Franklin Delano Roosevelt And Barack Obama

FDR
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.

Depression Before the Great Depression

Martin van Buren
The following is Chapter 21 of Leave Us Alone:

Before the Great Depression of the 1930’s and 1940’s, there were a number of depressions and recessions in this country, two of the most notable being the Panic of 1819 and the depression of 1837. In every instance prior to the Great Depression, the government policy was essentially a policy of hands-off.

Which was exactly as it should have been, since depressions are not caused by the private sector but by government interference in the marketplace, and only that.

What were the results of these hands-off policies prior to the Great Depression?

Answer: a drastic reduction in the amount of time the depression lasted.

Let us reiterate and emphasize that the only way to create wealth and jobs is through production.

That is why capitalism, true laissez-faire capitalism, is the only possible way to end an economic depression or recession.

Government spending will always compound problems. Why? Because government can only obtain money by taxing or borrowing or printing.

Always remember: government by definition is not an agency of production: it is a mechanism of force. That is its defining characteristic.

Thus the money that government takes away from the private sector depletes money that would otherwise have by choice (as opposed to by coercion) been saved or spent upon other things.

Private money, in other words, is diverted from the capital sector into the hands of bureaucrats. Which is exactly the thing that exacerbates and prolongs the preexisting economic problem.

It is so very easy to spend money that is not yours, money that you’re not fully accountable for, money that you obtain through force or the threat of force. Whereas, on the other hand, cutting governmental borrowing and spending and taxation and printing, it frees private money and private resources, which in the end is the one and only thing that can produce genuine wealth.

Printing more and more money to cover the cost of government spending will only ever bring inflation. It can happen in no other way.

Economic law cannot be abolished, just as mathematical law cannot be abolished, and for the exact same reasons. It doesn’t even matter how many politicians wish to abolish these economic laws, or how charismatic the masses find these bureaucrats: economic laws will not be subverted. One might just as well try turning back the tide with one’s own two hands.

Here, then, is how to end a recession or depression as swiftly as possible:

Slash government spending.

Slash taxes.

Stop the inflationary process that fiat money (i.e. money printing) inevitably brings.

Deregulate private enterprises so that the private sector can function – which is to say, free the market so that businesspeople can start up businesses, produce products, and create more and more jobs.

That’s all there is to it. And yet it’s a pill that bureaucrats simply cannot swallow.

The depression of 1837 was the biggest depression this country had seen prior to the Great Depression. The good President Martin Van Buren and his administration did exactly the right thing: they stepped back and let the market correct itself, which indeed it did, so that the depression lasted less than a year.

Martin Van Buren stated in his inaugural address that he advocated a policy of laissez faire.

Two months later, the United States experienced a banking crisis. President Van Buren stuck to his guns.

“All but six of the nation’s eight hundred or so banks had ceased redeeming their bank notes in gold or silver, but in his first message to Congress the President proclaimed that his policy would be one of governmental retrenchment” (Dr. Thomas Dilorenzo, How Capitalism Saved America, p. 158).

In President Van Buren’s own words:

“All communities are apt to look to government for too much, especially at periods of sudden embarrassment and distress…. All former attempts on the part of Government to assume management of domestic or foreign exchange have proved injurious.”

President Van Buren added that the solution is “a system founded on private interest, enterprise and competition, without the aid of legislative grants or regulations by law” (James D. Richardson, A Compilation of the Messages and Papers of the Presidents, New York: Bureau of National Literature, 1922).

It should be noted that Van Buren had to fight every step of the way against governmental intervention by such notable statists as Daniel Webster, Henry Clay, and the young Abraham Lincoln, all of whom remained statists until the day they died.

President Van Buren waged a tireless war for deregulation of finance, and he thereby created the Independent Treasury System in which all bank notes were redeemable in gold and silver.
In so doing, he brought this country the strongest and most stable monetary system it’s perhaps ever had.

President Van Buren also, in the words of historian Jeffrey Hummel, “thwarted all attempts to use economic depression as an excuse for expanding governments role.”

Conversely, interventionists like Henry Clay and his young protégé Abe Lincoln saw this economic downturn as a political opportunity to create pork-barrels for so-called internal improvements. Sound familiar?

These same statists also attempted to get the federal government to bail out the states, but President Van Buren fought them tooth-and-nail and eventually won; so that government spending actually fell during his term, and the debt remained steady, the free-market price system allowed to operate without intervention.

That is why the depression of 1837 lasted only one year.

That is why it never spun out of control, as today’s crisis has.

By refusing to pile up debt, President Van Buren thereby refused to drag out the economic downturn, which by necessity steals money from the private sector.

Compare that to, in the next chapter, the brief but by-no-means exhaustive list of extraordinarily destructive policies followed first by Herbert Hoover, who was an admirer of Soviet Russia and “believed that human manipulation could triumph over any alleged ‘laws’ of economics,” and then the even more brutal Franklin Delano Roosevelt, a discussion of whom will come in the chapter after the next.