With all this spending and restructuring of the economy you would think that the economy would have recovered right? Wrong. Look at the unemployment graph on this website
Roosevelt was elected in 1932 and took power in 1933. All of his programs never brought unemployment below 10 percent. It wasn't even a steady decline. We had a second depression in 1938. That's just when all of his programs would have had time to take effect.
Of course people could make the argument that his programs weren't given enough time to work. But if they were exactly what the country needed then why did it take until 1941 for unemployment to get anywhere approaching acceptable?
Now go to this unemployment report from November 1980-January 1989, from Reagan's election to Bush I's inagauguration.
He inherited an unemployment rate of 7.5 percent from Carter in Jan 1980. It peaked at 10.8 percent in November 1982. That's two years of high unemployment, totally unacceptable. But look what happens afterward, a slow, but steady decline until it was at acceptable levels, almost full employment by the end of his second term.
Granted, this was with a war buildup, just as FDR's pre-war buildup, but on a much larger scale.
The economies are far different and the world situation was different so you can't fairly compare them. But they are worth comparing because Reagan was cutting taxes and deregulating the economy while FDR was doing the exact opposite. Reagan's growth wasn't based on government remaking America, he let the private sector remake itself.
If we want a stagnant economy, if we want to become like Europe and Japan, then we can sit back and let the left ruin our private sector by strangling it with red tape and higher taxes. Or we can fight them, pass actual reforms instead of wholesale takeovers of the economy and let the private sector do what it does best, create wealth and jobs. The government has never done that and it won't now. During this crisis we need to not let our fears allow us to let benevolent tyrants take control of our country.
Sure we need reforms in many aspects of our government. Let the congress pass those new rules to make business more able to fairly provide goods and services. Don't hamper them with more red tape and taxes. And especially don't hamper them with Marxist wage controls and profit limits like are in the current health care bill. Don't let them use the government to re-engineer our society into one that looks like Europe. We are not subjects dependent on government programs for our well being. We are citizens of a republic, if given the chance and the freedom we will provide for ourselves. If the government would get out of business and step back into its proper goal as the referee, not a player, then our country would be a lot better off.
8 comments:
In the 1920s, taxes were cut dramatically. And then cut again. The result: Booming economic prosperity or Deep depression? Umm . . . that would be depression.
FDR inherited 25% unemployment; getting it down to 10% seems to be somewhat of an achievement. Doesn't it? How had the Republican Administration responded?
It is arguable that without the action in the 1930s in terms of those public works projects and the financial reforms the nation and its businesses would not have been able to build up for the war as easily and as quickly and as effectively as it did in the 1940s. (I recognize that this is an interpretation that good people can disagree on.)
Reagan did cut taxes and reduce regulation, something unlike FDR. But he also was very much like FDR in priming the pump. Military spending skyrocketed in the 1980s. Military spending is government spending. It primed the pump to a significant degree in the decade, which greatly increased national debt but also led to important innovations in the private sector (sponsored by public spending, though).
But by the way, the tax cuts didn't work so well for Bush I, did they? He was a one-term president largely because of economic stagnation prompted by his predecessors' tax policies. In fact, if you continue examining the unemployment chart you linked to, you will discover interesting things. First, you will discover that Carter's numbers leaving were lower than when he entered and that it was lower than that during most of his administration. Second, you will discover that unemployment increased under Bush I to levels as bad as and worse than Carter. Third, you will discover the unemployment rate decreased to levels lower than Reagan under Clinton. All of this data, I suppose, is inconvenient to your argument.
But I'll be fair and point out that unemployment rates were low under Bush II and increased only at the end of his presidency (after his policies were in place?) and have gotten worse under Obama. I would suggest that there hasn't been enough time to know all the reasons for this, but that's my opinion. I don't wish to represent it as fact like you have.
You can have your preferences and disagreements with FDR and the "Marxists" (come on, is this the 1950s?). I don't begrudge you that; we should all have our opinions and interpretations. However, I wish you'd use history more fully, fairly, and accurately. Choosing the bits that agree with your ideological predilections, as you did with the unemployment data, is frankly dishonest.
As I was posting this I realized that that part of my argument wasn't that solid. The unemployment numbers are kind of a stretch. And they aren't totally conclusive.
From what I understand, Hoover wasn't hands off when the depression hit. He was meddling with the economy and that didn't help anything.
I think a bigger part of this, is the fact that FDR's legacy is that he brought us out of the depression. I only see evidence to the contrary. If he had followed the precedent of 2 terms for a president, he would be considered an even bigger failure than Grant. The war saved FDR's presidency from the failed New Deal.
About the Marxist thing. I'm not saying the "commies" are taking over the government. I'm saying that the Marxist political ideology is being advanced by the left. Everything pushed by Obama and the congress in Obama's first year are ideas rooted in Marxist/socialist philosophy.
Every solution they have is to give more power to the federal government. They have a federal government solution for all of our problems.
About Bush II. His policies aren't to blame. What started this mess was the banks being forced to give out bad loans to people who could never make the payments. The banks were forced to make these loans or else they would be in trouble for discrimination. That isn't the whole problem, but it is what destabilized the market in the first place.
There are other things I'm sure that are going on, maybe some increased regulation is in order for wall street, but I don't see how Bush II's policies would have created this situation. Everytime I hear Obama say "the failed policies of the last 8 years" I want him to say "such as..." He can't, because these problems weren't caused by Bush's policies. If they were, it would be easy to tick off a list of bad policies. Instead, all they have is, "giving tax cuts to the rich." (Which is a Marxist class warfare tactic in and of itself.)
I think my main point though is that FDR's New Deal is not the model to follow when dealing with a financial crisis. Americans in general think FDR saved this country and so now they want to replicate what he did. This is a case where history is being used to determine our present course, and I think it is being misused by decision makers in Washington.
Sure, where there are unsafe practices on wall street that threaten to bring the whole system down then we should regulate those, or just insulate them somehow from the economy so that when they fail, the whole system doesn't collapse. We shouldn't try to take over health care, increase spending, expand all the entitlements, and vilify the rich when regulating the free market is all that needs to happen.
I don't think moving 15% of the unemployed onto government works programs counts as an achievement. The problem is, that argument has been largely accepted by the American people.
If FDR's policies were so correct, then why the second depression in 1938?
I will not discuss Bush/Obama because insufficient time has passed for anyone to know causes and results with anything close to certainty. (Of course blind ideology, on either side, furnishes ready answers whether it is Marxism or plutocracy or Fascism.) I’m far more comfortable with evidence from the past.
There wasn’t a second depression in 1937-38. It was a recession. The terminology is important. Most history texts refer to it as the Roosevelt Recession, following the term of the day. It was caused by reduced federal spending. Relief payments dropped sharply and social security withdrawals cut consumers’ disposable income. In an economy increasingly pegged to consumer purchases, declining cash meant less spending. And so less produced. And so fewer employed. And so less money. And around and around it went. A Federal Reserve contraction of money in circulation did not help either. These activities—reduced spending on relief and contracting the money supply—were because FDR was concerned about budget deficits (something Reagan and Bush didn’t care about but Clinton did—go figure) and inflation. Historians suggest that it was this desire to balance the budget that led to the recession. Their evidence is that when emergency relief put more people to work and more money into their hands, the recession ended as consumers bought more.
A further point: no self-respecting historian today argues that the New Deal ended the depression. Just to be sure, I pulled out all my textbooks. (They are written by academics, so I realize that means these are all probably bona fide Marxists according to prevailing notions of liberal bias.) But NONE of the texts argues that FDR’s New Deal ended the Depression. So I wonder where people are getting this information if it isn’t from historians. Politicians? Talk-show hosts? Celebrities? Why consult experts?
I don’t follow the shrill yelling and finger-pointing that counts as public debate these days. So, I have missed how everyone is saying FDR ended the depression with the New Deal and we should emulate that. If they are, they are not getting their information from historians. I think that is an argument for people who know history should stand up and correct the ideologues. But history and facts can never persuade one out of one’s ideology I suppose.
Moving 15% of unemployed Americans to employment might not been good in your book if the employer is the federal government. I understand that perspective. However, it was good for those many millions and their families, I’d bet, and the business owners in their towns who benefited when they started buying goods. It also did produce things that were public goods—better roads to facilitate better transportation of goods to make a more efficient economy, better airfields and shipyards that allowed for a more efficient wartime economy when the time came, better energy production to allow more people to have access to electricity that led to more economic growth, too. Public investment absolutely grew the federal government. And that could be bad. It also generated new avenues for private economic growth and investment. And that could be good.
And don’t blame Hoover. He inherited a mess. Almost always for something so large as the Great Depression, you have to look earlier to see the roots. The roots for such things, too, are always multiple, so whenever someone says X caused Y (or X solved Y) you should be skeptical. (However, it is interesting to note that the sharp tax cuts at the upper end of the income scale in the 1920s, 1980s, and 2000s produced economic decline afterward and higher unemployment and a wider income inequality; it is interesting because those cuts are supposed to do the opposite.)
So the recession of 1937 was because the federal government stopped spending money. Doesn't that show that the programs weren't growing the economy? They were just propping it up with government subsidies?
Clinton didn't care about deficits, Newt Gingrich did. During Clinton's first two years he raised taxes and spent. Only when the Republicans came in did the budget start to get under control. In 1995 Gingrich wanted to cut the budget, but Clinton wouldn't have it. So the congress refused to raise the debt limit which forced a government shutdown. This whole idea that Clinton is responsible for the budget surplusses in the 1990s is irritating.
Certainly the Republicans helped reduce budget deficits in many ways. And certainly economic policies of the Democratic Administration helped promote economic growth which played a pivotal role.
I guess in judging the 1930s economy the standard one uses becomes important. You are correct: the government pulled out, the economy declined, so it was proof that the economy was not recovered, which is proof that the New Deal hadn't solved the Depression. Remember: No credible historian says it did. So, I'm not sure what you've proved. You've merely stated what historians already have concluded.
If the standard is: Does the economy grow without the help of federal investment? Then, I think we'd have to go back to about 1800 to get a good answer, because federal investment in "internal improvements"--from canals and harbor improvements to dredging rivers and transcontinental railroad subsidies--generated economic growth throughout the nineteenth century. Federal policy in removing existing residents and then giving the land away for nothing or next to nothing into private hands and especially corporations helped facilitate economic growth. Federal defense spending throughout the last century generated enormous economic growth (and vast government deficits don't forget). The federal subsidy to the vast automobile complex (from highways to tax cuts for manufacturers to subsidizing oil and our access to it) guarantees all sorts of private economic growth.
I cannot think of many/any times when the federal government did not enact policies directly (as often as indirectly) that benefit the creation of private wealth. Why some kinds of "interference" are "creeping socialism" and others are promoting the national interest is unclear to me (except explained via ideology which cannot be rationally debated).
Some historians have suggested that what FDR did was prevent a revolution from occurring. That he, in fact, saved capitalism by "governing" it. (Some say Reagan did the same to the welfare state: saved it by reigning it in.) "Governing" capitalism is abhorrent to the free market I know, but the "free" market hasn't existed in this nation in a meaningful way ever if you mean non-government investment/interference in economic matters. Who benefits from government investment/interference has changed, slightly; and as government policy does more for the less powerful, there seem to be more complaints from conservatives.
(I believe this discussion had degenerated away from historical evidence, so I'm likely to refrain from future responses because we will be relying on beliefs with which neither of us can persuade the other.)
This comment is kind of long-winded, philosophical, scattered, and somewhat preachy, sorry.
I think that government investment in infrastructure isn't necessarily bad. The main problem I have with what FDR, and other presidents, did was to ignore the constitution. Why did we need a new bill of rights if his proposals were already legal within the constitution? I watched a documentary about him a few weeks ago. It talked about how he rammed through legislation that the legislators didn't even read. They voted for it of course, but the idea that they were impotent and were waiting for him to save the day anti-republican.
He forced corporate executives to meet with labor leaders and told them they had to reach an agreement. One of the historians they interviewed talked about how he (paraphrasing) put them in a room and locked the door until they came to an agreement. The historian talked about this like it was the greatest thing ever. No mention that is was authoritarianism that is totally unconstitutional. Where does the constitution give the president the right to do that? I know that people tire of conservatives always beating this drum. But that is why we have the constitution. It is either the law or it isn't. It is the backstop against which every action should be checked. It defines the relationship between the federal government and the states. It defines what the federal government CAN do, and that's it. This notion of the "living constitution" is just a way for people to make it say whatever they want it to say. The founders gave us a way to change it. If we want to change it, then we can, through the proper means. If we don't then no president, legislature, or court can change it for us.
Maybe the president does need more power. I think there is merit to a limited and effective welfare state. I think the economy does need to be regulated. Some of those things are in the constitution. But some of them aren't and until they are they shouldn't be happening. Regardless of how good of an idea they are. The way FDR rammed things through is dangerous. Any president overstepping his bounds is dangerous.
The court deemed many of FDR's reforms unconstitutional. His answer was to pack the court, not to abide the constitution, but to remake into what he wanted it to be.
When it came time for his term to end after 8 years, he thought the country couldn't do without him. According to the documentary. If the republic could withstand Washington stepping down after 8 years, it certainly could have withstood FDR leaving.
I think much of this stuff is for the experts to decide. I think that is the whole purpose of a republic. To elect a few of us to go decide what is the smartest course of action based on what is going on. And because we are giving them the power to act in our name, we limit the things that they can do, so they have to come to us if they want the power to do more things in our name.
We need to decide the purpose of the federal government. Does it exist to provide equity. Was it created to provide people with the basic necessities of life such as food and health care? I don't see that anywhere in the constitution. If times have changed, and we want to put that in, then let's do it. But let's not let well intentioned politicians take it upon themselves to turn our country into a paternalistic nanny state without first checking in with us.
If Massachusetts wants to make it part of their state that every person is guaranteed and mandated to have health care, then that's fine. But we didn't give the federal government the power to do the same thing. We just have to invest our power in laws, not men.
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