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.
Obviously I am and you are not. I have a set of principles adopted from the founding fathers which I weigh all policies past and present by. We have gone down a wrong path. Is it a sin to say so? Are we in the back seat supposed to say nothing when we observe the driver steering straight for a cliff? You really need to contemplate that one. Unless you're wedded to a "down with the ship mentality". Some of us would save the ship. It seems some others would let it sink rather than be "critical."
No, of course not. Like I said above, go ahead, tear down all this country's icons! Trash our traditions!!
It's a free country!! ;-)
Well, if you're going to claim credit for the good, but disavow the bad....
Yes, but in The New Dealers' War Thomas Flemming indicates that the German High Command counted the cost of war with the US--it meant going over to the strategic defensive, and that is what they decided to do. They (Hitler) didn't follow through on that decision, tho . . .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.
I only read The New Dealers' War because I caught the Booknotes segment on it on C-Span. Brian Lamb opened the interview by asking Flemming if he had voted for FDR; Flemming replied that he was too young to vote in 1944. Brian asked if he would vote for FDR if he had the chance; he replied "It would depend." Flemming said that he had voted for Truman; Brian asked if he'd vote for Truman again and he said "Yes."Having read the book I found those answers stunning. FDR was death warmed over and restricted to a 20-hour workweek during much of WWII. Flemming asserts, and adduces reason to believe, that FDR's main objective was to not only prevent the conquest of the USSR but to put Stalin in the driver's seat in postwar Europe.
FDR's "unconditional surrender" demand on Germany was popular from the POV of Americans who didn't want to think of ending with another armistace which would allow yet a third German war to start in Europe. But it did two things: it buttressed Hitler's then-shaky pollitical position, and it married the US to the USSR because we had no intention of grinding up the entire Wehrmacht ourselves without "der Ostfront."
And the Lend-Lease program wasn't intended only to keep the USSR on life-support, it was intended to make the USSR strong. It is difficult now to credit just how influential the USSR was within the FDR administration. But the data are there from the Venona transcripts--which, BTW, were decrypted against Truman's orders by a general who didn't want the country to be surprised by another Soviet flip like the one that allied them with Hitler to start the invasion of Poland.
how Truth that is
As for me it proves that men were never perfect but at least it got repealed in the next administration which was a sign of healthiness. Oh my God - what a terrible thought - people back then was critical too! You're right, we're better off today living with unconstitutional assaults on our liberties rather than criticize people like FDR and the Democrats - and the GOP which signed on with them.
Now, tell me how you feel about President Taft. ;-)
WOW! That's heady stuff.
I do understand that. Personally, I'm very grateful that I live in the 'information age', where I have access to enough information to make reasonable decisions. Nonetheless, they were sold a bill of goods by the first 'media savvy' president, and there is a growing amount of evidence that the actions FDR took were bad, not good, for feeding people and getting them back to work. He had too many socialist ideas in his head, and the opportunity to try them out. As usual, socialism failed. Today we can look back and clearly see that. Back then, the fact that no one knew how deeply involved government was in the banking industry, or the obvious consequences of the kind of choices FDR made makes it reasonable that the people accepted it then. I have a harder time with them not being able to look back and say maybe those choices weren't so good. I do understand why people then couldn't necessarily see it - they lacked hard information. Today, we have access to almost all the info we need, and there are STILL people siding with socialism!
God Bless Your Grandma.
Since Libertarianism, by definition, is atheist--and since all the Founders were Theists (of one stripe or the other,) it is IMPOSSIBLE that Libertarianism was looked upon with favor by the Founders, or their children.
Yes, he did all that and they had to install a special bathtub in the White House so that he could fit in it.
He was also the conservative Republican who got us the Sixteenth Amendment. ;-)
Your point is... what?
Of course there was a coup. FDR stacked the SCOTUS and did things that were previously completely out of bounds for the FedGov to touch.
The best thing we could do for this nation is to roll back that coup and stuff the FedGov back into a pre-New Deal size box.
Imagine a country with almost no armed federal agents. Imagine a country with almost no federal prisoners. Imagine a country where the states really shielded citizens from federal power. THAT would be a FREE country.
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