Posted on 08/30/2003 11:59:46 AM PDT by Cathryn Crawford
FDR's Raw Deal Exposed
August 30, 2003
BY THOMAS ROESER
For 70 years there has been a holy creed--spread by academia until accepted by media and most Americans--that Franklin D. Roosevelt cured the Great Depression. That belief spurred the growth of modern liberalism; conservatives are still on the defensive where modern historians are concerned.
Not so anymore when the facts are considered. Now a scholar at the libertarian Cato Institute has demonstrated that (a) not only did Roosevelt not end the Depression, but (b) by incompetent measures, he prolonged it. But FDR's myth has sold. Roosevelt, the master of the fireside chat, was powerful. His style has been equaled but not excelled.
Throughout the New Deal period, median unemployment was 17.2 percent. Joblessness never dipped below 14 percent, writes Jim Powell in a preview of his soon-to-be-published (by Crown Forum) FDR's Folly: How Franklin Roosevelt and His New Deal Prolonged the Great Depression. Powell argues that the major cause of the Depression was not stock market abuses but the Federal Reserve, which contracted the money supply by a third between 1929 and 1933. Then, the New Deal made it more expensive to hire people, adding to unemployment by concocting the National Industrial Recovery Act, which created some 700 cartels with codes mandating above-market wages. It made things worse, ''by doubling taxes, making it more expensive for employers to hire people, making it harder for entrepreneurs to raise capital, demonizing employers, destroying food . . . breaking up the strongest banks, forcing up the cost of living, channeling welfare away from the poorest people and enacting labor laws that hit poor African Americans especially hard,'' Powell writes.
Taxes spiraled (as a percentage of gross national product), jumping from 3.5 percent in 1933 to 6.9 percent in 1940. An undistributed profits tax was introduced. Securities laws made it harder for employers to raise capital. In ''an unprecedented crusade against big employers,'' the Justice Department hired 300 lawyers, who filed 150 antitrust lawsuits. Winning few prosecutions, the antitrust crusade not only flopped, but wracked an already reeling economy. At the same time, a retail price maintenance act allowed manufacturers to jack up retail prices of branded merchandise, which blocked chain stores from discounting prices, hitting consumers.
Roosevelt's central banking ''reform'' broke up the strongest banks, those engaged in commercial investment banking, ''because New Dealers imagined that securities underwriting was a factor in all bank failures,'' but didn't touch the cause of 90 percent of the bank failures: state and federal unit banking laws. Canada, which allowed nationwide branch banking, had not a single bank failure during the Depression. The New Deal Fed hiked banks' reserve requirement by 50 percent in July 1936, then increased it another 33.3 percent. This ''triggered a contraction of the money supply, which was one of the most important factors bringing on the Depression of 1938--the third most severe since World War I. Real GNP declined 18 percent and industrial production was down 32 percent.''
Roosevelt's National Recovery Administration hit the little guy worst of all, Powell writes. In 1934, Jacob Maged, a 49-year-old immigrant, was fined and jailed three months for charging 35 cents to press a suit rather rather than 40 cents mandated by the Fed's dry cleaning code. The NRA was later ruled unconstitutional. To raise farm prices, Roosevelt's farm policy plowed under 10 million acres of cultivated land, preventing wheat, corn and other crops from reaching the hungry. Hog farmers were paid to slaughter about 6 million young hogs, protested by John Steinbeck's The Grapes of Wrath. New Deal relief programs were steered away from the South, the nation's poorest region. ''A reported 15,654 people were forced from their homes to make way for dams,'' Powell writes. ''Farm owners received cash settlements for their condemned property, but the thousands of black tenant farmers got nothing.''
In contrast, the first Depression of the 20th century, in 1920, lasted only a year after Warren Harding cut taxes, slashed spending and returned to the poker table. But with the Great Depression, the myth has grown that unemployment and economic hardship were ended by magical New Deal fiat. The truth: The Depression ended with the buildup to World War II.
Big deal. Today, those taxes are around 22 per cent, and climbing.
There is now new evidence that these measures against the Japanese were instigated by a Stalinist in the U.S. Dept. of Treasury. An Assistant Secy. of the Treasury was instructed by Stalin's U.S. agents to embargo US steel scrap from the Japanese, in order to foment ill will between Japan and the US. This kept the Japanese preoccupied with the US, rather than their old enemy, the Russians. This embargo precipitated the attack on Pearl Harbor.
Harry Dexter White, the Soviet agent, stayed on in the Treasury Department for many years, as well as remained a communist. He had considerable involvement in the creation of the International Monetary Fund, the infamous IMF. You can see a photo of "Harry the Red", on the IMF's web site. They are quite proud of this mischievous little commie. One of FDR's many "New Dealers", that gave America the Raw Deal as often as they could.
Plenty of Democrats do refuse to recognize that high taxes can stifle the economy. No intelligent ones, though. If you want to argue that proves there are a surplus of dumb Democrats you won't get any argument from me.
FDR had no idea what to do about the Depression
No one had any idea back then and I don't think things have improved much.
True, unfortunately.Interestingly Jews in Stalin's Russia did much better than in
Dachau and Buchenwald. What, precisely, is interesting about that? Do you hope to convince me that Stalin wasn't as bad as Hitler, and if so why should I care? Being better than Hitler is such faint praise that I can't hear it at all.
Obviously you're some sort of isolationist left-over.
But facts are facts. During WWII Jews were treated better in Stalin's Russia than in most of Eastern and Western Europe. You can fill in the explanations.
I will buy both, AND recall that FDR was "served" by a number of Soviet agents in State as well as in his own staff.
(a ) they constituted a legitimate threat during wartime,Take your choice.
(b) because war-time prejudice endangered them, or
(c) because local California agricultural interests wanted their land.
d: racial profiling.
Oh, Larry, Larry. There's more than a surplus of dumb Democrats, there is a veritable abundance of the stupid buggers.
I made no such point. The point I did make was the presence of infection by soviet agents in the Roosevelt administration and their influence upon international events that were contrary to the interests of the United States.
Henry Ford was duped into publishing some anti-semitic propaganda. But that was not the source of the German onslaught against the Jews.
The German Jews had been the target of Socialist propaganda in Germany for a Century, before Hitler took up the cause. Marx had proposed the idea of rallying your support by focusing on a single target; he had also blamed the sins of Capitalism on a Jewish mindset, and suggested a world without Jews. Hitler simply grabbed the tactic and ran with it. (You need to understand that when Hitler rose to power, the Nazis and Communists had been in a bitter, no holds barred war for control of the lowlife mobs in the German streets.)
On the subject of arrogance, have you ever seen pictures of FDR? Hitler may have been an arrogant ranter. FDR was the most arrogant snob, ever to sit in the oval office.
To understand that Hitler and Stalin were demonstrably smarter than FDR, is not a cheap shot. Both came from humble backgrounds, and quickly achieved supreme, absolute power in their nations. FDR came from a gilded background, had the advantage of the fact that his cousin was a very popular President, etc.; he was also obviously used by others--the very subject of this thread, relates to the policies that others imposed upon him domestically--or sold him, if you prefer. Hitler and Stalin called their own depraved shots.
Finally, Stalin played FDR as a complete fool at Teheran and Yalta.
As for my comment that Roosevelt's policies prolonged the Depression, because he hand-cuffed the innovative, you said:
You've simply made this up. As well, economics was and is largely propaganda. In my college days - the '60s - economists were still teaching that unemployment was an impossibility in a free-market economy. Things haven't improved much.
I hardly made that up. In 1930, we had 122,000,000 people, close to being an optimum number, but still not over-crowded, with still claimable land in Alaska and a few other areas. If the market had simply been allowed to adjust, free of gimmicks, it is true that many people would have had to take a cut in remuneration to find jobs, or settle in new areas; some perhaps even returning to subsistance farming. But people would have made adjustments, and gone back to work. If some industries had floundered, others would have started up. The demand for goods and products is always there; the problem is to make the adjustments, to take one's best hold on what opportunities there are, or to make your own opportunities if there are none. That may take a coupld of years of real privation--I am not disputing that. But it should not take 12 years.
The problem is that both Hoover & FDR tried the gimmick approach--with Roosevelt adding the devaluation, and stealing a lot of money, by forcing repudiation of hard money guarantees. This took predictability out of the market--and without predictability, people cannot make the decisions based upon an assumption of the risks of enterprise. (It was as though the Bastard--now, I know it was not so much his idea as that of the loathesome Socialists who came to Washington to take jobs in the New Deal--but he was the one responsible;--set out to undo the wise policies of the Founding Fathers, in the Constitution, which set about maximizing the predictablility factors, in many provisions.)
But enough. You simply do not understand the economic dynamic. It is not propaganda as you suggest--albeit it may be a dismal science.
William Flax Return Of The Gods Web Site
Smoot-Hawley was a factor in the stock market crash of '29 but the market had regained it's pre-crash levels by the summer of '31. That's when the banks started to fail due to the massive crop failures of '30, and by '33 when the Fed began it's monetary contraction the banks that were left couldn't stand the strain and folded.
I wasn't there and I haven't done any particular study of this time, but these are the accounts of those that lived through it.
Be well...
That is because many Jews gave up their religion and became communists in the Soviet Union. Stalin was an equal opportunity commie.
Americans as a whole were 80% against another war with Germany right up until Pearl Harbor
I believe this is correct...and I believe conservative Republican isolationists were the leading exponents of this view.
But FDR was able to push Japan into attacking us; Pearl Harbor represented the success of FDR foreign policy
This is correct in essence, I believe
FDR's leaking of his plan to raise a huge army to fight Germany and Japan...is what induced Hitler to declare war on the US
Possibly. I've always seen Hitler's declaration of war against us treated as a thoughtless, spur-of-the-moment support of an ally.
Of course when FDR's foreign policy succeeded, 400 merchantmen were promptly sunk off the US coast, and scores of thousands of G.I.s were killed or captured by the Japanese offensive in the Philipines and elsewhere in the Pacific--but hey, what is that compared to the need to save the Soviet Union from being crushed by Germany? If you're a Commie symp, nothing at all, is what.
Please. Your comments to this point have been sane and reasonable. We didn't want the Germans to crush the British or the Russians. We didn't want the Japanese to crush the Chinese. Simple power politics - regardless of what you think of the various regimes. It's a continuation of British continental policy...which itself is probably basid on Roman principles.
Thanks. I stand corrected.
Probably as far as YOU want to go with the knowledge that to succeed at Ford's, you must be a Mason--common knowledge in Detroit since the 1940's.
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