Franklin Delano Roosevelt is, along with
Abraham Lincoln,
one of Barack Obama’s heroes, as Barack Obama is among the first to
point out. Accordingly, Obama is pursuing a number of the same
disastrous economic policies that Franklin Roosevelt pursued, which
policies only served to keep the United States depressed for years.
Yes, the truth about Franklin Delano Roosevelt, which people on both
sides of the political spectrum hate to hear, is that he not only did not bring this country out of the Great Depression: he prolonged it for well over a decade.
By the time FDR’s reign of destruction was through, the United States was still
in a deep depression, and the interventionist precedents he
established, which served only to keep the country depressed, haunts
America to this very day.
Never again, until Barack, has an American president so brazenly and
so consistently demonstrated this lack of regard for individual human
beings; and never since Barack has a president stomped so savagely upon
the unalienable right to life and property.
Franklin Roosevelt died on April 12, 1945.
It was not until 1947, when wartime controls and government spending
finally ended and free markets were at last allowed to operate somewhat
freely – i.e. without the stranglehold of the federal government – that
this country at last began to emerge from its eighteen-year depression.
That depression was much exacerbated by the interventionist Herbert
Hoover, but Franklin Delano Roosevelt took interventionism to a whole
new level.
Quoting FDR’s own economic adviser, Rexford Tugwell:
“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, 1946).
One of FDR’s first acts as President was to close down all banks, a
maneuver he hoped would prevent scared depositors from withdrawing their
savings.
What this maneuver actually did, however, was intensify the public’s
panic. It didn’t improve banking at all, nor did it help in any way with
the Great Depression.
Unemployment rates over the course of the Great Depression looked like this:
• 1929: 3.2 percent
• 1930: 8.7 percent
• 1931: 15.9 percent
• 1932: 23.6 percent
• 1933: 24.9 percent
• 1934: 21.7 percent
• 1935: 20.1 percent
• 1936: 16.9 percent
• 1937: 14.3 percent
• 1938: 19.0 percent
• 1939: 17.2 percent
• 1940: 14.6 percent
FDR averaged 17.7 percent unemployment, which is staggering: to be
more precise, FDR’s unemployment average was more than five times the
1929 level.
Many
FDR apologists like to
cite the 1933 to 1940 drop in unemployment as the greatest drop,
percentage-wise, in the unemployment rate ever by an American President.
Of course, what this fails to take into account, among a litany of
other things, is the fact that centralized banking, as opposed to
privatized, through the artificial manipulation of interest rates,
caused the problems to begin with, and the subsequent interventions,
first by Herbert Hoover and then by FDR, exploded those problems
astronomically, as testified by the unprecedented unemployment rates
that decade saw: in other words, 14 percent unemployment, is, by any
legitimate standard, ghastly, and only a lunatic or a fool would call it
“a success.”
Quoting economists Richard Vedder and Lowell Gallaway, who used statistical models to evaluate the results of FDR’s New Deal:
“The Great Depression was very significantly prolonged in both its
duration and its magnitude by the impacts of New Deal programs.”
As Ludwig von Mises correctly noted, in the absence of government intervention, unemployment is always voluntary. Yet over ten million Americans were unemployed in 1938.
Compare that to the eight million in 1931.
Fact: 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; for unemployment,
as everyone knows, is only one of 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 percent 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 labor
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 FDR can subvert economic law.
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.
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).
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 labor” (i.e. teenage labor), 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”
(Ibid).
FDR also made the private ownership of gold illegal.
He nationalized 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.
Under the AAA, 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. Under the Second New Deal, Roosevelt’s AAA, which the
Supreme Court had declared unconstitutional, was, however, resurrected
under the “soil conservation program.”
It too paid taxpayer money to farmers for not producing.
A number of other programs that the Supreme Court ruled
unconstitutional were simply reenacted by FDR under different names as
well.
Many of these unconstitutional programs, also modeled after European fascism, are still in place today.
The Second New Deal, announced on January 4, 1935, introduced a
number of new programs, in addition to the renamed old, each one equally
unconstitutional, though never, alas, brought before the court.
There was, for instance, the National Labor Relations Act.
There was the Fair Labor 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.
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 labor union
violence, of which the whole history of labor 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.
Deficits annually during FDR’s reign averaged 42 percent 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 percent 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 percent
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 rationalizing
FDR’s disgustingly biased spending – for instance, the fact that
residents of western states received 60 percent 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.
