THE "NEW NEW DEAL"
March 12, 2009
Philosopher George Santayana is the one credited with what has come to be a very true, yet pithy observation: Those who do not remember the past are condemned to repeat it. There have been several variations to this quote including the very accurate phrase: "He who does not learn from the past is destined to repeat it." The statements vary, but have the same effect, viz. we must learn from the past!
Some past events are, for many people, worth repeating. Things such as a successful business venture, a great vacation, a family get-together, winning the lottery, etc. Who wouldn't want to repeat buying a winning lottery ticket? But every person who has lived through any catastrophe, loss of a job, death of a loved one, a fire that destroys a home, or an economic disaster, does not want to live through these things again! Unless, of course, they are brain-dead or evil! This being the case, I ask, is the Obama Administration brain-dead or just plain evil?
One can argue that the President, along with the liberal Democrats who hold the majority in Congress, are brain-dead. After all, ceaseless bailouts, deficit spending, raising taxes and the restructuring of the American society as a whole is rather careless and downright stupid. It is interesting to note that some in the Obama White House are not aware of the many programs and political decisions of the past which drove our country into chaotic times. Historical events of presidents like Franklin Roosevelt's New Deal and Lyndon Johnson's Great Society created a generation of people who have been hurt by laws and executive orders which radically changed tax codes, business ventures, lifestyles and person liberty. Many people became dependent on government instead of being free to pursue their own dreams.
In recent decades a good number of economists have questioned whether New Deal policies contributed to recovery or prolonged the depression. Many have pointed out that the most troubling issue with the New Deal was the persistence of high unemployment throughout F.D.R.'s first two terms. Richard K. Vedder and Lowell E. Gallaway in their book Out of Work: Unemployment and Government in Twentieth-Century America noted that from 1934 to 1940, the median annual unemployment rate was 17.2 percent. At no point during the 1930s did unemployment go below 14 percent! Even, in 1941, amidst the military buildup for World War II, 9.9 percent of American workers were unemployed.
Jim Powell in his landmark book on the failures of F.D.R.s New Deal has noted that in recent years scholarly investigators have raised some provocative questions. In FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression Powell detailed how New Dealers made it more expensive of business owners to hire people, how FDR's Justice Department filed over 150 lawsuits threatening big employers, how New Deal policies discouraged private investment and how because of that private employment failed to revive. He also points out how many of FDR's programs pushed up the cost of living, proved how New Dealers destroyed food while people went hungry, showed to what extent New Deal labor laws penalized blacks, and how the FDR Administration pushed to break up the strongest banks in the country. Two more issues Powell discusses are why didn't FDR's public works projects bring about recovery? and why was so much of the New Deal relief spending channeled away from the poorest people?
Stephen Moore with the Wall Street Journal editorial board, has pointed out that the greatest and most enduring economic myth of the 20th century is the idea that Roosevelt's New Deal pulled American out of the Great Depression. He notes that this fantasy is very prevalent today in that liberal Democratic leaders in Congress call for a "new" New Deal to lift the incomes of the middle class and shelter American workers from the anxieties attached to the competitive forces of a global economy.
We are now informed that free market ideas have become old-fashioned, outdated and irrelevant and what Americans need now are new government regulations, guard rails, and some 80 programs to correct the excesses of capitalism, such as the housing bubble.
Time Magazine, November 15, 2008 issue featured a cover picture of Barack Obama in FDR persona with the featured article centering in on the new President's appeal to many of the ideas of Roosevelt's New Deal. It is as if Obama wants a return to the era of FDR in dealing with this great recession which stands on the precipice of a Great Depression. But I would remind Mr. Obama of the famous testimony FDR's Treasury Secretary made to the House Ways and Means Committee in May, 1939:
We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises....I say after eight years of this Administration we have just as much unemployment as when we started....And an enormous debt to boot!
Here we are on the throws of another New Deal era! Congress and the Obama White House are wanting to spend, spend and spend - doubling the federal debt to nearly 23 trillion dollars by the end of his first term and there is no assurance that things will get better. In the days to come, I will compare and contrast FDR's New Deal and the state of the country in the 1930s to the programs and proposals of the current administration which, all hints point to, adds up to a "New" New Deal.
We believe that the Constitution of the United States speaks for itself. There is no need to rewrite, change or reinterpret it to suit the fancies of special interest groups or protected classes.