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June 30, 2010

FDR's Folly

How Roosevelt and his New Deal Prolonged the Great Depression
Jim Powell - ISBN - 9781400054770

With the current administration this title becomes immensely relevant. All should read it; especially those on the left. The author begins with a memorable observation:

"It is remarkable [that] respected historians, writing about the most important economic event of 20th century American history, could disregard [all of the] economic literature which challenges their vision. . . . I believe the evidence is overwhelming that the Great Depression as we know it was avoidable."

He then follows up with Walter Lippman [a prominent, skeptical, moderate-left intellectual and newspaper columnist of the era] who opined that "New Deal reformers would rather not have recovery if the revival of private initiative means a resumption of private control in the management of corporate business."

Powell then opens this barnburner; brilliant, succinct, accurate and devastating. It is a deft rendering of FDR's plans and efforts to control, while obfuscating with bald faced lies . . . delivered with a smile. White House conversations often graduated to discussions of "how can we sell this to the public?" He meticulously debunks arguments presented by acolytes. It is a vigorous testament to the folly of anyone convinced that a government committee can somehow improve on "market forces."

New Dealers undertook to compare actual capitalism with idealizedgovernment and their own Utopian goals. Officials were certain that those serving the public interest were more pure than capitalists serving their private interest, and that the economy could be vastly improved upon by establishing bureaucracies and issuing commands. Never was it considered that more power might magnify the harm done by human error or corruption. But of course these sagacious public servants never erred, and corruption was a fault limited to capitalists.

He writes brief chapters with titles identifying what he plans to dismember:
• Why Was So Much New Deal Relief and Public Works Money Channeled Away from the Poorest People? (most notably black folks)
• Why did New Dealers Make Everything Cost More in the Depression?
• Why Did the New Dealers Destroy All That Food When People Were Hungry?

He asks not how, but why. Roosevelt is exposed for intentionally attacking capitalism to establish a progressive government responsible "for" the people rather than "to" them. It was all about governmental power. Few in his administration were well intentioned; fewer still understood economics. The authors of most of the programs were progressives, ill intended from the outset. They ardently pursued their goals, consequences be damned. (Sound familiar?)

Later he deals with
• How Did Social Security Contribute to Higher Unemployment?
• How Did FDR's Supreme Court Subvert Individual Liberty?
• How Did the Tennessee Valley Authority Depress the Tennessee Economy?

These mentions include but a few of the brief chapters in which he "smart-bombs" the New Deal, demonstrating that its policies were clearly deleterious to America's welfare, yet were continued despite their harmful fallout.

Much of the programming was conceived as symbolically important; gestures meant to confirm their noble intent. The left is always most concerned with image as it attempts good things; yet anyone who disagrees is thought to be insensitive, racist, greedy, stupid or worse. And, of course, facts and actual outcomes don't matter; only good intentions. Most of the New Dealers were lawyers, and few amongst them had any real world experience. Being arrogant and inexperienced they were certain that their superior intellect, when combined with political power, would facilitate their therapeutic plans for the world. They were convinced that by issuing executive orders, passing laws, raising taxes, and redistributing money, they could vastly improve society. FDR issued more executive orders than all subsequent presidents; more in a dozen years than did everyone else in the next 63!

This could have been just a diatribe on FDR (who deserves it), but it is not. Powell is clear, straightforward, and discusses not an agenda but how the New Deal was promulgated and why it failed. One will find more than a few comparables to the Obama administration--no surprise since they sing from the same hymnal! Obama has probably done more damage in 15 months than did Roosevelt in 13 years, but America is a very different place now, in considerable measure because of FDR, not to overlook LBJ.

Roosevelt was not a bad man, and did some necessary and honorable things in pursuit of the war against fascism, but his economic program was a disaster (and, itself fascistic), and set the stage for many of our current systemic problems. This little monograph puts to rest, forever, the debate over the New Deal. It was disastrous for the country.

In a better world the book would be required reading for all voters.

Posted by Curmudgeon at June 30, 2010 2:08 PM