… is from page 106 of my colleague Larry White’s vital 2012 volume, The Clash of Economic Ideas (original emphasis):
The NRA [National Recovery Act of 1933] had serious logical flaws as a remedy for depression. The act hoped to restore profits in each industry by restricting the industry’s output, thereby raising its output price and profit margin, as a monopolist would. For any one industry, holding the output of the others constant, profits might indeed be increased by such restrictions. But because the profits thus created were premised on restricting output, they could not be a stimulus to renewed investment or hiring. Output restriction implies that the use of plant and equipment in the industry, as well as employment, will be shrinking and not expanding.
Please let’s hear no more of the alleged economic genius of F.D.R. and of that of his advisors such as Hugh Johnson and Rex Tugwell.