Beltway Bozos: FDR's New Deal Made Great Depression Worse
By Susie Madrak Sunday Dec 28, 2008 11:00amOh, to live in that happy place where Fox News resides: where the sun shone out of Ronald Reagan's behind, and FDR, not Hitler, was the real villain of his time...
After Wise Men Mort Kondracke and Fred Barnes pull their chin hairs and speak in somber tones about how Obama's economic stimulus package will actually hurt the economy - just like FDR's New Deal did - they wax rhapsodic over Reaganomics. (After tsk-tsking about unions quite possibly wrecking the economy under Obama, of course.)
I, too, have fond memories of Reaganomics. Why, until Reagan waved his magic wand, our unemployment checks weren't even taxed! I was absolutely thrilled to be able to make that sacrifice to fund tax cuts for the wealthy:
Another Reagan proposal that came in for criticism was the plan to tax all unemployment compensation.
[...] "What he's doing is taxing something to a person who is under a rough time to begin with," noted Herbert Paul, a New York tax lawyer. "But you don't seem to have a strong lobby group to push to eliminate that, so I think it may well stick."
And stick it did. Why, thanks to Reagan's Tax Reform Act of 1986, I only recently finished paying the taxes (and interest) due on unemployment income from 2001 - and here I am, unemployed again, thanks to yet another Republican-sponsored economic crash.
But I digress. The fact is, facts simply aren't relevant to Republicans, since their economic views and objects of veneration are more appropriate to a religious cult than intellectual rigor. (You might want to get Will Bunch's new book for a look at this phenomena - and why it's so important.)
I'm not going to pick apart the specifics of everything Morton Kondracke and Fred Barnes said, because they're only interchangeable players in the larger conservative game plan. We've seen just about every possible Republican bobblehead spouting this same nonsense in the past few weeks, fresh off the RNC talking-points fax machine.
Yes, faced with a massive worldwide economic crisis that threatens our entire society, the GOP response is ... to manufacture a meme attacking the only policies that can possibly fix things. They are more than willing to throw the country under the policy bus if it means they can lay the foundation for a political comeback.
"Yeah, yeah, you people are out of work and companies are collapsing. But what about our needs?"
Republicans are so used to cynically gaming the system, it doesn't even occur to them that the obvious path to political rehabilitation is to put the country's interests ahead of their own. But then, no one ever said True Believers were logical.
New York Times economic writer Daniel Gross debunks the wingnut mythology here:
It was only with the passage of New Deal efforts--the SEC, the FDIC, the FSLIC--that the mechanisms of private capital began to kick back into gear. Don't take it from me. Take it from Federal Reserve Chairman Ben Bernanke, who wrote the following in Essays on the Great Depression: "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression."...
The argument that the New Deal's efforts "perhaps had prolonged, the Depression," is a canard. One would be very hard-pressed to find a serious professional historian--I mean a serious historian, not a think-tank wanker, not an economist, not a journalist--who believes that the New Deal prolonged the Depression. (emphasis added)
It galls them that there's simply no factual way to argue that Republicans are good for the economy - so they simply make things up.
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The utter and COMPLETE stupidity of Fox News is jaw dropping. I bet this year they convince the Freepers there is no sun.
Rush Limpballs is pedalling this crap. He has been saying not only did FDR's New Deal extend the Great Depression; he has been saying that FDR's economic policies were put into place in order to extend the power of Democrats.
And now people such as those idiots at Fox News are spreading this nonsense.
If they couldn't beat Obama, just start smearing him in any way, shape, and form, including listening to Limpballs.
Fox viewers should be insulted that people like Barnes think they are so freakin' stupid that they will believe a rewrite of history.
to start the psychological processes necessary to understand they should be insulted.
I never watch these self centered jackasses or any of their psychotic colleagues (except KO and Rachel). Who on earth needs to listen to their toxic drivel anyway? It's like having a bunch of stinking turds floating in the river of our national discourse. These egocentric imbicles need to get connected with reality instead of making up fictional versions of it.
it's time the rich reich elite lose
all their loopholes in the tax laws
and pay like the rest of us. this
also goes for all those companies
doing business in the USA and hiding
their corporate offices and profits
offshore or in other countries.
you do business in the USA and make
money, and i don't mean the cooked books
profits, you pay taxes do get the fuck out
of the country. the American public
is not a free ride for corporate criminals.
Can we just hang signs around their necks that say "I'M STUPID" already?
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What about one of those pointing hand t-shirts that read "i'm with stupid"
Do not let this falsehood be repeated without denying it.
The first part of the New Deal worked and then the budget fools convinced FDR to increase taxes and balance the budget. That brought the economy down, pure and simple. Once he corrected that error, the economy started building up again.
Do not let them repeat falsehoods like this. History does record the truth and not the false interpretations and distortions of fools.
the new deal was evil
reagan was a saint
Krugman makes this same argument. He has a column where he covers this and encourages Obama not to repeat FDR's mistake of interrupting his own recovery lest his also then falters.
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I recall overhearing my parents argue back in the 60's that Roosevelt's economic efforts did no good at all: it was ALL the WWII. That was said by a supporter of Viet Nam, who thought war was good economics.
But the problem is that then we have an economy - like we have now - where war is the ONLY economic program we have and the rest of the country slides into crippling decline.
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Another big difference is back then products weren't so specialized so car and truck manufacturers could easily turn around and start producing military trucks and such, thus creating work, the item gets blown up, so they have to make more. Then when the war is over they just go back to what they did before.
You also had a huge chunk of the American populace no longer looking for work, because they were fighting overseas, while at the homefront Rosie the Riveter was picking up the slack working at the factories. With the war over they somehow got Rosie back into her kitchen, and introduced things like the GI Bill to help soldiers get ready for peacetime, and more profitable employment. Our industries also faced little or no competition because the European industries were so blasted by the war. We would have no real competition until the early 70's when Japan rose up with a newer infrastructure, and OPEC caused oil shortages.
Things like industries fast turn around, committing such huge forces, and getting women back home don't sound repeatable.
my parents revered roosevelt
my dad and mom made sure to show me every building and public work that was created during the new deal
i attended jr high in a school built during the new deal...a building that stands till today
i swam and played in a pool and park built during the new deal
wingnuts like to use one quote from roosevelt's treasury sec to prove that the new deal was a failure....one guy, one quote
we need to start making things again
we need to invest in our future (college and training centers for all)
we need to move away from the idea that greed and consumption are good
The New Deal did not end the depression and neither did WWII. Well, the only way WWII helped our economy was by ending. After it, what was left was a bunch of brand new factories and any countries that would be our competitors left in ruins. If this is how WWII saved the economy, then let's not try to save it that way again.
Until 1936 he had the Supreme Court overturning everything he tried to do as unconstitutional.
Republicans in Congress were also opposing him, as well as old money types in his own party. Scads of editorial writers were against him.
He also developed a trickle-down theory that he called priming the pump with businesses, while extending relief to those who needed it. He also helped set up the safe guards like the Glass-Steagal act.
What really worsened the Depression was not his overturned attempts but primarily business decisions and their Congressional helpers who passed punitive tariffs, and protectionism policies that idled supply shipments throughout the world, as they responded with protectionists policies of their own.
"Oh, to live in that happy place where Fox News resides: where the sun shone out of Ronald Reagan's behind ..."
In reality that light was not the sun, but instead only a blue flame.
Even though I understand that there (evidently) isn't any level below which these Fox "news" (and fellow travelers) will sink, I continue to be amazed at the utter stupidity of their constant yammering.
So Hey Mortie, Freddie, and the rest of you dumb shit right-wingers, prove you can read:
The country is in serious trouble, a fact that you have obviously missed. Accordingly, we are in desperate need of intelligent voices, people who are capable of offering plausible solutions to the horrifyingly complex problems that we face as a nation. And although it might sound like a cliche at this point, the fact remains: If you're not part of the solution, then you're part of the problem. So either start offering something more than your usual drivel, or please shut the fuck up.
why do we continue tuning in to these puppets?
it is obvious they are simply propaganda parrots.
where is my america?
was achieved by manufacturing goods the world wanted. That is impossible now. The rest of the world manufactures this stuff all cheaper. Everything necessary has been created. There are no war riddled economies that need goods they can't make themselves cheaper.
It never ceases to amaze me, when politicians amongst others including big corporations, beg people to "shop American" (or whatever nation you live in) when even they don't and that's the problem. Let's all support GM cuz they are a national American company. So buy the new _____. Then you'll find out it was made in Mexico or China. Hell you can't even subsidize these corporations back into the country. They aren't interested. Cheaper to have a little Chinese girl make those Reeboks and sell them to you at 4000X the price.
I guess I rambled a bit. But you notice that they fault FDR's attempt to alleviate the suffering, but not his own trickle-down efforts. Additionally, as today financial situation shows, if you only feed the top, that means they might start producing again (if they don't pocket it as CEO pay and benefits), but with no market to sell it to, if government money isn't slipped in lower down on the chain.
Infastructure spending and bailing out industries will do nothing to alleviate anything if people can't buy. Even Krugman says the problem came from too much credit and people/businesses not affording to pay back. How does borrowing more change anything? How does throwing borrowed tax dollars at banks change anything? How does giving the Big 3 billions change anything, when nobody is buying their products? It won't. What's the government going to do? Borrow trillions to hire their own taxpayers to work for them? That will do nothing to bring any nation out of a recession. Honestly, I don't get this. If they are just going to borrow trillions, then do it, and just give it/loan it to anyone earning less than a set amount per year. They will spend it on the necessities.
Would this help inflation?
http://cdn.overstock.com/images/products/0/48...
do more than a bailout of a bank would!!
Was a livable minimum wage and incentives for small businesses to hire workers.
It was 'trickle up' not 'trickle down' that jump started the moribund 1932 onwards economy.
The last 4 presidents have been 1 democrat and 3 republicans. the only time there wasn't a deficit was when he democrat was in charge.
one plus one still equals two doesn't it?
Since these asshats lie about current events, why the surprise when they lie about history?
they have lost their damn minds.
i may be wrong, but i also believe reagan changed the ability to itemize most medical expenses to the total had to be a percentage of income.
he had to pay for his tax cuts somehow. republicans crow about the tax cuts but the media and gop both ignore the losses of deductibles we lose to pay for those cuts.
You could write off installment loan interest, remember that?
That's all it takes. Give a person a job. The rest will take place. No jobs, then no tax generating, no good consumers, no economy. Probably anarchy. We don't want that. Do we?
Since when this dumb ass is an economist?
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are the one who lengthened the depression. The economy was improving until they put pressure on FDR to cut spending. Because FDR listened to them and cut spending we got the recession in 1937 which took a couple more years to recover from. So just like today it's republican policies that screwed up our economy then too. Nothing changs.
The V-shaped recovery during the FDR/Democratic Congress years starting in 1933 vs the Hoover/Republican Congress years is sharp, clear, dramatic and impervious to assaults by revisionsist Republican historians like those crawling out of the woodwork today.
Look at ANY chart provided by BLS, for instance, comparing those years on jobs creation, falling unemployment numbers, increases in GDP and declining national debt and the improvements under FDR and his policies are OBVIOUS and inarguable.
The only year where we fell into a flat patch and a brief, relatively shallow recession was in 1938. Naturally, the Republican revisionist historians cherry-pick THAT ONE YEAR to make their case that there were "little or no improvements in the economy since 1933". Bullshit.
By 1939 the rising numbers of improvement under FDR continued in earnest and his economy DID NOT NEED WWII in order to pull us out of The Great Depression. That is a popular Republican lie that even some Democrats will fall for during a weak moment.
The economy was recovering just fine under FDR's policies YEARS BEFORE we entered WWII. In fact, if anything, our involvement in WWII STIFLED the improvements we were already seeing in jobs creation, GDP, reduction of debt, investment in U.S. business and gains in the stock market.
The end of The Great Depression, economically, was merely COINCIDENTAL to our involvement in WWII. The best and possibly the ONLY argument that can be made for WWII "ending" The Great Depression was in the way it ended an emotional, national depression and ushered in more optimism when the War was finally over and...BECAUSE the War was finally over.
In 1929, the Gross National Product was $103.1 billion (figures not adjusted for inflation). By 1933, that had fallen to $56.6 billion. Using a multiplier of 3.5 (a standard Economic assumption)< FDR would have needed to spend an additional $13.7 billion a year to bring the economy back up to where it had been when Hoover took office. The highest total Federal spending ever got before the war forced FDR to cross the line was $8 billion--and that includes the core spending that had always been there.
The logic these people like Barnes and Kondracke use is that if the doctor tells them to take 4 pills a day and they only take 3 a week and don't improve, the pills must be bad.
Fox should thank its lucky stars that I am not the president. I would order the FCC to suspend their broadcast and broadband licenses, pending investigations into their many failures to discharge their obligations and duties to inform the American public. Then, I'd spend about 6 years putting together a team of investigators.
In the meantime, I'd direct the FCC to reinstate the Fairness Doctrine and the DoJ to initiate anti-trust actions against the cartel formed by the 5 corporations and 3 principal radio broadcast corporations, for abuses of de facto monopoly powers. By the time it was over, there would be major divestiture actions going on.
And while all that was ongoing, I would direct the FCC to review/revise all of its regulations to ensure that the American public, and not a bunch of mega-corporations hellbent on establishing a fascist government in this country, were put first at all times and under all circumstances. If the corporations in questions didn't clean up their acts with a quickness, I would add trillions of dollars of licensing surcharges to what it already cost them to maintain those licenses. I would bring to bear the full weight of the government in order to compel them to become responsible corporate citizens, or put them out of business if they refused.
Democracy cannot survive without a free and independent press. These malign propagandists don't come even remotely close to qualifying as journalists. They've got to change or go.
And these two hacks still have jobs?
Reagan was a disaster as governor of California, and he was a disaster as president. I have been convinced for awhile now that they deal in self-delusion. They are like a stalker, who is convinced that the woman who's life he's making miserable, actually adores him.
First off, in the 80's they counted inflation right AND they counted unemployment right so its much worst today using the old numbers.
www.shadowstats.com (Here you can get real numbers using the old methods of counting inflation and unemployment)
High Interest rates actually brought down cost for those who are not in debt so things were better (81-87) if you didn't mortgage yourself to the hilt. (KEYNESIAN ECONOMICS IS A FRAUD BTW, its the reason we have all these bubbles) Now inflation is skyrocketing in electricity and food costs but we are in a liquidation period right now so the cost of a tv's come down but then again who cares about that. Reagan was a fraud and he sold America down the river, free trade is NOT free, it is managed trade that only helps the special interests (the Rich).
Recent bubbles have been the result of unregulated speculations not Keynesian economics which would try to create the regulatory structures to prevent bubbles.
The so called "Panics" (Depressions) of 1819, 1836, 1873 and 1893 and a short one around 1910 and then of course 1929 were all the results of unregulated speculation leading to spectacular economic collpases.
Inflation (Keynesian economics) is a fraud, inflation is stealing from everyone. We need Austrian economics.
Why the hell would a historian know more about economics than an economist? Why would a historian be able to determine what effects the New Deal had better than an economist? They wouldn't. But there are plenty of economists that say that the New Deal had the effect of prolonging the Depression. In fact the country was in a depression straight through WWII until 1947 or so.
I think those jag-offs are funny. Not too long ago they were saying, "There'll never be another depression. We're too smart now. Everything to so globalized. It's impossible".
I am afraid that what worked for FDR, might not work for BHO. Things are so different now, like we weren't in debt up to our ears to other countries back then, and we were producing our own oil.
Still, we really need to rebuild our infrastructure.
brilliant Post Susie,, sorry you are out of work..
When is there going to be a serious effort to expose Reagan for the mis-guided, dull-witted bozo (or is it Bonzo?) he really was? He did not do the average American any favors.
What the bobble heads are really saying is that we are in fact in a depression that is worse than The Great Depression and they have no more idea what to do about it then the clerk over at 7/11. But for the last year they said it was a ression that we will pull out of in a few months. Funny they changed their minds just before a new guy takes the reins of office.
Sure bud.. By doubling the size of the government and TAKING the money out of the private sector on top of MAKING the people of this country give up the gold they had under threat of prison, FDR damn sure DID extend the great depression.
One of these days people will understand that the market is much more powerful than the bandaid fixes government tries to place on it.
The only thing that a 'stimulus' package will do is make us further in debt. There is no way out of this recession, but leave it to big brother to sink us another trillion into debt. What happens if China dumps the dollar?
'It was only with the passage of New Deal efforts--the SEC, the FDIC, the FSLIC--that the mechanisms of private capital began to kick back into gear. Don't take it from me. Take it from Federal Reserve Chairman Ben Bernanke, who wrote the following in Essays on the Great Depression: "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression."...
Why the HELL WOULD ANYONE LISTEN TO BERNANKE?????? Last I looked he is the main culprit behind the inflation. Do you really believe that we can spend our way out of debt?? His only solution is to hit the printing press at full blast.
There are other theories. Sound money is one of them. Do some research on Austrian Economists (ya know.. the ones that predicted this mess from 1971 on) instead of Kenisian (sp) Economists that run the Fed, the media and the 90% of the colleges.
I suggest reading Mises and Rothbard.
The "poor corporations" having to deal with paperwork. Would be nice to know what a stock might be worth before you buy it. All it takes is massive corrections for the market to self regulate? All it takes is a wall for my car to brake? These two are intelligent idiots (is that the most dangerous kind?).
The real conservative meme is that boom/bust economic bubbles and all other human misery are no more caused by human activity than is global climate change. The "market" is a semi-divine, self-regulating entity that makes judgments like some dispassionate god. Any attempt to regulate it is doomed to upset the divine struggle for economic survival by which winners and losers are naturally selected. Of course, this is pure bullshit. It gives Darwin a bad name and is not believed for a moment by the very people who rig the markets and peddle this fiction to stupid Ann Rand types, most of whom barely have a pot to piss but hope to someday own a gold urinal.
Um no. "conservatives" would say that it is exactly human action that cause the boom/bust business cycle. It is when a central bank like the fed can arbitrarily decide interest rates for banks across the whole country. This leads to deliberate throttling of credit and the money supply. This leads to overspeculation and bubbles, which then burst when enough of that credit defaults, which is inevitable.
This is why Ron Paul and people like him say "End the Fed" because it is an engine of inflation and debt.
Yes, but conservatives will also say that the boom/bust bubbles are the nefarious work of liberals and wage earners who are paid too much. As for Ron Paul and other Libertarians, they're worse than conservatives because they actually believe all that invisible hand homo economicus mumbo jumbo and that economic utopia can exist without being your brothers keeper.
I was interested to find this blog. 20 years ago I had a book published on different economic concepts to point the way to a sustainable world economy. Someone who liked the book contacted me this year to suggest that I update and re-publish it as a blog. She set up the blog, and the book is now complete on the blog in a series of postings. There are now also additional pieces on global warming and other subjects. Here is the link:
http://www.economicsforaroundearth.com
With all good wishes,
Charles Pierce
http://newsroom.ucla.edu/portal/ucla/FDR-s-Po...
I agree. One would be hard pressed,, if he had his head firmly planted up his ass.
If you can manage to pull your head out for a second,, the above link is one of many articles you may want to read, just to get another perspective, which, I know, would be sacriledge when it comes to questioning FDR. And God forbid that you actually ask an economist about the depression. Below is the quote that I am referring to-
"One would be very hard-pressed to find a serious professional historian--I mean a serious historian, not a think-tank wanker, not an economist, not a journalist--who believes that the New Deal prolonged the Depression".
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