If You Want Obamavilles, Repeat What Hoover Did

 “The ideas embodied in the New Deal Legislation were a compilation of those which had come to maturity under Herbert Hoover’s aegis. We all of us owed much to Hoover.”

 - Rexford Tugwell, economic adviser to and member of FDR's Brain Trust, 1946

Fact:   Hoover expanded civil service coverage of Federal positions.

Fact:  Hoover canceled private oil leases on government lands.

Fact:  Hoover instructed the Justice Department and the IRS to pursue gangsters for tax evasion.

Fact:  Hoover set aside 3 million acres of national parks and 2.3 million acres (9,000 km²) of national forests.

Fact:  Hoover advocated tax reduction for low-income Americans.

Fact:  Hoover closed certain tax loopholes for the wealthy.

Fact:  Hoover doubled the number of veterans' hospital facilities.

Fact:  Hoover wrote a Children's Charter that advocated protection of every child regardless of race or gender.

Fact:  Hoover created an antitrust division in the Justice Department.

Fact:  Hoover required air mail carriers to adopt stricter safety measures and improve service.

Fact:  Hoover proposed federal loans for urban slum clearances (not enacted).

Fact:  Hoover organised the Federal Bureau of Prisons

Fact:  Hoover reorganised the Bureau of Indian Affairs

Fact:  Hoover instituted prison reform

Fact:  Hoover proposed a federal Department of Education (not enacted)

Fact:  Hoover advocated $50 per month pensions for Americans over 65 (not enacted)

Fact:  Hoover chaired White House conferences on child health, protection, homebuilding and home-ownership

Fact:  Hoover began construction of the Boulder Dam (later renamed Hoover Dam)

Fact:  Hoover signed the Norris – La Guardia Act that limited judicial intervention in labour disputes.

Fact:  Hoover raised the tax rate on the "evil rich" from 25% to 63% while arguing for decreases in rates for the lower incomes. See the Revenue Act of 1932 and his speeches on progressive taxation.

Fact:  Hoover increased federal spending by 52 per cent from 1929 to 1933. Adjust to reflect deflation, and the Hoover figure is a disconcerting 88 per cent.

Fact:  Hoover massively increased infrastructure programmes.

Fact:. Hoover recognised measures such as Federal and state and local public works, work-sharing, maintaining wage rates ("a large majority has maintained wages at high levels" as before), curtailment of immigration, and the National Credit Corporation and urged more drastic action.

Fact: Hoover established a Reconstruction Finance Corporation, which would use Treasury funds to lend to banks, industries, agricultural credit agencies, and local governments.

Fact:  Hoover broadened the eligibility requirement for discounting at the Fed.

Fact: Hoover created a Home Loan Bank discount system to revive construction and employment measures, which had been warmly endorsed by a National Housing Conference recently convened by Hoover for that purpose.

Fact: Hoover expanded government aid to Federal Land Banks.

Fact:  Hoover set up a Public Works Administration to coordinate and expand Federal public works.

Fact: Hoover issued an order restricting immigration to increase employment for citizens.

Fact:  Hoover made it a priority to weaken the "destructive competition" (i.e., competition) in natural resource use.

Fact:  Hoover granted direct loans of $300 million to States for relief.

Fact:  Hoover worked to reform the bankruptcy laws (i.e., weaken protection for the creditor).

Fact:  Hoover also displayed anxiety to "protect railroads from unregulated competition," and to bolster the bankrupt railroad lines.
 
Fact:  In addition, Hoover called for sharing-the-work programmes to save several millions from unemployment.

Fact: In 1931, Hoover instituted a massive increase in government spending that included direct relief programmes and public works projects in order to provide jobs and security for the growing population of unemployed workers.

Fact:  Hoover supported the initiation of a national sales tax, a measure that failed in Congress.

Fact:  Hoover encouraged Congress to pass a farm act (the Agricultural Marketing Act), which would help farmers to increase efficiency in selling their goods and grant them loans.

  
Fact: To give farmers some added protection from foreign competition, Hoover also supported raising the agricultural tariffs, though his poor political acumen was not able to convince Congress of his plan, and his tariff ideas failed in Congress.

Fact: To give farmers some added protection from foreign competition, Hoover also supported raising the agricultural tariffs, though his poor political acumen was not able to convince congress of his plan, and his tariff ideas failed in Congress.

Fact:  Hoover granted further rights to Native Americans, preserving national forests, and developing massive construction projects.

Let's recall the words of Josh Marshall, a PROGRESSIVE and contributor at the PROGRESSIVE Talking Points Memo:

"Hoover was part of the 1912 Progressive party and he was in key respects a Republican Progressive in the early 20th century meaning of the term -- which is to say he was a technocrat who believed in scientific management and things like that. It is also true that as the Depression deepened Hoover did take steps in the direction of government intervention in the economy...The straw-man version of Hoover's presidency, in which he sat back and did nothing for four years, waiting on the market to correct itself is a caricature."

 

 Hoover In His Own Words

“We might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic. We put it into action...”

- Herbert Hoover, 11 August 1932

   

“No government in Washington has hitherto considered that it held so broad a responsibility for leadership in such times. . . . For the first time in the history of depression, dividends, profits, and the cost of living, have been reduced before wages have suffered.”

- Herbert Hoover, 11 August 1932

“Some of the reactionary economists urged that we should allow the liquidation to take its course until we had found bottom...

We determined that we would not follow the advice of the bitter-end liquidationists and see the whole body of debtors of the United States brought to bankruptcy and the savings of our people brought to destruction.”

- Herbert Hoover, 4 October 1932

“They were maintained until the cost of living had decreased and the profits had practically vanished. They are now the highest real wages in the world.”

-Herbert Hoover, 5 November 1932

"Creating new jobs and giving to the whole system a new breath of life; nothing has ever been devised in our history which has done more for . . . 'the common run of men and women.’”

- Herbert Hoover 22 October 1932

Franklin Delano Roosevelt And Barack Hussein Obama III

In 1938, there were still 10 million Americans of working age, who were unemployed.  Compare that to the eight million in 1931. Hundreds of millions of dollars spent resulting in higher unemployment.  Replace the "m" in "millions" with "tr" and the dark cloud of déjà vu should descend uncomfortably and enshroud you.

The truth of the matter is that it was not until FDR conscripted millions of men and sent them off to war did unemployment levels truly come down to manageable levels, which, however, was hardly the end of the Great Depression.  As everyone should know, unemployment was only one of the several components. 

Thus:

In terms of aggregate production, statistics show no recovery until after World War II ended, when the size of government was at long last reduced.

The gross national product (GNP) didn’t recover to 1929 levels until 1940.

Personal consumption was 8 per cent lower in 1940 than in 1929.

Net private investment, the backbone of a healthy economy, from 1930 to 1940 was negative $3.1 billion, a breathtaking figure.

Because of FDR’s mind-spinning interventionist policies, European nations came out of the Great Depression years ahead of America.

FDR believed that the Great Depression was caused by low wages. That was his fatal flaw. Because, in fact, the truth was the diametric opposite, as we now know: low wages (and prices) were caused by the depression.

And yet based upon this stupendous misunderstanding of basic economics, FDR proceeded to mandate wage and price controls, which thus kept the American people in a state of poverty for well over a decade.

When prices and wages are forced by government, the demand for labour is necessarily reduced. Why? Because in order to stay in business, businesses must turn a profit; so that when wages and prices are forced, businesses must adjust their employment and spending accordingly, or they run out of money. They must therefore cut back on workforce, and they must decrease output. In this way, forced wages create unemployment. You see, not even politicians can subvert or defy the laws of economics.

This is the most basic cause and effect process you can imagine: employers simply cannot pay out money that they don’t have. Production and production alone generates wealth. 

That’s another crux, and FDR’s interventionist policies crippled production.

By means of the National Industrial Relations Act (NIRA), FDR’s First New Deal sought to turn United States agriculture, and other industries, into a massive government cartel.

“The Fascist Principles are very similar to those we have been evolving here in America.”

 - National Recovery Administration

It was at this time also that FDR began restricting production, so that unemployment began increasing.

The NIRA failed spectacularly, but in the process, it gave birth to another disaster: the National Recovery Administration (NRA).

"Those who are not with us are against us.”

- NRA motto coined by its head, Hugh Johnson

The NRA was bureaucratic up to the gills, and, among other things, it required every businessperson to sign a pledge to observe FDR’s job-destroying minimum-wage laws, his maximum-hour laws, and his prohibitions on “child labour” (i.e. teenage labour), and so on.

Prices were therefore not permitted to rise above or fall below “costs of production,” regardless of consumer demand.

Quoting historian John T. Flynn:

"[Code-enforcement police] roamed through the garment district like storm troopers. They could enter a man’s factory, send him out, line up his employees, subject them to minute interrogation, take over his books at the instant. Night work was forbidden. Flying squadrons of these private coat-and-suit police went through the district at night, battering down doors with axes looking for men who were committing the crime of sewing together a pair of pants at night."

- John T. Flynn, The Roosevelt Myth, 2007

Countless people across America were arrested and sentenced to jail or prison for invented crimes like “pressing suits of clothes for thirty-five cents when the Tailors’ Code fixed the price at forty cents.."

FDR also made the private ownership of gold illegal.

"[Mussolini is an] “admirable gentleman” and [I 
am] “deeply impressed by what he has accomplished.” 
 - Franklin Delano Roosevelt

He nationalised gold stocks.

He created an abortion called the Agriculture Adjustment Administration (AAA), which implemented a government cartel on agriculture markets, and which quite literally paid millions and millions of dollars to farmers for slaughtering their livestock and burning their fields, while the rest of the country starved.

"Reminiscent of Fascism is the principle that the state no longer leaves the economy to its own devices.…Without question, the mood accompanying this sea change resembles that of Fascism.” 
- Benito Mussolini on Roosevelt, Looking Forward

Under the AAA, which was later declared unconstitutional, one sugar refining business was paid $1 million to not refine sugar.

He made null and void all existing contracts that promised to pay in gold, which was an act of pure and simple theft, and which in any case did not inflate prices, as was his whole intention in making gold illegal in the first place.

In 1935, the United States Supreme Court ruled that Roosevelt’s NRA and AAA were unconstitutional.

It’s worth noting also, if only for posterity sake, that the NRA and the AAA were both explicitly modeled after Mussolini’s fascist system, of which FDR was an explicit admirer.

FDR also emulated Mussolini’s propaganda campaign against freedom and free-markets.

“Fascist means to gain liberal ends.”

- Robert Shaw, Progressive writer, North American Review, 1934

Under the Second New Deal, Roosevelt’s AAA, which the Supreme Court had declared unconstitutional, was, however, resurrected under the “soil conservation programme.”

It too paid taxpayer money to farmers for not producing.

A number of other programmes that the Supreme Court ruled unconstitutional were simply reenacted by FDR under different names as well. 

Many of these unconstitutional programmes, also modeled after European fascism, are still in place today.

The Second New Deal, announced on 4 January 1935, introduced a number of new programmes, in addition to the renamed old, each one equally unconstitutional, though never, alas, brought before the court. 

“Roosevelt’s adoption of National Socialist strains of thought in his economic and social policies...the development toward an authoritarian state based on the demand that collective good be put before individual self-interest.”

- Nazi newspaper, Volkischer Beobachter, praising Roosevelt

There was, for instance, the National Labour Relations Act.

There was the Fair Labour Standards Act, which amounted to more job-destroying minimum-wage laws.

There was the Works Progress Administration.

Of course too there was the egregious and now bankrupted Social Security Act, which, among other things, forgot to take into account increasing life expectancies, and so was doomed to fail from the start, a fact which, unfortunately, most Americans don’t realize even today. 

“If we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good. I assume unhesitatingly the leadership of this great army.…I shall ask the Congress for the one remaining instrument to meet the crisis—broad executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.”

 - President Franklin Delano Roosevelt

Also, the Norris-LaGuardia Act, which Herbert Hoover made into law in 1932, was much more stringently enforced under FDR’s authoritarian hand, thereby making it impossible to prosecute against labour union violence, of which the whole history of labour unions is largely composed.

Extortion by unions was under FDR legally permitted, as long as that extortion concerned “the payment of wages by a bona fide employer to a bona fide employee” (Congressional Record 78th Congress, first Session, House, 1934).

There were in addition, of course, the interminable taxes imposed upon businesspeople, which taxes siphoned money out of the private sector and increased unemployment, as taxes against entrepreneurs always and inevitably will, since they take away the capital that is normally used to reinvest and thus produce.

Indeed, tax increases (much of which were used to pay FDR’s bureaucrats) were as responsible as anything else for annihilating the American economy.

Quoting FDR’s adviser Harry Hopkins:

“I’ve got four million at work [in federally created jobs], but for God’s sake, don’t ask me what they are doing.”

This same Harry Hopkins again: 

“We shall tax and tax, spend and spend, and elect and elect.”

Even prior to World War II, government spending under FDR doubled and then some.

Government spending went from $4.6 billion in 1932 to $9.1 billion in 1940.

Over $23 billion in deficits were accumulated.

Current profligacy makes these numbers look comical, and indeed in terms of sheer profligacy, Barack cannot be matched; but one must not fail to take into account the times.  On his watch, the United States has lost its stellar AAA credit rate and public debt now exceeds 100% - a 59% increase since Obama took office and said public debt now exceeds $10 trillion dollars.

Deficits annually during FDR’s reign averaged 42 per cent of the federal budget, a truly incredible figure, especially considering that in 1932 FDR had the nerve to campaign against budget deficits, and he even vociferously denounced them.

The primary purpose of FDR’s preposterous New Deal spending – at least, according to many – was simply to ensure his reelection, because he, like his protégé, was another power-mad politician. Accordingly, he gave free money to hoards and hoards of poor people in exchange for the vote.

What follows is from the Official Report of the U.S. Senate Committee on Campaign Expenditures, 1938:

• In one Works Progress Administration (WPA) district in Kentucky, 349 WPA employees were put to work preparing forms listing the electoral preferences of every employee on work relief. Many of those who stated that they did not intend to vote for Roosevelt were laid off.

• In another Kentucky WPA district, government workers were required, as a condition of employment, to pledge to vote for the senior senator from Kentucky, who was an FDR supporter. If they refused, they were thrown off the relief rolls.

• Republicans in Kentucky were told that they would have to change party affiliations if they wanted to keep their WPA jobs.

• Letters were sent out to WPA employees in Kentucky instructing them to donate 2 per cent of their salaries to the Roosevelt campaign if they wanted to keep their jobs.

• In Pennsylvania, businessmen who leased trucks to the WPA were solicited for $100 campaign contributions.

• As in Kentucky, Pennsylvania WPA workers were told to change their party affiliation if they wanted to keep their jobs. Many people refused and were fired.

• Government employment was increased dramatically right before the elections. In Pennsylvania, “employment cards” were distributed that entitled holders of the cards to “two to four weeks of employment around election time.”

• A Pennsylvania man who had been given a $60.50-per-month white-collar job was transferred to a pick-axe job in a limestone quarry after refusing to change his voter registration from Republican to Democrat.

• Tennessee WPA workers were also instructed to contribute 2 per cent of their salaries to the Democratic Party as a condition of employment.

• In one congressional district in Cook County, Illinois, the WPA instructed 450 of its employees to canvass for (Democratic) votes around election time in 1938. The men were all laid off the day after the election. 

(Cited in John T. Flynn, The Roosevelt Myth, and How Capitalism Saved America, by Thomas Dilorenzo.) 

In the words of historian Stanley High: 

“In states like Florida and Kentucky – where the New Deal’s big fight was in the primary elections – the rise of WPA employment has hurried along in order to synchronize with the primaries.”

- Stanley High, “The WPA: Politicians’ Playground,” Current History, 1939

In 1969, when all this evidence about New Deal spending came into the light, FDR apologists (i.e. academics) immediately began making excuses and rationalising FDR’s disgustingly biased spending – for instance, the fact that residents of western states received 60 per cent more federal money than residents of southern states. All the excuses these academics have made are factually inaccurate and have been refuted, many times over, by people like Jim F. Couch and William F. Shugart, in their excellent book Political Economy of the New Deal.

Franklin Roosevelt was, to quote one David Gordon:

“...a vain, intellectually shallow person whose principal interest was to retain at all costs his personal power” – i.e. “total subordination of his country’s welfare to his personal ambition.” 

- David Gordon, “Power Mad,” 1999

  
FDR had no grasp of economics, and in fact was really just another garden-variety politician, much like today’s world leaders, but more so.

"Remember well that attitude and method --the way we do things, not just the way we say things—is nearly always the measure of one's sincerity."

 - Franklin Delano Roosevelt, Butte, Montana, 19 September 1932

Paul Warburg, one-time ardent Roosevelt supporter, admirer, and friend, 31 August 1935:

"We have come to the point where we must appraise Franklin D. Roosevelt by his own standard, for it is only upon a judgment so arrived at that we can intelligently decide whether to be for him or against him...I am against him, and the purpose of this book, Hell Bent for Election,  is to tell you why.

There would be no reason to do this were it not for the very definite hope that my feelings may find an echo and my reasoning a response among those who share in the ever growing realization throughout the country that we are on the brink of a momentous decision."

Warburg also wrote a sequel in 1936, Still Hell Bent.

President Franklin Delano Roosevelt's economic theories, practises and programmes have been weighed by history, they have been measured, and they have been found wanting. In what world could the economic theories, practises and programmes of President Franklin Delano Roosevelt possibly beat the Austrian School of Economics and its triumphs as proven by Presidents Harding and Coolidge?

Which depression lasted 18 months and which lasted 18 years - the Depression of the Early 1920s or the Great Depression? 

Continue in Part IV.