Saturday, February 21, 2009

Sourcing the Morgenthau 1939 quote

At the coffee shop this morning another imbiber handed me a quote on a torn piece of paper, "We are spending more money than we have ever spent before, and it does not work. After eight years we have just as much unemployment as when we started, and an enormous debt to boot. - U.S. Secretary Henry Morgenthau. . . May 1939." Being a librarian, I looked into his handsome face and said, "Do you know the source?" And he didn't.

So when I got home I googled it, and found every conservative, libertarian and anti-Bam source on the internet is using it. That's not a good sign. Even going to a fact checking web site like Snopes or Factcheck is dicey, because even those are political, whether liberal or conservative. Someone, somewhere, must know where the original is, but with libraries like Fisher in the College of Business at OSU closing because it's all free on the internet, I don't know if I could find a paper copy. And these days, for this librarian [retired], paper is the "gold standard." Anything digitized, like all that stuff Obama promised us would be up there for us to read, can be altered. And although his staff had wiped out all the Bush stuff on January 20, they can't even get his press conferences up in a timely fashion so you can fact check. (I wonder if his IT staff paid their taxes?)

Anyway, I only recently (yesterday) began reading Alan Caruba because he'd written about coal, which is extremely important to Ohio's economy, which Obama and his green friends are trying to kill. Here's what I found in a Caruba blog.
    In 1939, ten years after the crash on Wall Street, the Secretary of the Treasury, Henry Morgenthau, Jr., told the House Ways and Means Committee:

    “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong…somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. 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!”
    Does history repeat itself? Yes, it does. And there is every appearance that the White House and the Congress intends to repeat many of the errors of the last Depression that came to be known as Franklin Delano Roosevelt’s New Deal.

    With exquisite timing, after ten years of research, professor of history, Burton Folsom, Jr. has published “New Deal or Raw Deal? How FDR’s Economic Legacy has Damaged America” ($27.00, Threshold Editions).

    To get an idea of just how bad the U.S. economy was during the 1930’s, Folsom notes that, even though the U.S. had budget surpluses in 1930 and 1931, government spending “ballooned and far outstripped revenue from taxes.” It was the Wall Street Crash of 1929 that precipitated the Depression, but it was FDR’s “solutions” that deepened and lengthened it, actually preventing any solution.
I'm guessing he found the source in Folsom's notes, but unless I see the committee report somewhere in print, I'll reserve judgement on the authenticity. Some quotes are just too good to be true, and after 8 years in office, I'm not sure Roosevelt had any people left who would question his plans. Anyone got a source?

And please, let's not give all the credit for the mess to FDR! President Hoover first did what Obama is doing now with help in the fall from Hank and Ben before he took office, spiking the unemployment to the 20% range. FDR's policies just lengthened it. If those two presidents had sat on their hands, if they'd just gone on vacation or wherever the summer White House was in those days, we'd be a much different country today. Regardless of whether we have a Democrat or a Republican in office, we've been bankrupting our country with social spending, not military spending, for years.

You can see from this that spending on social/human services levels or dips a little under a Reagan or a Bush, but it doesn't really go down. We'll be stuck with SCHIP and summer lunches for children forever, even though they've never been proven to help poor children or decrease poverty. In America, it's all about intentions, never results. If it feels good, it must be good. Which brings me back to the Morgenthau quote--got a paper source?

Update: Caruba has kindly confirmed the source from the Folsom book: Morgenthau Diary, May 9, 1939, Franklin Roosevelt Presidential Library.


Alan Caruba said...

Folsom, the author of "New Deal or Raw Deal?" gives the following citation for the Morgenthau quote:

Morgenthau Diary, May 9, 1939, Franklin Roosevelt Presidential Library.

Enjoyed visiting your blog.
Alan C.

Norma said...

Thank you. Now I can sleep better knowing someone checked.

Anonymous said...

How odd that by the diary date---1939--FDR was only in office for six years yet his own Treasury Sec says they'd been doing it for eight years.

You'd think he'd get the years he'd been working there correct, I mean it's a lot easier than the numbers involving a national budget.

Alan Caruba said...

The "diary" might now have been an annual one, but rather a collection of Morgentau's thoughts, much like a memoir.

Why don't you go to the FDR Library like the author did, researching his book for ten years?

Norma said...

Or, perhaps since Hoover also threw money at the problem, he was folding in some of that time?

Anonymous said...

The quote is clear that he states "I say after eight years of THIS administration". Not Hoover's, but FDR's.

Unless Caruba is in error he clearly states the quote came from: "Morgenthau Diary, May 9, 1939, Franklin Roosevelt Presidential Library."

If Folsom had gotten the quote correct or made it's origin clearer--and he hasn't--we wouldn't have this question.

Of course now every conservative Tom, Dick and Harry has thrown this thing around; Folsom may have done a disservice and left them hanging with poor sourcing.

Then again perhaps Morgenthau had access to some sort of space-time continuum machine.

Anonymous said...

When one looks at the data it becomes even more strange. Unemployment in 1933 was at 24.9% (per US Dept of Commerce). By 1937 it had fallen to 14.3%, there was then a recession where unemployment rose to 19%--which some economists argue was due to the decision by Morgenthau and Republicans to curtail stimulus--Folsom may not agree of course. By 1939 unemployment had dropped down to 17%, certainly better than 24.3% and the trend had been downward except for 1938.

The whole thing looks a bit sketchy when put up against the facts.

Norma said...

Anon 3:10. Just to be straight in your thinking: you'd have no problem with this if he'd said 6 years and 2 months or something closer to the time frame? Then you would have admitted he was right? Maybe he was thinking 2 FDR terms (8 years) and rounded down a bit. However you cut it, history shows FDR's economic plan was a total failure (except for those wanting more socialism) and libs try to cover that up. Until Obama came along, never had the left so worshipped and covered for a failure. Now he's been outdone by B.O. Finally knocked off his pedestal by one of his own.

Anonymous said...

The comparison of Obama and FDR seems a bit harsh. FDR was a patriot, even if his economic views were skewed to the left. Obama intends to destroy the country.

Anonymous said...

Not quite Norma, you're letting right-wing nuttiness and emotion overtake intellectual sharpness.

History doesn't 'show' that the New Deal was a failure. In fact most economic historians would argue otherwise to varying degrees, though a few might agree.

Bernake, our Fed Reserve Chairman, wrote extensively about the depression on his PhD thesis and doesn't think the New Deal was a failure. He's certainly no socialist.

If you read that actual history of the era you'll see that a decline in fiscal stimulus in '37 driven by Morgethau and others resulted in a rise in unemployment.

You'll also note the trend for unemployment was down while GDP actually grew from '33 to '39. And finally you haven't realized that going war in 1941 resulted in fiscal stimulus of major proportions; WWII was economically a huge fiscal stimulus package for the economy.

None of this has nothing to do with likeing socialism, it's simply using Keynesian fiscal policy to for pump-priming the economy.

Folsom's quotation of Morgenthau is suspect since 1. The dates don't match up by a couple of years and 2. economic data doesn't match up.

One would expect more from a professional historian.

Anonymous said...

I'll add this list of 38 academic papers from economists that show there isn't a consensus on the New Deal's failure. Looking at Folsom's background and other writings he's at the far right extreme amongst historians (and he's no economist).

Let's at least be honest to all sides about this.

Alan Caruba said...

Allowing anyone who prefers to be "anonymous" to post on your site should be reconsidered. He is sowing discord for no good reason. It is YOUR blog, not his.

Norma said...

Most of the time I know who the anons are, and as long as they aren't porn or nasty or selling viagra, I don't mind. If I weren't retired, I'd be anonymous too--esp. with Obama in office!

I believe, as you Alan do, that FDR piled bad program on bad, and saying that the Fed should have jumped in sooner with more is just a pipe dream. Typical of someone who works for the Fed. You can look at the calendar and see what FDR did to the country.

Anonymous said...

Yes, facts and logic cause discord to Alan Caruba's world view and he reacts with defensiveness and anger, just like flat-earthers reacted to evidence the world was round.

Caruba's not the sharpest tack in the box but one would expect a bit more intellectual sharpness from a self-professed 'professional writer'.

While amateurs might be disinclined to understand or ignore the data, most educated individuals see an issue that needs to be resolved ie Folsom's quote seems to fall apart when held up to rational scrutiny.

Norma, while you may believe FDR piled bad program on bad the economic evidence gives a larger GDP in 1939 then in 1933 and a lower unemployment rate.

Note: Here's a basic civics lesson; The 'Fed' had nothing to do with creating or implementing FDR's programs. The Fed controls monetary policy not executive department programs.

Anonymous said...

One need only google Alan Caruba to begin to notice the extent of his intellectual dishonesty. An 'industry shill' and 'corporate hack' are among the more favorable descriptions of this particularly poor excuse for the male species.

Wow, quite a somewhat embarassing pedigree he has; it does take a particular kind of self-delusional person to be able to spout out the banalities this simpleton does. LOL.

Alan Caruba said...

Guess who is calling me names, Anonymous? And of course no one knows who you are because you are too scared to let them know. Yes, there is a bogus Wikipedia post about me and elsewhere, but I am confident the truth will protect me. Want to know more? Go to I posted all my credentials.

Anonyous keeps boasting about his intellect, but I'm betting he never read Folsom's book. He lacks the guts to identify himself and yet feel free to cast stones at me. What courage. None.

He is a termite on this blog.

Norma said...

Although I can't be sure, Alan, but if he found this blog he's probably a librarian--that profession is 223:1 liberal to conservative, can pull cites from print or on-line, can make any argument, can make information disappear or create it. Oh, they love Wikis. Librarians weren't entrepreneurial enough to invent Google, but they sure know how to use it. I suggest too he go to your site, because I'm closing comments on this one. I'm on Spring break.