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Great Myths About the Great Depression Still Abound
Capitol Confidential ^ | 8/21/2011 | Tom Gantert

Posted on 08/22/2011 12:24:02 PM PDT by MichCapCon

“FDR fixed the economy with make-work jobs,” a recent Mlive.com headline stated.

Jennie Phipps, an Mlive.com contributor, wrote in her Aug. 15 story: “When I was growing up, my mother thought Franklin Delano Roosevelt sat at the right hand of God, mostly because he found a way out of the Great Depression by putting people to work through such government programs as the Civilian Conservation Corp. and the Works Projects Administration.” (Editor's Note: The actual names of the programs were the Civilian Conservation Corps and the Works Progress Administration.)

But some economic historians believe Phipps has bought into one of the biggest myths of American politics – that FDR’s New Deal actually worked.

Franklin D. Roosevelt started his 12-year run as president in 1933, four years after the stock market crash of 1929. Historians agree the New Deal and the Second New Deal were a series of government-backed economic programs that were launched from 1933 through 1936.

From 1932 through 1939, the country’s unemployment rate ranged from 23.6 percent (1932) to 20.7 percent (mid-1939).

“The New Deal was a gigantic failure in revitalizing the U.S. economy,” said Burt Folsom, a professor of history at Hillsdale College and senior fellow in economic education with the Mackinac Center.

Lawrence Reed, president emeritus of the Mackinac Center for Public Policy, chronicled the harmful impacts of FDR’s New Deal in “Great Myths of the Great Depression.”

The Great Depression was four consecutive downturns rolled into one, according to Reed, who says that the country had had several other depressions, but none lasted more than four years and most were over in two years.

“The calamity that began in 1929 lasted at least three times longer than any of the country’s previous depressions because the government compounded its initial errors with a series of additional and harmful interventions,” Reed wrote.

Reed examined the damage on the American economy via government policies by looking at the Smoot-Hawley Tariff, passed in June 1930 under the Herbert Hoover administration. The stock market dropped 20 points on the day Hoover signed Smoot-Hawley into law and continued dropping the next two years, Reed wrote.

“The most protectionist legislation in U.S. history, Smoot-Hawley virtually closed the borders to foreign goods and ignited a vicious international trade war,” Reed wrote.

There were 887 tariffs that were sharply increased and significantly raised the rates on agricultural products and other consumables. Officials in the administration and Congress thought raising trade barriers would make Americans buy more American products and help employ more people, Reed wrote.

But foreign governments soon put up their own trade barriers and pulled back on buying U.S. goods. American agriculture suffered as farm prices plummeted and tens of thousands of farmers went bankrupt, Reed wrote.

A bushel of wheat that sold for $1 in 1929 was selling for 30 cents just three years later.

Reed wrote that with the collapse of agriculture, rural banks closed. Some 9,000 banks closed between 1930 and 1933.

And Phipps appears to have forgotten about President Barack Obama’s attempt to create jobs through government money.

The American Recovery and Reinvestment Act was signed into law in February 2009 when the nation’s unemployment rate was 8.2 percent. Over the next 29 months, the nation’s unemployment rate has ranged between 8.6 percent and 10.1 percent. In July of 2011, it was 9.1 percent.

Tad DeHaven, a federal budget analyst for the Cato Institute, said the Congressional Budget Office has the ARRA costing $821 billion.

“Spending accounts for about 65 percent and tax cuts 35 percent," DeHaven said. "Among the tax provisions of the bill were a $400 per person 'Making Work Pay' tax credit, a patch of the Alternative Minimum Tax, numerous temporary breaks for businesses, an expansion of several tax credits, and a number of provisions to reduce taxation on public bonds. These weren’t 'pro-growth' tax cuts that effect long-term decision making. These were short-term Keynesian styled tax cuts."

"As for make work programs, there’s no free lunch," DeHaven continued. "Every dollar the federal government spends paying somebody to do something is one less dollar for the private sector. The fundamental question therefore is: Which do we want allocating economic resources, politicians and bureaucrats or the marketplace? Those who would answer affirmative to the former ought to read up on the defunct Soviet Union.”


TOPICS: Government; History
KEYWORDS: fdr; greatdepression; liberalism

1 posted on 08/22/2011 12:24:08 PM PDT by MichCapCon
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To: MichCapCon

FDR was the originator of “Never let a good crisis go to waste”

TT


2 posted on 08/22/2011 12:26:23 PM PDT by TexasTransplant (Radical islam is real islam. Moderate islam is the trojan horse.)
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To: MichCapCon

The best deconstruction of the New Deal is Amity Shlaes’ book ( I can’t recall the title)...a really good read


3 posted on 08/22/2011 12:28:51 PM PDT by ken5050 (Should Christie RUN in 2012? NO!!! But he should WALK 3 miles every day.)
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To: MichCapCon

bump for later


4 posted on 08/22/2011 12:30:01 PM PDT by joe fonebone (Project Gunwalker, this will make watergate look like the warm up band......)
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To: MichCapCon

I have this bookmarked:

http://www.freerepublic.com/focus/chat/2285846/posts


5 posted on 08/22/2011 12:30:18 PM PDT by HereInTheHeartland (I love how the FR spellchecker doesn't recognize the word "Obama")
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To: MichCapCon

FDR’s socialist policies made a depression into a Great Depression. Just google “FDR made the Great Depression worse” and you will get a LOT of hits explaining it.


6 posted on 08/22/2011 12:46:55 PM PDT by Blood of Tyrants (Islam is the religion of Satan and Mohammed was his minion.)
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To: ken5050

Amity Shlaes’ the forgotten man is a great and balanced (non polemic) take down of the New Deal. She is not an FDR or New Deal “hater”, more a regretter. It would be wonderful if the government had a magic lever they could adjust to fix the economy. No such lever exists.

http://www.amazon.com/Forgotten-Man-History-Great-Depression/dp/0060936428/ref=ntt_at_ep_dpt_1


7 posted on 08/22/2011 12:59:23 PM PDT by Lonesome in Massachussets (Somewhere in Kenya a village is missing its idiot)
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To: MichCapCon

My mom was a very young girl during the depression and FDR’s presidency but the one thing that is burned into her memory is FDR stating that there would be a chicken for every ‘cookpot’ in America. For her to remember that shows (imo) how FDR set himself up as a ‘savior’ by his rhetoric. To this day she can hardly believe that he made things worse with his policies.


8 posted on 08/22/2011 1:01:06 PM PDT by Outlaw Woman (Palin/Perry 2012)
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To: Outlaw Woman

At his funeral, someone commented that for over 50% of Americans, he was the only president they had any real awareness of...


9 posted on 08/22/2011 1:03:59 PM PDT by ken5050 (Should Christie RUN in 2012? NO!!! But he should WALK 3 miles every day.)
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To: MichCapCon

FDR also threw American citizens in concentration camps. He was scum.


10 posted on 08/22/2011 1:05:56 PM PDT by FightThePower! (Fight the powers that be!)
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To: Outlaw Woman
"My mom was a very young girl during the depression and FDR’s presidency but the one thing that is burned into her memory is FDR stating that there would be a chicken for every ‘cookpot’ in America. For her to remember that shows (imo) how FDR set himself up as a ‘savior’ by his rhetoric. To this day she can hardly believe that he made things worse with his policies."

Then here's a learning opportunity for your mom. "a chicken in every pot" wasn't even FDR. It was Herbert Hoover.

11 posted on 08/22/2011 1:06:53 PM PDT by mlo
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To: ken5050

Wasn’t he into a fourth term when he died? This said he served 12 years. In any case, that’s a pretty stunning figure if true.

What kind of a wartime president was he? His record is barely touched on (not like his economic record). I’ve not done enough reading on him to know.


12 posted on 08/22/2011 1:09:50 PM PDT by Outlaw Woman (Palin/Perry 2012)
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To: Lonesome in Massachussets

Very good book. She’s got to be John Shlaes’ daughter, but I’ve never seen any reference at all to her father. He worked for Nixon in ‘68 & ‘72, under Len Garment & John Mitchell in New York.


13 posted on 08/22/2011 1:13:18 PM PDT by Mach9
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To: MichCapCon

Burt Folsom, go to AMAZON, and buy his books, excellent.


14 posted on 08/22/2011 1:14:08 PM PDT by Little Bill (Sorry)
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To: Lonesome in Massachussets; ken5050

Allow me to add my strong recommendation for Amity Shlaes’ book, The Forgotten Man. My parents both became teenagers during the Great Depression so I heard plenty of stories from them and my mom’s parents. Of course, every community experienced it differently in many ways but there were some common themes across the nation that Shlaes reports very well. A very good, fact-based book!


15 posted on 08/22/2011 1:14:08 PM PDT by T-Bird45 (It feels like the seventies, and it shouldn't.)
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To: FightThePower!

Yep, another thing his liberal worshippers have basically gotten tossed down the memory hole. What a disgrace.


16 posted on 08/22/2011 1:20:43 PM PDT by safeasthebanks ("The most rewarding part, was when he gave me my money!" - Dr. Nick)
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To: ken5050
It's called "The Forgotten Man" and it is worth everyones time to read it. F'ing Dope Roosevelt about destroyed this country with his harebrained scams and plots. People were going hungry in this country, real starvation and his solution was to burn crops, pour milk into rivers and kill and bury pigs so farm prices would rise. That didn't work.

FDR war far and away the worst president we ever had. Germany had Hitler, Italy had Mussolini, USSR had Stalin and we had FDR.

17 posted on 08/22/2011 1:27:20 PM PDT by muir_redwoods (Somewhere in Kenya, a village is missing an idiot)
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To: Outlaw Woman

That was Hoover that promised a car in every garage and a chicken in every pot.


18 posted on 08/22/2011 1:58:09 PM PDT by Melas (u)
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To: MichCapCon

Bkmk.


19 posted on 08/22/2011 1:58:22 PM PDT by Sergio (An object at rest cannot be stopped! - The Evil Midnight Bomber What Bombs at Midnight)
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To: Melas
That was Hoover that promised a car in every garage and a chicken in every pot.

Libertarians promise pot in every chicken.

20 posted on 08/22/2011 1:58:50 PM PDT by dfwgator
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To: MichCapCon

The first line of the post could have been written by my mother. I remember hearing when I was growing up how FDR was so great because he put my grandpa to work with the WPA. Of course, that was in 1941 or 1942, and my mother and my grandparents lived in abject poverty during most of FDRs term.


21 posted on 08/22/2011 2:13:38 PM PDT by murron (Proud Mom of a Marine Vet)
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To: MichCapCon

A question that keeps popping up in my mind is, how bad were the Republican candidates during the 1930s that they couldn’t defeat FDR in 1936 and 1940? How could a president that was presiding over a bad economy that only got worse under his tutilage get reelected not once, but twice? I can maybe understand a little how he got reelected in 1944 due to the War and the upturn of the economy because of it, but this man should have never been elected to 4 terms.

It doesn’t sound as if a lot has changed since then as far as the ineptitude of the Republicans.


22 posted on 08/22/2011 2:20:09 PM PDT by murron (Proud Mom of a Marine Vet)
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To: Outlaw Woman

As a wartime president, it’s hard to find fault with FDR. The Manhatten project for example was FDR’s baby. It started with correspondence between him and Albert Einstein. Most importantly, FDR was the exact opposite of LBJ. LBJ tried to micromanage the war and involved himself in every facet. FDR let generals run the war.


23 posted on 08/22/2011 2:20:43 PM PDT by Melas (u)
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To: murron

You have to keep in mind that the Democratic party in the 30’s and 40’s is not the same Democratic party as today. Likewise, the Republican party of the 30’s and 40’s is not the same party that exists today.

The GOP especially was in turmoil during the 1930’s. You had some like Landon who ran against FDR in 1936 who agreed with FDR more often than not. He didn’t offer the voters much of a choice. Then you had two other prominent factions fighting for control of the GOP, neither of which resonated with the people: The pro-Germany wing, and the strict isolationist wing which sometimes allied itself politically with the German sympathizers.

Given all that, FDR couldn’t help but win.


24 posted on 08/22/2011 2:35:32 PM PDT by Melas (u)
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To: Melas

Ahh...well she remembered it being FDR. I can’t say, because in spite of current rumors, I’m not old enough to know! :)


25 posted on 08/22/2011 3:19:48 PM PDT by Outlaw Woman (Palin/Perry 2012)
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To: Melas

Thank you for that information Melas. I can see I need to do some research on this man.


26 posted on 08/22/2011 3:21:50 PM PDT by Outlaw Woman (Palin/Perry 2012)
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To: Outlaw Woman
What kind of a wartime president was he? His record is barely touched on (not like his economic record). I’ve not done enough reading on him to know.

Read "America's Retreat From Victory" by Senator Joseph R. McCarthy if you can find a copy. It was originally published in 1951 and was last printed in 1965. It is an exhaustive account of the career of George Catlett Marshall but has extensive coverage of FDR as well as many of the major players pre WWII, during and post WWII. A very interesting read. It almost seems prescient.

Regards,
GtG

27 posted on 08/22/2011 3:25:09 PM PDT by Gandalf_The_Gray (I live in my own little world, I like it 'cuz they know me here.)
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To: Gandalf_The_Gray

Thank you so much for that recommendation. Lord...hope I can find it.


28 posted on 08/22/2011 3:28:10 PM PDT by Outlaw Woman (Palin/Perry 2012)
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To: murron
How could a president that was presiding over a bad economy that only got worse under his tutilage get reelected not once, but twice?

FDR used many of the exact same lies Obama is trying today i.e. "It's my predessesor's fault (Hoover)", "It's going to take a long time before the economy turns around but what we're doing is working", "The rich are too rich and we need to tax them", "all this 'investment' (gov't spending) we're doing will bear fruit later".

Problem is...everyone now recognizes that these arguments made by FDR didn't work and were lies, but Obama fancies himself as the new FDR. It's laughable to think that FDR tricks are going to work again in a post-USSR America.

29 posted on 08/22/2011 3:42:01 PM PDT by Siena Dreaming
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To: MichCapCon

FDR was an economic incompetent. He had no idea where money came from except to ask Mummy for some. He resented people who actually knew how to make money.

As a politician, he surrounded himself not with compentent business people with lifetimes of practical experience, but with knot-headed academics who were bound and determined to force the world to function according to their pet theories, which were decidedly leftist.

When their theories resulted in a decade of disaster they spun the self-justifying myth that but for their interventions things would have been much worse.

Modern interpretation of events has it that WWII saved us from Depression. Yes and no. Not in the Keynesian way most people understand of massive gov’t spending and hiring. What worked was FDR’s desperate need to push his lefty theorists out of the way in favor of people who could actually make the war machine work. This, along with his death, lifted the pall of economic fear from off the marketplace, encouraging businesses to put idled capital back to work with the reasonable hope that the gov’t wouldn’t be seizing, taxing or regulating success away.

We are now living through the same script, being read and implemented by the same sort of fools who gave us the first round. Having believed the FDR myth they are following the same course. It is inevitable that the results will be the same - disaster.


30 posted on 08/22/2011 3:47:24 PM PDT by Paine in the Neck (Where's he getting these ideas? He's not smart enough to be that stupid all by himself.)
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To: mlo

Well you may or may not have intended this but your response has a somewhat of a nasty tone to it. Let me tell you about my mom: she was born in 1933 and lived with her maternal grandparents until she was around 11. She lived in downtown St. Louis around the Forest Park area. She and her friends could run around (barefoot) in DOWNTOWN with no fear what-so-ever. She was just a tot when FDR was in office but that saying, a chicken in every cookpot, stands out in her mind. She thought FDR said it and that has sealed it in her mind.

Now, my mom lost her 20/20 vision over 40 years ago; since then she mostly has her memories of things past; her childhood being one of the warmest for her. Now Hoover may have stated it originally, but perhaps FDR re-stated it. In any case, I will do some research and will tell her if the subject comes up again. The point is, she felt, as a little child, that FDR was some kind of savior and all things would be ok and that most certainly was due to his rhetoric and ‘fireside’ chats. She is having a hard time with hearing the truth about him and his (and that hag wife of his) true intentions.


31 posted on 08/22/2011 3:48:37 PM PDT by Outlaw Woman (Palin/Perry 2012)
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To: Outlaw Woman
"She was just a tot when FDR was in office but that saying, a chicken in every cookpot, stands out in her mind. She thought FDR said it and that has sealed it in her mind."

It's that sealed mind thing I was getting at. Since it is demonstrable that FDR did not say the thing the she has sealed in her mind, then this is an opportunity to illustrate how one can "seal" things that simply aren't true. Anyone can. We should always be open to revising our opinions in the light of new facts.

"She is having a hard time with hearing the truth about him and his (and that hag wife of his) true intentions."

And that she "sealed" one incorrect fact about FDR into her mind can be used to open her mind a bit more. That's what I was getting at.

32 posted on 08/22/2011 4:24:07 PM PDT by mlo
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To: mlo

Ok...I’m just a bit defensive regarding her. She is possibly the most ‘innocent, naive’ adult human being that I know. Honestly, my mom is pure in soul and innocence. I don’t want to shatter that. She is learning because she listens to Mark Levin who often brings up FDR during his show but she is having a hard time with what is being reported. All she remembers is the fact that she felt ‘secure’ in spite of what was happening. Of course this is through the eyes and thoughts of a child.

Thanks for clarifying the post. (I’ll be (and I have been) working on ‘re-educating’ her with the “truth”)


33 posted on 08/22/2011 4:46:26 PM PDT by Outlaw Woman (Palin/Perry 2012)
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To: Melas

Honestly, it doesn’t sound too much different than what’s going on today. The Republican party is divided into tow factions: the conservatives, or the Tea Party, and the liberal RINOs, known as the establishment Repubs. Alf Landon was obviously a RINO. Kind of reminds me of McCain during the campaign saying that we didn’t have anything to fear from Obama.


34 posted on 08/23/2011 5:03:05 PM PDT by murron (Proud Mom of a Marine Vet)
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To: Melas
That was Hoover that promised a car in every garage and a chicken in every pot.

No, it wasn't That's an urban legend.

35 posted on 08/25/2011 4:38:52 PM PDT by Fiji Hill
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To: Melas
As a wartime president, it’s hard to find fault with FDR. The Manhatten project for example was FDR’s baby. It started with correspondence between him and Albert Einstein. Most importantly, FDR was the exact opposite of LBJ. LBJ tried to micromanage the war and involved himself in every facet. FDR let generals run the war.

I find a lot of fault with FDR in his wartime diplomacy with the Soviets.

36 posted on 08/25/2011 4:44:50 PM PDT by Fiji Hill
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