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.
(This does not mean that I support either of these fiends...)
Yes we beat Germany and Japan. But Stalin got everything he wanted from the war and more.
Roosevelt lost the most important battle of the war. The battle of Yalta. It was disguised to look like negotiations. Without a shot being fired, the weasel handed all of East Germany, Poland, Czechoslovakia, Hungary and more to the disbelieving Stalin - who could not believe what a stupid man he was negotiating with.
If only he died a couple of weeks earlier, millions would have missed fifty years of slavery.
Or he was ideologically sympathetic toward the communist system.
The Democratic Party was, after all, the party of the white slave owner in the South. FDR did not want to offend the white Southerner's during the "Depression"(?) by helping the black farmers in the South. Franklin sent Eleanor to go fly with the Tuskeegee Airman, generate some headlines and con the black voter to vote Democrat. (sigh)
Now, the Democratic Party is simply out to enslave everyone.
Neville Chamberlain's appeasment policy was popular in Britain, and Winston Churchill railled helplessly against it from a back bench. Likewise 80% of Americans opposed entry into WWII before Pearl Harbor. Against that backdrop the efforts of FDR to inflame war between the US and Germany just didn't get any traction before Pearl Harbor.Of course we now know that FDR was informedat the end of November 1941 that the Japanese Embassy had been ordered to destroy its diplomatic codes and end negotiations with America at a certain time on Dec 7, 1941--but at the time, that was a closely guarded secret. Had the public known that in December 1941, FDR would have been impeached--for FDR had mousetrapped the 80% of the public who, before Pearl Harbor, opposed entry into WWII. Because somebody--somebody who was never punished or even had his career ruined--leaked information which created a sensation of antiwar agitation just when the Japanese were launching their attack on Pearl Harbor.
FDR's antiGerman policy hardened in the summer of 1941, which just happens to coincide with the invasion by Hitler which started June 22, 1941--the invasion of the USSR.
FDR was hostile to the British Empire, and didn't take suggestions very well from the British Navy--part of the reason that 400 US merchant ships in US coastal waters were lost to U-boats by June 1942.
Oh, and did I mention that FDR's first diplomatic move as POTUS was to recognize the Soviet Union?
True, but they were not considered "Conservative" at the time, but "Progressive" actions by the Fed. You also fail to mention that many of the programs credited to Roosevelt, were actually started during Hoover's administration. The WPA being one of them.
The US republic ended in 1913 with the passage of the 16th amendment.
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