Posted on 01/20/2009 7:27:43 PM PST by SeekAndFind
“We have tried spending money. We are spending more than we have ever spent before and it does not work.”
Sound like Rep. John Boehner of Ohio, or perhaps another exasperated Republican stalwart, lamenting President Barack Obama’s inclination this week to try to spend our way out of the recession?
Listen again:
“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.”
Sound more like a liberal Democrat -- say, Harlem’s Rep. Charlie Rangel -- pushing Obama to “create” jobs?
How about this:
“I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot!”
Surely this must be House Speaker Nancy Pelosi denouncing the Bush administration’s economic policies.
Wrong. Wrong. And wrong again.
The words came from none other than Henry Morgenthau Jr. -- pal, lunch companion and loyal secretary of the Treasury to President Franklin D. Roosevelt.
Morgenthau made this “startling confession,” as historian Burton W. Folsom Jr. calls it, during the seventh year of the New Deal he helped FDR create to combat the rampant unemployment of the Great Depression.
It was May 9, 1939, and Morgenthau was appearing before powerful Democrats on the House Ways and Means Committee.
“In these words, Morgenthau summarized a decade of disaster, especially during the years Roosevelt was in power. Indeed average unemployment for the whole year in 1939 would be higher than that in 1931, the year before Roosevelt captured the presidency from Herbert Hoover,” Folsom writes in his new book, “New Deal or Raw Deal?: How FDR’s Economic Legacy Has Damaged America.”
Indeed, Morgenthau confessed what so many keepers of FDR’s flame won’t admit: The New Deal failed. Massive spending on public works programs didn’t erase historic unemployment. It didn’t produce a recovery.
And neither will a “new” New Deal.
Some of the most desperate defenders of New Deal doctrine are getting a little shrill about this. But it’s an important truth, nevertheless, especially because the same characters insist President Obama must push through a “bold” economic stimulus that depends on hundreds of billions in new government spending to create or “save” jobs.
Budget and financial experts at The Heritage Foundation caution that Obama ought not to repeat Roosevelt’s mistakes. In one such effort, Heritage last week distributed a chart showing that FDR’s programs didn’t succeed in pushing unemployment below 20 percent.
Some observers -- not just hysterical big government junkies but also dispassionate policymakers and news editors -- took issue with the unemployment data. They cited lower numbers.
“Leading FDR slanderers,” David Sirota hyperventilates on Huffington Post, “base their claims that unemployment during the New Deal didn’t go below 20 percent by counting government workers as unemployed.”
Sirota, who calls himself a “political journalist,” adds: “And those claims are being echoed by right-wing rags like the National Review and fringe think tanks like The Heritage Foundation.”
Ouch. If Heritage and our conservative principles are “fringe,” then FDR’s trusted Treasury secretary was what -- a duplicitous traitor?
What to make of a “journalist” who argues that folks on public assistance must be considered employed -- much less “government workers”?
For the record, Heritage plotted New Deal unemployment using widely accepted Census Bureau data (Page 6, Series D, column 10), the “official” numbers that were compiled at the time.
They didn’t count Civilian Conservation Corps workers, prisoners or anyone else who got only “three hots and a cot” as a government employee. Neither does Heritage.
“[I]f we counted people on work relief as employed,” as George Mason University economist Alex Tabarrok writes, “then eliminating unemployment would be very easy -- just require everyone on any kind of unemployment relief to lick stamps.”
So why the different sets of numbers?
Over the years, economists and academics working in good faith calculated “alternative series” of unemployment statistics in hopes of painting a more accurate picture. All begin with census data. The alternative numbers, generally showing somewhat lower levels of unemployment, are available from the Bureau of Labor Statistics.
Thing is, the statistics preferred by Sirota and other FDR acolytes still reveal the New Deal didn’t drive pre-World War II unemployment below 17 percent in any year except 1937 (estimate: 14.3 percent).
These estimates (developed by economist Stanley Lebergott) show joblessness peaking at 24.9 percent in 1933, dropping over the next four years and -- under New Deal, Part 2 -- shooting back up to 19 percent in 1938. Unemployment then decreased to 14.6 percent in 1940 at the advent of a wartime economy and to 9.9 percent with America’s entry into World War II the following year.
The point, as the chart shows, is that the alternative numbers track the census estimates in showing unemployment during the New Deal remained the worst our nation has seen. World War II ended the run.
.The current recession likely will be deep. It could turn out to be more severe than any economic downturn since the Great Depression. Call it the "Great Recession." Still, the economy and financial markets are working through the difficulties, and eventually will stabilize and strengthen on their own.
Amid the current economic pain, Heritage has urged Obama and the new Congress to agree on a stimulus that actually will work by softening the recession and speeding recovery. Here’s how:
• Extend the 2001 and 2003 tax reductions for as long as possible – at least through 2013 -- to prevent tax increases. Better yet, make the tax cuts permanent.
• Reduce tax rates on individuals, small businesses and corporations through 2013 by lowering the top rate by 10 percentage points and reducing rates by similar amounts for taxpayers with lower income levels.
Heritage’s analysis shows this approach would mean 500,000 more jobs this year and a million jobs in 2010, on the way to creating 3.6 million jobs through 2012. Federal tax receipts would fall by $670 billion over five years.
These aggressive changes in tax policy, plus intensive activities by the Federal Reserve, are the best combination of federal actions to end or shorten a recession. In contrast, tax proposals being urged for the Obama stimulus would have almost no effect on the economy. House Democrats’ plan for $550 billion in new spending, in part for infrastructure projects, would do even less for recovery.
Don’t listen to Heritage if you don’t want to. Listen to Henry Morgenthau: “We are spending more than we have ever spent before and it does not work.”
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William Beach, a historian and economist, is director of the Center for Data Analysis at The Heritage Foundation (heritage.org.), where Ken McIntyre, a veteran newspaperman, is the Marilyn and Fred Guardabassi Fellow in Media and Public Policy Studies.
—bflr—
It’s easy to deduce for yourself, just ask, what is the long term for the make work gubbermint jobs? There is none, when the money runs out it’s back to the unemployment line.
You build infrastructure as you need it, only a gubbermint fool thinks they can plan and build infrastructure in advance. In advance of what?
That will never happen under 0bama.
He will sunset those, then institute his own tax package and then say, "See? I said I'd lower taxes!"
Net gain = zero.
Remember, Morgenthau was white, and therefore wrong./sarc
We are essentially, with this economic crisis-—seeing the crackup of FDR’s New Deal programs......It is Obama’s biggest problem.
The moral of Atlas Shrugged is simply this: Politicians invariably respond to crises — that in most cases they themselves created — by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.
We need many more, much louder voices shouting this from the rooftops...the NEW DEAL WAS A FAILURE. It’s time to put FDR in his proper place in history...he was a flop, nothing more.
And, today, we are headed down precisely the same path, but with a much, much higher price tag. This must stop.
It’s time to refresh the tree of Liberty, IMO.
Got this in an email today, is this an accurate quote of Karl Marx?
“Owners of capital will stimulate the working class to buy more, and more, and more of expensive goods, houses and technology, pushing them to take more, and more expensive credits, until these become unbearable. The unpaid debt will then lead to the bankruptcy of banks which will have to be nationalized, and the State will have to take the road which will eventually lead to communism.”
Karl Marx, 1867
When the #2 office of Citi is one of obozo’s biggest fundraiser, the RATS will spend more. Before Christmas the horrific bailout was $750 billion. After January 1 when the RATS too majority control of Congress, the bailout is now $850 billion and the price just keeps on increasing.
no one is listening in the admin
SUPER POST, I LOVE IT.
When President “I wish he was’t” Obambi talks about numbers you can be certain that his office will employ enough people to keep the numbers right, and that also comes with ketchup, but only if you ask for it, Yes it will come to pass that as a dude like myself, that pulls into MCDonalds or other franchise, I will have to pay 2 to 3 times more for that burger. Yea and can I have three scoops of inflation with that?
And stupid old people on fixed incomes voted for this empty tard, well not my ma, and I am damn proud of that.
Doubtful real, in Marx’s era there was little borrowing.
to disagree with the current government economic policy is “fringe”?
Then I am fringe and proud to join at least 58 million others on the “fringe”. It’s not a lonely place to be.
x-sell-ent!!!
Well according to him, China's infrastructure is more advanced than ours.
Could it be perhaps that they're infrastructure is newer, due to the fact that our Wal Mart shoppers have transferred so much of America's wealth to that country over the past 15 years or so, that their factories and export facilities demanded it?
I bet that he never considered that.
China’s infrastructure is more advanced because it was all built in the last twenty-five years.
Furthermore, in China there are no environmental impact statements, no regulations that cannot be ignored, no obstructive lawsuits and best of all, small landowners and businesses can simply be kicked out of the way.
bttt
You jest, right? you obviously haven't been to china where the average person has nothing an walks around with straw shoes and what could best be described as cotton government furnished rags. The TV cities you see aren't 10% of the whole, which for the most part on a good day resembles a third world basket case.
You remember the Olympics, the TV cameras were not allowed out of Beijing. I wonder why. Our TV lords did the same thing with the Soviet Union, and lately Iraq. Haven't you seen enough pictures of that one room Cuban hospital to make you suspicious?
As for the money they get from Walmart shoppers, after they spend what they need to make the factories run, the Communist government spends the rest on the military. You didn't think those were real private comapnies, did you?
Of course! But don't your recall Obama commenting in his campaign about how China was so ahead of the U.S. because of all they're so called "infrastructure"?
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