Posted on 01/14/2009 2:34:57 PM PST by Zakeet
‘FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression’ by Jim Powell
Franklin D. Roosevelt’s New Deal economic policies of the 1930’s and 1940’s did much more harm than good. His excruciatingly high personal and business taxes, anti-competitive business regulations, price supports, restrictive domestic and international trade policies did the economy, already in the midst of a depression, even more detriment.
Herbert Hoover did increase taxes and signed into law the infamous Smoot-Hawley international tariff bill of 1930; however, FDR did not represent change from Hoover’s mistakes. He followed the same policies as Hoover, and did so more severely. In addition, FDR’s economic advisors were pompous neosocialists, who thought only they knew what was good for the economy, even though the vast majority of them were never themselves businessmen. Here are some reviews of the book:
“Admirers of FDR credit his New Deal with restoring the American economy after the disastrous contraction of 1929—33. Truth to tell–as Powell demonstrates without a shadow of a doubt–the New Deal hampered recovery from the contraction, prolonged and added to unemployment, and set the stage for ever more intrusive and costly government. Powell’s analysis is thoroughly documented, relying on an impressive variety of popular and academic literature both contemporary and historical.” – Milton Friedman, Nobel Laureate, Hoover Institution.
“There is a critical and often forgotten difference between disaster and tragedy. Disasters happen to us all, no matter what we do. Tragedies are brought upon ourselves by hubris. The Depression of the 1930s would have been a brief disaster if it hadn’t been for the national tragedy of the New Deal. Jim Powell has proven this.” – P.J. O’Rourke, author of Parliament of Whores and Eat the Rich.
“The material laid out in this book desperately needs to be available to a much wider audience than the ranks of professional economists and economic historians, if policy confusion similar to the New Deal is to be avoided in the future.” – James M. Buchanan, Nobel Laureate, George Mason University.
“I found Jim Powell’s book fascinating. I think he has written an important story, one that definitely needs telling.” – Thomas Fleming, author of The New Dealers’ War.
“Jim Powell is one tough-minded historian, willing to let the chips fall where they may. That’s a rare quality these days, hence more valuable than ever. He lets the history do the talking.” - David Landes, Professor of History Emeritus, Harvard University.
“Jim Powell draws together voluminous economic research on the effects of all of Roosevelt’s major policies. Along the way, Powell gives fascinating thumbnail sketches of the major players. The result is a devastating indictment, compellingly told. Those who think that government intervention helped get the U.S. economy out of the depression should read this book.” – David R. Henderson, editor of The Fortune Encyclopedia of Economics and author of The Joy of Freedom.
A description:
The Great Depression and the New Deal: For generations, the collective American consciousness has believed that the former ruined the country and the latter saved it. Endless praise has been heaped upon President Franklin Delano Roosevelt for masterfully reining in the Depression’s destructive effects and propping up the country on his New Deal platform. In fact, FDR has achieved mythical status in American history and is considered to be, along with Washington, Jefferson, and Lincoln, one of the greatest presidents of all time. But would the Great Depression have been so catastrophic had the New Deal never been implemented?
In FDR’s Folly, historian Jim Powell argues that it was in fact the New Deal itself, with its shortsighted programs, that deepened the Great Depression, swelled the federal government, and prevented the country from turning around quickly. You’ll discover in alarming detail how FDR’s federal programs hurt America more than helped it, with effects we still feel today, including:
• How Social Security actually increased unemployment
• How higher taxes undermined good businesses
• How new labor laws threw people out of work
• And much more
This groundbreaking book pulls back the shroud of awe and the cloak of time enveloping FDR to prove convincingly how flawed his economic policies actually were, despite his good intentions and the astounding intellect of his circle of advisers. In today’s turbulent domestic and global environment, eerily similar to that of the 1930s, it’s more important than ever before to uncover and understand the truth of our history, lest we be doomed to repeat it.
***END OF EXCERPT***
FDR’s policies prolonged Depression by 7 years, UCLA economists calculate
By Meg Sullivan| 8/10/2004 12:23:12 PM
Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.
After scrutinizing Roosevelt’s record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.
“Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump,” said Ohanian, vice chair of UCLA’s Department of Economics. “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”
In an article in the August issue of the Journal of Political Economy, Ohanian and Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law June 16, 1933.
“President Roosevelt believed that excessive competition was responsible for the Depression by reducing prices and wages, and by extension reducing employment and demand for goods and services,” said Cole, also a UCLA professor of economics. “So he came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies.”
Using data collected in 1929 by the Conference Board and the Bureau of Labor Statistics, Cole and Ohanian were able to establish average wages and prices across a range of industries just prior to the Depression. By adjusting for annual increases in productivity, they were able to use the 1929 benchmark to figure out what prices and wages would have been during every year of the Depression had Roosevelt’s policies not gone into effect. They then compared those figures with actual prices and wages as reflected in the Conference Board data.
In the three years following the implementation of Roosevelt’s policies, wages in 11 key industries averaged 25 percent higher than they otherwise would have done, the economists calculate. But unemployment was also 25 percent higher than it should have been, given gains in productivity.
Meanwhile, prices across 19 industries averaged 23 percent above where they should have been, given the state of the economy. With goods and services that much harder for consumers to afford, demand stalled and the gross national product floundered at 27 percent below where it otherwise might have been.
“High wages and high prices in an economic slump run contrary to everything we know about market forces in economic downturns,” Ohanian said. “As we’ve seen in the past several years, salaries and prices fall when unemployment is high. By artificially inflating both, the New Deal policies short-circuited the market’s self-correcting forces.”
The policies were contained in the National Industrial Recovery Act (NIRA), which exempted industries from antitrust prosecution if they agreed to enter into collective bargaining agreements that significantly raised wages. Because protection from antitrust prosecution all but ensured higher prices for goods and services, a wide range of industries took the bait, Cole and Ohanian found. By 1934 more than 500 industries, which accounted for nearly 80 percent of private, non-agricultural employment, had entered into the collective bargaining agreements called for under NIRA.
Cole and Ohanian calculate that NIRA and its aftermath account for 60 percent of the weak recovery. Without the policies, they contend that the Depression would have ended in 1936 instead of the year when they believe the slump actually ended: 1943.
Roosevelt’s role in lifting the nation out of the Great Depression has been so revered that Time magazine readers cited it in 1999 when naming him the 20th century’s second-most influential figure.
“This is exciting and valuable research,” said Robert E. Lucas Jr., the 1995 Nobel Laureate in economics, and the John Dewey Distinguished Service Professor of Economics at the University of Chicago. “The prevention and cure of depressions is a central mission of macroeconomics, and if we can’t understand what happened in the 1930s, how can we be sure it won’t happen again?”
NIRA’s role in prolonging the Depression has not been more closely scrutinized because the Supreme Court declared the act unconstitutional within two years of its passage.
“Historians have assumed that the policies didn’t have an impact because they were too short-lived, but the proof is in the pudding,” Ohanian said. “We show that they really did artificially inflate wages and prices.”
Even after being deemed unconstitutional, Roosevelt’s anti-competition policies persisted - albeit under a different guise, the scholars found. Ohanian and Cole painstakingly documented the extent to which the Roosevelt administration looked the other way as industries once protected by NIRA continued to engage in price-fixing practices for four more years.
The number of antitrust cases brought by the Department of Justice fell from an average of 12.5 cases per year during the 1920s to an average of 6.5 cases per year from 1935 to 1938, the scholars found. Collusion had become so widespread that one Department of Interior official complained of receiving identical bids from a protected industry (steel) on 257 different occasions between mid-1935 and mid-1936. The bids were not only identical but also 50 percent higher than foreign steel prices. Without competition, wholesale prices remained inflated, averaging 14 percent higher than they would have been without the troublesome practices, the UCLA economists calculate.
NIRA’s labor provisions, meanwhile, were strengthened in the National Relations Act, signed into law in 1935. As union membership doubled, so did labor’s bargaining power, rising from 14 million strike days in 1936 to about 28 million in 1937. By 1939 wages in protected industries remained 24 percent to 33 percent above where they should have been, based on 1929 figures, Cole and Ohanian calculate. Unemployment persisted. By 1939 the U.S. unemployment rate was 17.2 percent, down somewhat from its 1933 peak of 24.9 percent but still remarkably high. By comparison, in May 2003, the unemployment rate of 6.1 percent was the highest in nine years.
Recovery came only after the Department of Justice dramatically stepped enforcement of antitrust cases nearly four-fold and organized labor suffered a string of setbacks, the economists found.
“The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes,” Cole said. “Ironically, our work shows that the recovery would have been very rapid had the government not intervened.”
-UCLA-
LSMS368
**** END OF TRANSCRIPT***
You may be right. Everybody gets drafted male, female, transexual etc.
We will also get a crock pot full of people who have no morals. The hetrosexual men and women will be forced out. There will have to be a draft to replace them. The standards will also have to be lowered. Besides, the deviates will require fresh meat.
the troll has gone now but notice that the troll along with some others are waiting in the shadows and the they surface
good answer back by the way
think it’s spelled the queensbury rules.
you know where one stands there with his fists up., well that is our party
meanwhile the other guy will kick you ,headbutt you, rip you apart with no rules, that is the Dems
it is time to take the gloves off and beat them instead of this well they might like us if we go along with them crap
agree with all of that and thanks for the service
pandora’s damned box
“The magnitude of the irrational homophobia on this thread floors me”
You been brainwashed... homophobia is a leftist term and you are using it... There is NOTHING irrational about one wishing to avoid those that party like its 1999 with fecal matter in anal zones...
Capiche?
she states she is a lesbian on this thread
she’s a troll who states she is a lesbian, obviously she has an agenda on here
And we have only seen the camel’s snotty nose in the tent.
LOL the father from American Beauty?? You do know that was a movie, right? I actually see what your problem is, you base your facts on what you see in the movies. Try not to do that. Movies are not reality.
The dioversity is in the perversity..
Yes, over the past 30 years, the Left has soiled K-12, higher academia, media, popular culture, judiciary, religious institutions, science.
Their claws are in the military; it is only a matter of time before they ruin it as well.
We do have evolving societal standards, like it or not. I don’t like some of them and I’m thrilled by some of them. I don’t want a return to the past. I also don’t want this PC stuff that is seriously shoved down our throats.
I don’t want legislation on morality. But we’re having it now, aren’t we? We, as a society, are being forced through laws, to accept homosexuality (and abortion and other things)as normal. And through our PC crap, hate speech for pointing out factual information, etc. If homo activists weren’t promoting this stuff, I honestly don’t see where it would be such a problem since as a society, we tend to ignore or stay out of other peoples’ private business. We can relate or compare this to Prohibition, in that it was eventually repealed thank heavens. But now we have many of these nanny state laws protecting us from ourselves or whatever. And, on the flip side, we have the same people telling us that homosexual sex is not any of our business. Abortion/murdering one’s baby, is a choice, a woman’s right to choose/her body, etc.
For example, smoking cigarettes or eating a high fat diet needs to be legislated but the health risks to those who engage in homosexual sex is just fine, regardless of the health risks?
We’re on a very slippery slope, imo, and if we’re going to legislate behavior, maybe we should stop being PC about the current sexual behavior of those in the high risk areas.
I wouldn’t attempt to say anyone is going to hell as it’s not my call or decision. I have no clue about anyone else’s eternal damnation.
I wouldn’t dream of standing in the way or judging those who are in our Military. I’m more than aware of the blood shed and lives given by those in our Military.
Back to homos being allowed to be open in their chosen sexuality while serving in the military...there will be lawsuits (just like in every other institution), there will be problems. To pretend otherwise is naive. We can sort of relate or compare it to females in the military but we have to point out that males/females don’t share living quarters, are basically segregrated in some respect or aspects.
“I’m sure my grandmother believed that image, she never went to a peaceful war protest or a rock concert, and the images that the nightly news used to shock people of her generation were effective in doing so.” (yay, finally worked with spastic mouse)
I never attended a peaceful war protest, but then again, I respect our military, our soldiers too much to ever do anything that would lower their morale. We have a voluntary military, and it drives the libs crazy. They’d love for the draft to be reinstated, lots more soldiers to trash the military since they wouldn’t have joined/enlisted in the first place, but that’s another topic. I’ve been to many rock concerts, my first was when I was 8 or 9. Pretty wild. One of my brothers took me. Been to many since then. Not a big deal. My teens have been to a few. Heck even my youngest has been to one, but that was the Jonas Brothers and doesn’t really count.
It’s going to be an interesting and bumpy ride. I hate to see our Military put through this crap. But it seems we can’t stop the activists or their supporters.
I agree with everything you said in this post.
There’s going to be a whole lot of PC nonsense because of this and our soldiers/military don’t need this on top of the other stuff they deal with daily.
There are some here, maybe many, who think this is a generational thing (that it’s only older people that have a problem with accepting homosexuality as normal) and that’s not the case. I’m in my 40s. My kids are in their late teens to pre-teens. They see it daily, in movies, tv (pop culture trying to make it appear normal) and they know it’s not normal. Heck, my kids even joke about which character is the homo in a movie or tv show and say it’s usually the nicest, most perfect character. Even the commercials, there’s one, a PSA, that states “that’s so gay” is cruel, or wrong, etc. So of course, the chorus from our house is “that’s so gay.”
Kids aren’t stupid. Especially teens. Next week is mid terms at our public high school. Mid terms start on Wednesday. Since Tuesday is the “historic” inaugeration(sp), they have an extended homeroom and shortened class times. And the day before midterms, when they should be reviewing for midterms, all teachers are supposed to spend their shortened class period discussing the innaugeration. Just about every one of my teens teachers, especially the science and math teachers, told their classes, they don’t want to force any views on them, but they have to discuss this historic innaugeration. My senior’s AP Chem teacher told them today, ok we have 5 minutes to discuss this because on Tuesday, we’ll be reviewing for the midterm in our shortened period. My junior’s honors chem teacher told them they’ll spend a few minutes discussing this historic innaugeration, and he emphasized he wasn’t trying to force any views on any of them, but the majority of the class time will be spent on mid term review. AP Calc and honors pre calc teachers told both of my kids classes, that they do math during class time and history or english class or one of their other classes will spend time on discussing the historic innaugeration. My junior’s music tech class (an elective) decided to have their midterm on Tuesday since it will be an “easy” day and free up their scheduled mid term later in the week so they can study for their non-elective class midterms. My senior’s music appreciation class (another elective) teacher told the class today if anyone wants to discuss the innaugeration, he’ll discuss it, but if anyone wants extra help with music, that’s good to go, too.
My 5th and 7th graders in Catholic grade school also said they’ll be watching the “historic” innaugeration. 5th grader is ticked because it happens during math class and she’d rather do math. 7th grader said it happens during social studies and anything is better than taking the enormous amount of notes her history teacher gives. 4 years ago, neither of these schools watched the innaugeration. And 7 years ago, they didn’t turn the tvs on in every class to watch our country being attacked. And THAT was historic and an important lesson to teach.
I really have to check how to spell inaugeration, lol.
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