President Obama's "New Deal II" is the Raw Deal too, just as FDR's was. FDR did not bring us out of the Depression, quite to the contrary. He prolonged it. Using data collected in 1929 by the Conference Board and the Bureau of Labor Statistics, two UCLA economists, Harold Cole and Lee Ohanian, conducted a four-year study (in which they concluded that FDR's policies prolonged the Great Depression by seven years. The United States didn't climb out of the Great Depression until 1943, when our manufacturing plants were humming to meet both our own, as well as foreign military demand. President Barack Obama, is often compared to the late, great liberal, iconic, Democrat President, Franklin Delano Roosevelt, who history books have romanticized as being the one responsible for guiding the country through the Great Depression of the 1930's.
FDR's "New Deal," economic plan, that consisted of massive big government spending programs, often gets credit as solving the worst economic crisis of the last century, however, nothing could be further from the truth!Roosevelt's programs were successful, but not in the way that is typically nostalgically reminiscenced. They were extremely popular and successful politically, as evidenced by his being elected to four consecutive terms, something legally impossible today. After Roosevelt had passed away, and during the Eisenhower administration, an amendment to the Constitution was passed limiting presidents to two consecutive terms. I contend that FDR may have been an excellent war-time President, which is where I believe a lot of the romantic memories generate from, but was nothing short of a disaster economically. Fortunately, numbers don't lie, so this is something anyone above a third grade intellect can understand, but beyond the numbers, there lies no better source than Roosevelt's own Treasury Secretary (who also happened to be a close, personal friend, which even leaves more credence to his testimony), Henry Morganthau, who admitted to act to Congressional Democrats in May 1939: "We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!"
What was the unemployment rate in 1931? Answer: 25%What was the unemployment rate in 1939? Answer: 25% (See Graphic)After several years of big government, "stimulus" spending (government spending more than doubled over this period), the unemployment rate? Unchanged!There is no numerical evidence I've seen that can tie any of FDR's programs, however well-intentioned and heartfelt, to any measurable degree of economic activity. In Roosevelt's First Inaugural Address in 1933, he declared: "Our greatest primary task is to put people to work."He failed miserably in accomplishing this goal, but was nevertheless, re-elected again, and again, a total of four times. You see, this president, very much like FDR, has very little to lose, selling the country down the river with his "feel-good" policies. Roosevelt had Herbert Hoover, before him, to blame. Hoover, much like Bush, was not a true fiscal conservative. In 1932, Hoover signed the largest peacetime tax increase in history, raising taxes across the board, including an increase in the top (soak the rich...sound familiar) rate from the mid-20% range to 63 percent! Not exactly a conservative, Ole' Herb. Contrary to popular legend, the stock market didn't bottom in October of 1929. The Dow Jones Industrial Average plummeted to 230, a 23% decline from it's high on October 28th & 29th of 1929. However, it has largely recovered until Hoover's tax increase. Then, only bottomed months after Hoover's Revenue Act (tax increase in preceding paragraph) of 1932, the Dow fell to a decade low of 41.22 on July 8, 1932.
FDR's main New Deal economist, Rexford Tugwell later revealed, "We didn't admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started." Even liberal University of California-Davis, history professor, Eric Rauchway, author of The Great Depression and the New Deal, admitted in Slate that the New Deal "did not end The Great Depression. The war did that."By January of 1940, after seven years of FDR's Big Government, New Deal "experimentation," the stock market had tanked again, falling to 151 and it stayed in the low 100's through most of FDR's extended presidency. And, in terms of price appreciation, it didn't see it's 1929 peak until 1954! So much for the federal government "fixing" our economy. President Obama has George W. Bush, and don't think he won't play that card for eternity. GWB is the best thing that could ever have happened to Barack Obama.
Further Reading: Slate: FDR's Latest Critics
President Obama's "New Deal II" is the Raw Deal too, just as FDR's was. FDR did not bring us out of the Depression, quite to the contrary. He prolonged it.
Using data collected in 1929 by the Conference Board and the Bureau of Labor Statistics, two UCLA economists, Harold Cole and Lee Ohanian, conducted a four-year study
(in which they concluded that FDR's policies prolonged the Great Depression by seven years.
The United States didn't climb out of the Great Depression until 1943, when our manufacturing plants were humming to meet both our own, as well as foreign military demand.
President Barack Obama, is often compared to the late, great liberal, iconic, Democrat President, Franklin Delano Roosevelt, who history books have romanticized as being the one responsible for guiding the country through the Great Depression of the 1930's.
FDR's "New Deal," economic plan, that consisted of massive big government spending programs, often gets credit as solving the worst economic crisis of the last century, however, nothing could be further from the truth!
Roosevelt's programs were successful, but not in the way that is typically nostalgically reminiscenced. They were extremely popular and successful politically, as evidenced by his being elected to four consecutive terms, something legally impossible today. After Roosevelt had passed away, and during the Eisenhower administration, an amendment to the Constitution was passed limiting presidents to two consecutive terms.
I contend that FDR may have been an excellent war-time President, which is where I believe a lot of the romantic memories generate from, but was nothing short of a disaster economically. Fortunately, numbers don't lie, so this is something anyone above a third grade intellect can understand, but beyond the numbers, there lies no better source than Roosevelt's own Treasury Secretary (who also happened to be a close, personal friend, which even leaves more credence to his testimony), Henry Morganthau, who admitted to act to Congressional Democrats in May 1939:
"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!"
What was the unemployment rate in 1931? Answer: 25%
What was the unemployment rate in 1939? Answer: 25% (See Graphic)
After several years of big government, "stimulus" spending (government spending more than doubled over this period), the unemployment rate? Unchanged!
There is no numerical evidence I've seen that can tie any of FDR's programs, however well-intentioned and heartfelt, to any measurable degree of economic activity.
In Roosevelt's First Inaugural Address in 1933, he declared: "Our greatest primary task is to put people to work."
He failed miserably in accomplishing this goal, but was nevertheless, re-elected again, and again, a total of four times.
You see, this president, very much like FDR, has very little to lose, selling the country down the river with his "feel-good" policies. Roosevelt had Herbert Hoover, before him, to blame.
Hoover, much like Bush, was not a true fiscal conservative. In 1932, Hoover signed the largest peacetime tax increase in history, raising taxes across the board, including an increase in the top (soak the rich...sound familiar) rate from the mid-20% range to 63 percent! Not exactly a conservative, Ole' Herb.
Contrary to popular legend, the stock market didn't bottom in October of 1929. The Dow Jones Industrial Average plummeted to 230, a 23% decline from it's high on October 28th & 29th of 1929. However, it has largely recovered until Hoover's tax increase. Then, only bottomed months after Hoover's Revenue Act (tax increase in preceding paragraph) of 1932, the Dow fell to a decade low of 41.22 on July 8, 1932.
FDR's main New Deal economist, Rexford Tugwell later revealed, "We didn't admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started."
Even liberal University of California-Davis, history professor, Eric Rauchway, author of The Great Depression and the New Deal, admitted in Slate that the New Deal "did not end The Great Depression. The war did that."
By January of 1940, after seven years of FDR's Big Government, New Deal "experimentation," the stock market had tanked again, falling to 151 and it stayed in the low 100's through most of FDR's extended presidency. And, in terms of price appreciation, it didn't see it's 1929 peak until 1954! So much for the federal government "fixing" our economy.
President Obama has George W. Bush, and don't think he won't play that card for eternity. GWB is the best thing that could ever have happened to Barack Obama.
Further Reading: Slate: FDR's Latest Critics
Cap,
ReplyDeletefirst, I don't think Obama's playing his cards right politically on the economy. Recent polls show that people are giving him credit for turning the economy around and Obama is declaring early victory. I believe we are very close to a 2nd round of recession and if that happens, Obama's going to own it.
Second, thanks for giving the truth on FDR. It's amazing, because Obama's own plans are far worse than FDRs. A continued recession is guaranteed when you realize that Cap and Trade and National Health Care is going to kill jobs when our economy is in a fragile state. The man is signing the end of his own administration.
Sounds like the New Deal was a Raw Deal....
ReplyDeleteObama's playing a used deck and they're all jokers. Unfortunately, the joke is on us and it's not a funny joke.
ReplyDeleteThanks for writing cg & NG!
TheCapitalist
There are a lot of ignorant instant experts on the Depression these days. Everybody wants to score points by selecting the evidence they like and ignoring the rest. Success or failure depends on what you are measuring. There are a lot of lessons to be learned from the Great Depression, but I suggest you dig really deep into what exactly happened, when.
ReplyDeleteThere were a lot of arguments, just like today. There were many special interests who fought to keep their privileges, just like today. There were extremists of many kinds, just like today. There were good ideas that could not make it through Congress until too late to do any good, or with changes that made them worthless, just like today. There were really bad ideas that had to be squashed and rendered toothless in the same way, just like today.
The two events that most damaged the Market and raised unemployment were when Roosevelt tried to balance the budget in '33 and '38. World War 2 did not end the Depression, it just reduced unemployment as millions were drafted into the military and wartime production. The Depression did not end in economic terms until about 1954.
But what did FDR accomplish? America did not collapse, or turn Fascist, or Communist. People did not starve en masse. Life did improve, slowly, and there were good financial reforms passed in the form of Glass-Steagal, the creation of the FDIC, mortgage & farm loan reforms. Social Security has been a mixed blessing and certainly added to the market collapse of '38, but not all the bad ideas were Democrat.
The very best thing FDR did? End Prohibition. We should kill the War on Drugs, now.
Hey, nice! I'm really really pleased to see "conservatives" actually having a civil, thoughtful discussion on something legitimate like government spending. Seems to me that most of the "right-wingers" out there are instead screaming about terrorists and bombing iran and pushing stupid religious policies. Thank you for showing me that there really are still legitimate debates to be had... the ones where truly reasonable people can find themselves on opposite sides of a debate...
ReplyDeleteKudos.
@Anonymous, thank you for a rather sane breakdown on FDR. This is the same old arguments that Conservatives make (and liberals will respond with 'The war was govt spending, just going into killing people so QED'). It is the same old bull that they flame each other with ad infinitum! Also, amen to killing the war on drugs!
ReplyDeleteWow, what an idiot. Way to pick and choose your facts. Using your logic the US economy should be booming after 7 years of war in Iraq and Afghanistan.
ReplyDeleteA national economy is like a very heavy object in motion, you can not change it's direction quickly. The fact that the unemployment was at 25% in 1931 and 1939 tells you very little. We can only speculate what the unemployment rate would have been if they hadn't acted with the new deal. It's even stupider to think that Obama's actions would have had any effect after less than 100 days.
I do know one thing and that is that Bush's approach to the economy was killing America. One definition of insanity is to keep doing the same thing over and over again when it clearly isn't working. Is Barack Obama's solution better? Only time will tell but I'd rather try something new than to keep doing the same stupid things over and over again. I tiered of hearing that Obama is a Socialist, Obama is a Muslim (as you slyly imply with "Barack Hussein Obama", you're so clever), Obama is the Anti-Christ... Give it a rest already, at this point I'd say he is THE most American president in recent history. Finally a president that puts the American Peoples best interest first, not the wealthy, not big business, not special interests. It's a breath of fresh air.
I find it humorous that so many on the far right demonize Canada's form of government but they are one of the few countries that have been relatively unscathed by this economic meltdown. Speaking from the experience my many relatives in Canada I'd say they've got it figured out pretty well; good health care, they don't worry about changing jobs or losing their jobs, they don't have to worry about making ends meet when they retire, their education system is great, if your capable of going to college the barriers and costs are low, their cities are clean, their infrastructure is well maintained, etc...
By the way, I don't find your site "new, edgy, informative, witty, and humorous" at all. It's the same old far right mantras I've heard all my life.
Why the hate? I didn't call Obama the "Anti-Christ." And, if I call FDR, "Franklin Delano Roosevelt," do you accuse me of trying to out his being a Muslim? Presidents' names are often spoken using their middle-name, so any reference to President Obama's religion is in your head, not in mine. He says he's a Christian, so I'll take him at his word.
ReplyDeleteI can tell you're an Obama worshiper. Nothing he's proposing is new, btw. It's all been tried before. Wake up out of your zombism.
Firstly, I am a staunch libertarian; however, your arguments while not inflammatory are not on the face wholly correct. The GDP did recover nicely because of the New Deal, albeit unemployment continued to increase until WWII. I encourage everyone to look up historical GDP charts for verification. The New Deal also provided many services that kept people from starving to death, literally sadly the private sector failed to step up to an effective level at the time. This current mess we are in and the 2 parties rigged system is very nuanced and complicated and there can be no finger pointing to anyone for a single cause of the continued trouble. I believe that at the core the goals of Liberals and Libertarians, which are opposites, have the same goal. Libertarians believe the government cannot run anything and that private sector can do it better, while Liberals believe the government should run everything. You have to give it to Obama, at least his plans are not and end game but an ends to a day when the government should not need to be involved, a reformist of sorts and lord knows we could use some reform. He has to make tough choices in a horrible situation, my hats off to him despite his monetary policy. And to any idiot that wants to defend Bush when it comes to the economy, you don’t have 1 rational leg to stand on, you have been duped and are a conservative zombie. Obama has inherited the country in total disarray, only time will tell if he manages to turn it around. Do not make half-truth arguments to gain support for your anti socialist movement you do not need to. There are plenty of truthful facts and arguments to make.
ReplyDelete