Tuesday, October 28, 2008

FDR's failures will be Obama's

During high school and college courses of American History that I took (I had enough for a minor in college), President Hoover was villified, Roosevelt diefied. Sort of like Bush-Obama. It's still that way in most sources. But no sensible person can look at 1932-1942 and not see that Roosevelt totally failed with his New Deal! He taxed everything that moved, particularly poor people who were taxed for the smallest pleasures like chewing gum and movie tickets. The rich did fine. Each time the stock market would start to recover or the unemployment rate would go down, he'd throw another chunk of the alphabet (AAA, NIRA, TVA, WPA, NRA) on the fire, and whoosh, he'd put out the flame of progress.

Hoover was only in office a few months when the stock market collapsed--he had no role in that at all. Unemployment was 4% in August 1929, and the crash was in October. (Somebody tell Joe Biden.) Hoover tried a little and he tried a lot. He tried free markets, tax cuts, and tax increases. He tried bailing out banks and insurance companies. Has a familiar ring?

Some of it looks just like entry level "New Deal" to me. So if it didn't work, let's try more, and that's what FDR did, and did, and did some more. We'll never know what might have happened if Hoover and Roosevelt had done nothing. Unemployment peaked in 1933, well after FDR's 100 days. Well, if you won't blame FDR for that, then don't blame Hoover for the crash. But it never got out of double digits the whole decade, and was back up around 20% in 1938. If we hadn't gone into WWII when all the men went off to war and unemployment dropped below 3% because no one was left in town but my grandfather and my great-grandfather to run things, we'd probably still be doing the New Deal. In many ways, we never quit. And each time we get a Democrat in office it's like the ghost of FDR and he tries it all over again, whether or not we have a recession or stagflation or a tech boom.

Don't trot out the WPA and wave that at me. My home town has a nice little WPA mural in the post office. We had a sweet little state park down the road where they planted trees. It's still used today--we have our class reunions there. Bright eyed, idealistic college kids can write papers about the WPA's contribution, but what the town really had were several small companies that employed people--a printing plant, a publishing company and a fulfillment agency. That's what fed people and built homes--not the government paying people an allowance to paint, write, sing, dance or build cabins in parks or roads. For the 3 million or so who were in WPA I'm sure it was a nice chance to get away from home and earn some self respect, but most people had jobs or were working the family farm, or taking in laundry or boarders, or selling garden produce.

FDR was a brilliant politician, but none of his programs turned the economy around in the Depression. It was stop-gap government sop and Obama will take us in the same direction. Thomas Sowell says

    Barack Obama's "change" is a recycling of the kinds of policies and rhetoric of the New Deal that prolonged the Great Depression of the 1930s far beyond the duration of any depression before or since.

    These are the same kinds of liberal policies that led to double-digit inflation, double-digit interest rates and rising unemployment during the Carter administration. These are "back to the future" changes to economic disasters that need repeating.

    Make no mistake, the political rhetoric of FDR was great. For those who admire political rhetoric, as so many of Barack Obama's supporters seem to, FDR was tops. For those who go by actual results, FDR's track record was abysmal.
    Thomas Sowell

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