VIENNA - A stalled economy, companies afraid to do long-term investing and federal agencies that think they know what is best for everyone.
America in the 1930s, during the Great Depression, was a difficult time on many fronts, said Amity Shlaes, author and director of the Economic Project at the Bush Center.
Shlaes was the first speaker in the 2013-14 season of the Economic Roundtable of the Ohio Valley on Monday. Her topic was "Go to Jail, Don't Pass Go: Why Business is Like a Monopoly Game, What the Great Depression Can Tell Us About Our Challenges Today."
Amity Shlaes, author and director of the Economic Project at the Bush Center, speaks Monday to the Economic Roundtable of the Ohio Valley. (Photo by Brett Dunlap)
The board game Monopoly came out in the 1930s, created by Charles Darrow, even though the company Parker Brothers rejected it at first, citing it had 52 design errors.
''This game became wildly popular during the (Franklin D.) Roosevelt years,'' Shlaes said. ''By 1935, Monopoly was the rage. This old game, which most of us are familiar with, can tell you a lot about the current economy.''
The game is about real estate, buying property and developing it to make money.
''Some of us play this game ruthlessly,'' Shlaes said. ''For some of us there is no point in playing if we don't have that shot at being the winner.''
In the course of the game, the bank is supposed to play by the rules, but in some instances that bank can overreach.
''The bank does not have to be perfect, just 'not so bad,''' Shlaes said.
During the Great Depression, one in four people was unemployed. To deal with it, leaders brought together intelligent people to formulate plans to get the economy going again.
Attitudes seem to indicate that government believed it knew more than the average people, that big business knew more than little business, Shlaes said of the official history that many people accept from the time.
''To put it in Monopoly terms, in the 1930s America was failing because we had no bank,'' she said. ''There was no one at the table to hand out the Monopoly money and (the wealthy) were out of hand. Roosevelt basically played the bank and eventually got things started again.''
Shlaes wanted to challenge that assumption.
''Starting with Hoover, the government intervened too much,'' she said. ''That is why the Depression lasted as long as it did.
''Roosevelt and the New Deal truly impeded recovery, especially in the later half of the 1930s. Recoveries are like people; they make a choice on how they are going to act. Every year in the 1930s, recovery looked at America and decided to stay away one more year. This went on for 10 years.''
The Gross Domestic Product did not come back until the end of the decade, she said. There have been debates about whether the unemployment in 1937 was 15 or 16 percent.
''The difference is between terrible and awful,'' Shlaes said.
The center of the New Deal was the National Recovery Administration, which Shlaes compared to the present day Affordable Care Act. It was supposed to manage the industrial economy through a series of codes and rules.
Some measures required prices to be raised to get the economy going regardless if it was good business to do so.
People were in violation and ran the risk of going to jail, Shlaes said, adding in some circles competition was considered bad because it drove prices down and hurt recovery.
It was also viewed in some circles that personal choice was bad because it slowed spending.
The government wanted to deal with bigger firms and some companies were getting concessions and contracts, she said.
''That is why the name 'Monopoly' resonated so much,'' Shlaes said.
Shlaes spoke about the Schechter brothers of New York City who challenged the New Deal in how they ran their butchering business in contrast to the rules set up to govern their profession.
The case went to the U.S. Supreme Court, which ruled in the brothers' favor and ruled part of the New Deal was unconstitutional.
''Little businesses, like the Schechters, are the natural driver of recovery,'' she said. ''They weren't allowed to recover.''
Some leaders at the time used the government as an instrument of power to rearrange the entire economy, she said.
''Companies did what they would do now or what they would do at the Monopoly table - they froze,'' Shlaes said. ''They went on what was called a capital strike.
''The people who go on a capital strike are usually the best players. They play Monopoly right; they play to kill.''
These people sat out, retired early and did not do anything, like the doctors today who are retiring early so they will not have to deal with the new regulations coming out, she said.
''There was a shortage of talent (in the 1930s) because they chose to sit it out,'' Shlaes said. ''They were waiting for a happier regime.''
Societal trends have an impact on how the country views different aspects of what is going on.
''The culture can tell you things about the economy that the data cannot,'' Shlaes said.