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.
"Nobody... knows how to end them once they begin..."
Well, you socialist's claim you do.
"He was a fresh face trying new things. Sometimes that's the best humanity can expect."
Do you realize what an empty, pitiful, comment that is in light of the 100 million lives that the presidency of Franklin D. Roosevelt was directly and indirectly responsible for, from the Depression until the fall of the Berlin Wall.
Is that all you have to say? "He was a fresh face"!
That's what my father thought. My Dad was orphaned at three in 1913, so he went through a lot of this nations history until the 60's. He said he voted for FDR twice, but began to see that Franklin was on his way to being America's first dictator. My beloved "Ol' Man", became a Republican in '42 and passed on a Republican in '65. Not long after he voted for Barry Goldwater.
You're late. Wilson did it first. FDR was his student.
All those public works projects built real things and gave real people real work but...yes that's all I have to say.
You don't even have that.
Today's 4-5% unemployed include high numbers of willingly unemployed and pure loosers. We have no idea what 15-17 % unemployment feels like.
There has been no coup. Just lot's and lot's more folks arriving everywhere. The world's most powerful country could wipe out billions of people if the leader could convince them it was worth it.
Freedom is something that humans have never had, like most of the US is in possession of now.
Ah...I missed this first time around. Yes we socialists claim we know everything and you conservatives know nothing.
Of course, it's true. Even fools know that.
Umm. I guess you're right there. So was Hitler.
Sometimes that's the best humanity can expect.
Alas.
Thanks. The inclusion of the Rockefellers into the world socialism crowed is well earned by these evil people. The best metaphor I have ever seen regarding the 1964 election is the portrayal of the Scottish/English, Battle of Fallkirk, in "Braveheart". Just as Wallace was left to defeat on the field by the Scottish "Nobles" (?), so was Goldwater left to defeat by Nelson Rockefeller in the election of '64. I wasn't old enough to vote then, but I knew it was a tragedy.
failed to get the country going again andCompare with a real president and it doesn't look so hot. Ronald Reagan
failed to prevent WWII.
got the country going again
whipped inflation
ended the energy crisis and
transcended Communism.
I was just talking to my 80 year old aunt (born 1923) this week. My husband made some disparaging remark about FDR, and she leaped to his defense, saying that "there's a lot of us that would've starved without him". I told her that many people now believe that he actually made the depression last longer, but she believes it would have been a lot worse without him. After all, he started social security so old people wouldn't have to starve...
I've never seen any evidence that Stalin thought this of Roosevelt. Could you cite your sources?
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