Imitating Failure
From AmericanThinker
Shortly after the end of World War I, the U.S. economy contracted sharply and fell into a recession. The federal government did not respond with a stimulus program, did not expand government spending, did not add government workers to the payroll. Rather than pursuing fiscal stimulus, President Harding reduced government expenditures, cut taxes, and did little else. The recession last about a year and gave way to a strong recovery.
The recession of 1920-1921 was the last time the federal government responded to economic crisis by essentially doing nothing. The ideological winds were shifting toward progressivism and toward the notion that a strong central government was needed to manage the business cycle.
Thus, when the economy began to contract following the stock market crash of 1929, President Hoover responded by sharply increasing federal spending and taxes and running a substantial budget deficit.
When Roosevelt assumed the presidency in 1933, the country had already been in depression for three years despite Hoover's interventions. Although he ran on a platform which sounded traditional (cut taxes and spending), once in office FDR went well beyond Hoover, launching an alphabet soup of new programs (NRA, AAA, WPA, CCC) which constituted an unprecedented insertion of the federal government into economic life.
Roosevelt's actions were bold and decisive. What's more, his use of radio -- the new technology of the era -- provided hope and even inspiration. He was re-elected thrice and historians, enamored as always of the strong executive, have been overwhelmingly supportive. The New Deal became the template for strong, compassionate leadership. Congress is now considering Obama's so-called stimulus bill, a "new" New Deal full of massive spending, based upon this conventional wisdom.
Amity Schlaes' excellent book The Forgotten Man brought significant attention to the failure of the New Deal to cure America's economic ills during the Depression. Now, another timely book has appeared, the culmination of ten years of research, which undertakes a meticulous analysis of the results of FDR's New Deal. In New Deal or Raw Deal? (Threshold Editions, 2008), Burton Folsom, Jr., a professor of history at Hillsdale College and senior historian at the Foundation for Economic Education, asks the decisive question: "But did it work?" The answer, to put it briefly, is "not really." Read the rest HERE
Shortly after the end of World War I, the U.S. economy contracted sharply and fell into a recession. The federal government did not respond with a stimulus program, did not expand government spending, did not add government workers to the payroll. Rather than pursuing fiscal stimulus, President Harding reduced government expenditures, cut taxes, and did little else. The recession last about a year and gave way to a strong recovery.
The recession of 1920-1921 was the last time the federal government responded to economic crisis by essentially doing nothing. The ideological winds were shifting toward progressivism and toward the notion that a strong central government was needed to manage the business cycle.
Thus, when the economy began to contract following the stock market crash of 1929, President Hoover responded by sharply increasing federal spending and taxes and running a substantial budget deficit.
When Roosevelt assumed the presidency in 1933, the country had already been in depression for three years despite Hoover's interventions. Although he ran on a platform which sounded traditional (cut taxes and spending), once in office FDR went well beyond Hoover, launching an alphabet soup of new programs (NRA, AAA, WPA, CCC) which constituted an unprecedented insertion of the federal government into economic life.
Roosevelt's actions were bold and decisive. What's more, his use of radio -- the new technology of the era -- provided hope and even inspiration. He was re-elected thrice and historians, enamored as always of the strong executive, have been overwhelmingly supportive. The New Deal became the template for strong, compassionate leadership. Congress is now considering Obama's so-called stimulus bill, a "new" New Deal full of massive spending, based upon this conventional wisdom.
Amity Schlaes' excellent book The Forgotten Man brought significant attention to the failure of the New Deal to cure America's economic ills during the Depression. Now, another timely book has appeared, the culmination of ten years of research, which undertakes a meticulous analysis of the results of FDR's New Deal. In New Deal or Raw Deal? (Threshold Editions, 2008), Burton Folsom, Jr., a professor of history at Hillsdale College and senior historian at the Foundation for Economic Education, asks the decisive question: "But did it work?" The answer, to put it briefly, is "not really." Read the rest HERE
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