What was bad about the National Recovery administration?

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  • 10 years ago
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    Economics author John Steele Gordon wrote that the National Recovery Administration (NRA) was "the first iteration of Roosevelt's New Deal . . . essentially a government-run cartel to fix prices and divide markets. . . This was the most radical shift in the relation between government and the private economy in American history."

    The entire program was based on faulty economics and an unconstitutional expansion of federal power. Further, it concentrated power in the hands of the few, largest surviving firms at the expense of smaller, more nimble companies and barred new competition from entering markets by setting standards of competition that could only be followed by the biggest competitors.

    Study Schechter Brothers v. The United States (1935) for the Constitutionality of the act. Speaking to aides of Roosevelt, Justice Louis Brandeis remarked that, “This is the end of this business of centralization, and I want you to go back and tell the president that we're not going to let this government centralize everything."

    Unfortunately, such political ideas persist today and few jurists maintain the principled opposition to perpetual expansion of federal authority in pursuit of "Progressive" objectives.

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