Filed under: Bureaucracy, Capitalism, Democrat Corruption, Domestic Policy, Economics, Economy, History, Regulation, The United States, Unemployment | Tags: Constant Experimentation, Franklin Delano Roosevelt, The Great Depression
Obama likes to compare his recession to Franklin Roosevelt’s GREAT Depression under the mistaken belief that the GREAT Depression was long because it was a particularly bad one, and the reason that Obama’ recession has gone on so long is simply because it was an unusually bad one— which is all a bunch of hooey.
FDR’s Great Depression was bad because FDR had no real idea how to deal with it and attacked it with the idea of constant experimentation with ways to end it. There was the NRA, the WPA, the RFC, the CCC, and the OPA to mention just a few. Two UCLA economists announced back in 2004 that they had figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect thought by all good Progressives to be beyond reproach— Franklin D Roosevelt himself. The Wall Street Journal reminds us in a “Notable and Quotable” column:
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.” . . .
“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.”
What? Non-intervention as policy? Works pretty well. Economies like to recover. Freedom and prosperity go together. Consult Calvin Coolidge.
Filed under: Democrat Corruption, Economy, History, Politics, Progressivism, The United States | Tags: Conventional Wisdom?, Franklin Delano Roosevelt, The Great Depression
While following a link to an article that turned out not to be of any interest, I ran across an article entitled “When Big Government Saved America.” I do try to keep up with the wandering of leftist minds, but this noxious notion made me curious.
The recent bridge collapse along I-5 north of Seattle was in some ways a freak accident, yet to many Americans it seemed emblematic of a public sector in crisis. As gridlock and dysfunction reign, the U.S. government seems to lack the capacity to adopt even the most popular and necessary measures—even to maintain the physical structures upon which American life depends. In the meantime, this crisis of the public sector is mirrored by—and fed by—Americans’ lack of faith in public institutions.
The recent bridge collapse along I-5 north of Seattle was in some ways a freak accident? No it was a freak accident. a Tractor-trailer with a too-wide load hit a major support on one section of the bridge, and it collapsed. I knew they were trying to make a big deal of it. It was not “emblematic of a public sector in crisis,” and the physical structures “upon which American life depends,” which had been surveyed in the previous 6 months, was replaced in two weeks with a temporary span.
Eighty years ago this month as Franklin D. Roosevelt’s first “hundred days” wound to a close amid the Great Depression, the United States was in far worse shape than it is today. And yet, then, the American government responded to economic catastrophe not by treating public services as extravagancies to be traded off in the name of “belt tightening,” but rather by expanding them dramatically. They not only built what by some measures was the most generous social spending regime in the world, but also a political culture in which public institutions were trusted and esteemed far more than they are today.
There was certainly generous spending. Roosevelt set right off in 1933 with the National Industrial Recovery Act (the NRA), the most revolutionary act ever. It allowed American industrialists to collaborate to set the prices of their products, the wages and hours that went into making them. Antitrust laws were suspended. Leaders of industries were invited to sit down together and write “codes of fair competition” that would be binding on everyone in their industry, and subject to a fine or jail term if he violated the code. So what you had was a conspiracy against the public, and that went well.
FDR never had to work, and always had an allowance from his mother. Everyone who knew him agreed that he had no business sense and no financial sense. He failed in every business venture he undertook, and did not learn from his mistakes. But he was charming. FDR was quite sure that price-fixing was a good idea, and that competition was a bad thing. As Henry Morgenthau, the Secretary of the Treasury, and one of the architects of the New Deal said:
We have tried spending money. We are spending more than we have ever spent before and it does not work. …We have never made good on our promises. I say after eight years of this administration we have just as much unemployment as when we started…and an enormous debt to boot.
Mason Williams, the author of this piece, and of a new book about New York City, FDR and La Guardia is apparently a newly-minted PhD in History, who will begin his first teaching job in the fall. He is a victim of conventional leftist wisdom that FDR saved America from the Great Depression. He didn’t. FDR’s vast experimentation made things worse, and the depression far longer than it needed to be. Nor did World War II end the depression. The assumption was that all the war work at home, building military equipment that put people back to work ended the downturn. But during the war wages and prices were fixed, goods were rationed, and the war materials the factories turned out were consumed in the course of the war. It took quite a few years after the war for America to recover, as UCLA economist Lee Ohanian and Harold Cole have shown. Price-fixing never, never works.
There was a scene in Anton Myrer’s great novel of World War II, Once an Eagle, of the day Roosevelt died. When they heard the news on the radio, the woman said” The President was carrying everything on his hands. Everything. Now the fat will be in the fire, along with everything else He was so brave,” she murmured.
“FDR? Baloney” said her government insider companion, “He was a power-drunk egocentric and the prince of political manipulators. But he could make them go the way he wanted.”
That was just a novel. The myth of Roosevelt’s deft handling of two of our worst crises — the Great Depression and World War II — has endured, and encouraged the left to always try to emulate his failed policies— to our great misfortune. That was eighty years ago, and some learn from history, while others never examine their presumptions and prejudices.
Filed under: Capitalism, Democrat Corruption, Economy, Election 2012, Freedom | Tags: Franklin Delano Roosevelt, The Great Depression, The Welfare State
Professor Burton J. Folsom Jr. is author of two books on Franklin Delano Roosevelt: New Deal or Raw Deal and with Anita Folsom: FDR Goes to War. Here is a speech he delivered at Hillsdale College on FDR’s energetic experimentation that did so much damage to the economy in the 1930s. The great myth has always been that FDR saved us from the Great Depression, and then it was ended by World War II. Wrong.
I have recommended Amity Schlaes The Forgotten Man. It is a new history of the Great Depression, and a wonderful book, with a fascinating cast of very real characters, that reads like a novel.
President Obama constantly compares his problems to the Great Depression. To indicate how big the recession he “inherited from George W. Bush” is (not his fault) but he flatters himself. The comparison lies not in the extent of the Depression [ July 1927: Unemployment 3.3%; Sept 1931; Unemployment 17.4%; Nov. 1933: Unemployment 23.2%; Nov. 1934: Unemployment 23.2%; July 1935: Unemployment 21.3%; Jan. 1938: Unemployment 17.4%; Jan. 1940: Unemployment 14.6%] but in the misguided efforts to make big government heal the economy.
FDR’s plan to make people dependent on government was a clear effort to garner votes for the Democrat party [see approximately minute 35.00 on the video]. Obama is making the same effort to make people dependent on Big Government in his campaign for a second term. I think most of us would prefer to see a recovering economy and recovering employment. The video is very worth your time. A lack of understanding of history may doom us to repeat it.
Filed under: Economy, Environment, Liberalism, News of the Weird | Tags: Deep Thoughts at NASA, Scaring the Public, The Great Depression
Harvard economist Kenneth Rogoff and Nobel Laureate and liberal hack Paul Krugman attempted to explain recently why Keynesian economics is just the thing to revive a depressed economy. Krugman suggested that a threat of an invasion by space aliens could spur economic activity, then when the economy got going they could say they made a mistake. His comment was meant to point out in humorous fashion that World War II, under the Roosevelt administration, succeeded in ending the Great Depression. So, you see we just need to spend a bunch more money.
Except World War II didn’t end the Great Depression. It did put people back to work. The military swept up a big chunk of young and able men, and factories of all kinds turned to producing military goods, not just for us, but for our allies as well. Factories and shipyards were running 24/7 and people swarmed to the centers where war work was going full blast.
But there were wage and price controls. There was rationing. There were no new cars, and no gas nor tires to make them run. There were no new appliances. Meat, sugar, butter were all rationed. There wasn’t anything much to spend money on, and constant war bond drives helped those who were working to build their savings. When the war was over, and civilian production returned, there was a great outpouring of demand. People needed cars, appliances, everything they had gone without for five years and more. Returning vets needed houses, new babies needed everything that new babies need. That’s when the nation really began to recover, and it had nothing to do with John Maynard Keynes.
But as the Guardian reports, never let a good idea go to waste. Scientists at NASA’s Planetary Science Division and Pennsylvania State University suggest that space aliens might destroy humanity to protect other civilizations. If we don’t reduce our greenhouse gases, it might tip off alien civilizations what a danger we are to the universe. They might just have to step in to take drastic action to keep us from becoming a more serious threat.
The highly speculative scenario is one that researchers compiled to help humanity prepare for actual contact. In their report “Would contact with extraterrestrials benefit or harm humanity? A scenario analysis” they consider three broad categories: beneficial, neutral or harmful. [I hope that with our economy in the tank we’re not giving grants for space alien investigation.]
“Green” aliens might object to the environmental damage humans have caused on Earth and wipe us out to save the planet. “These scenarios give us reason to limit our growth and reduce our impact on global ecosystems. It would be particularly important for us to limit our emissions of greenhouse gases, since atmospheric composition can be observed from other planets,” the authors write.
Even if we never make contact with extraterrestrials, the report argues that considering the potential scenarios may help to plot the future path of human civilisation, avoid collapse and achieve long-term survival.
Are they suggesting that our carbon dioxide emissions are harming the universe? Affecting life in other galaxies? For space alien aficionados the Guardian article is here. The picture is from Mars Attacks.
Some days it seems like we do live in an alternate universe. The stock market tanks, the unemployment rate climbs, and the president heads off for a luxury vacation in the playground of “the rich” that he demonizes when he’s not vacationing among them. Strange, strange, strange.
Filed under: Capitalism, Economy, Foreign Policy, History, Politics | Tags: Doing It All Again, The Great Depression, The Smoot-Hawley Tariff
Politicians are largely there because they have a talent of some sort for politicking, that is, for meeting and greeting and seeming nice to their constituents. And once we have voted, we yawn, hope they do the right thing, and go back to our own affairs. We, all too often, don’t look hard at their qualifications. Sometimes we get lucky and elect someone who has business experience or is knowledgeable about economics or who really understands taxation or medicine or foreign affairs, or even history. Over the years we have ended up with a surprising number of congressmen who have never done anything except get elected to office.
IN the 1930s, earnest congressmen thought they could solve America’s Great Depression by punishing foreigners with a protectionist measure called the Smoot–Hawley Tariff Act of 1930. They were tragically wrong.
Fast forward to 2010, and the House Ways and Means Committee has drummed up a new bill. They think that we’re losing jobs due to the overall trade deficit, that the overall trade deficit is driven by our trade deficit with China, and that our trade deficit with China is driven up by the exchange rate. Each part of their analysis is false.
The U.S. trade deficit was at its highest in 2006, and unemployment was 4.6 percent. In 2009, the deficit was only half as large, but unemployment had doubled. The connection is not what congressmen seem to think. The American economy runs on consumption. Consumer spending creates jobs and increases imports, and the trade deficit as well.
The bill in its present form would give the Department of Commerce discretion to be selective, or move closer to mandatory, across-the-board tariffs. Wrong plan. Won’t create jobs. Congress will do almost anything to avoid recognizing that the problem is their spending.
And please, study up, and learn from history.
Filed under: Cool Site of the Day, Economy, History | Tags: A Visual History, The Great Depression, The Thirties
The Denver Post has published a group of color pictures from the Library of Congress, from the era of the Great Depression. The Thirties were a hard time in the country, but we don’t often get to see it in color. Just ordinary people, and ordinary places. It’s a fascinating look at a bit of visual history.
(h/t: National Review)