Did FDR Actually Prolong the Great Depression?

The liberal media are all over themselves anointing Barack Obama as not only the second FDR but also the second Abraham Lincoln (which Obama seems to be vainly promoting himself). Since for every action there is an equal and opposite reaction, the blogosphere is already debunking FDR (I don't think anyone would take on Lincoln). Some sites, including Motley Fool and Michelle Malkin, have dredged up a four-year-old research finding that attempted to show how FDR actually prolonged the depression by seven years, thus making it forever remembered as the Great Depression. UCLA economists Harold L. Cole and Lee E. Ohanian, using a unique argument, claim that the National Industrial Recovery Act (NIRA) allowed companies to avoid collusion charges so long as they let wages be determined by collective bargaining. Thus, both wages and prices rose by about 25 percent, choking off both new hiring and new spending. In other words, companies acceded to collective bargaining and then colluded with one another to fix prices.

"High wages and high prices in an economic slump run contrary to everything we know about market forces in economic downturns," Ohanian said. "As we've seen in the past several years, salaries and prices fall when unemployment is high. By artificially inflating both, the New Deal policies short-circuited the market's self-correcting forces."

It's a fun argument, but there's a big problem with their basic thesis. The NIRA was implemented in 1933 and ruled unconstitutional two years later. Read "FDR's policies prolonged Depression by 7 years" and see what you think.