by 7 years, UCLA economists calculate], ''UCLA Newsroom'',  August 10, 2004. Cf. Harold L. Cole and Lee E. Ohanian, "[http://www.jstor.org/stable/10.1086/421169 New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis]," ''The Journal of Political Economy'', Vol. 112, No. 4 (August 2004), pp. 779-816; Harold L. Cole and Lee E. Ohanian, [http://www.economics.hawaii.edu/research/seminars/02-03/02-21.pdf [http://www.journals.uchicago.edu/doi/pdf/10.1086/421169 New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis] (Federal Reserve Bank of Minneapolis Research Department Staff Report XXX), February 2003</ref>

Both versions of AAA were designed primarily to solve the economic crisis in rural America--farmers had too little money because they produced too much and the prices they received were very low.  Under President [[Herbert Hoover]], the Federal Farm Board in 1931-32 repeatedly urged farmers to cut production so that the abysmally low prices could be lifted; that was a good idea for everyone, but for each individual farmer it was better to grow as much as possible, thus resulting in more surplus and even lower prices.  The farmers welcomed help from the New Deal, but instead of the crop-reduction plan those more on the left wanted a "cost of production" scheme that would have involved vast subsidies. They want prices set by the government (as happened in World War I), but the new Secretary of Agriculture [[Henry A. Wallace]], rejected price fixing, explaining it had worked during the war because demand was much higher than supply, but that exports had shrink and supply was now much higher than demand.

Both versions of AAA were designed primarily to solve the economic crisis in rural America--farmers had too little money because they produced too much and the prices they received were very low.  Under President [[Herbert Hoover]], the Federal Farm Board in 1931-32 repeatedly urged farmers to cut production so that the abysmally low prices could be lifted; that was a good idea for everyone, but for each individual farmer it was better to grow as much as possible, thus resulting in more surplus and even lower prices.  The farmers welcomed help from the New Deal, but instead of the crop-reduction plan those more on the left wanted a "cost of production" scheme that would have involved vast subsidies. They want prices set by the government (as happened in World War I), but the new Secretary of Agriculture [[Henry A. Wallace]], rejected price fixing, explaining it had worked during the war because demand was much higher than supply, but that exports had shrink and supply was now much higher than demand.