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If Obama is the next FDR, America is screwed

William Rees-Mogg wonders, in his Times (of London) column today, whether Barack Obama has it in him to be the next FDR. I sincerely hope not. Let us consider the following data on unemployment rates during the 1930s:

1930: 8.7%
1931: 15.9%
1932: 23.6%
1933: 24.9%
1934: 21.7%
1935: 20.1.%
1936:16.9%
1937:14.3%
1938:19%
1939:17.2%
1940:14.6%

(Source: US Department of Commerce, Historical Statistics of the United States, as quoted by Thomas J. Lorenzo, in “How Capitalism Saved America, page 180-181),

With a set of figures like that, perhaps it is no wonder that hagiographers of FDR prefer to focus more on his record as a war leader these days. If Obama does share any of FDR’s traits for sheer deviousness on the economic front, we have trouble on our hands.

It is amazing how certain myths persist. Back in the early 1980s, when I was doing my history A-levels, one of my teachers gave me the whole ‘heroic’ portrait of FDR. I suspect this is still the default position of most history textbooks today.

43 comments to If Obama is the next FDR, America is screwed

  • Robin Goodfellow

    Simply put, if the war had not concentrated the interested of the nation and buoyed the US economy FDR’s presidency would have been remembered as a horrific failure surpassing the scale of Buchanan or Hoover.

  • the war…buoyed the US economy

    Is this really what happened? “Broken windows” and all that?

  • Paul Marks

    The war made things like the minimum wage law ineffective – because of the (disguised) wartime inflation.

    However, also (oddly) although the war meant more regulations in many ways (for example price controls and rationing) it also meant less regulations in other ways.

    For example, Ford Motor Company had more freedom running its own affairs (both from the government and from the U.A.W. – which gets its power from the government) than it had in the 1930′s – or ever has since.

    It was the same for the other corporations. Any union trying to use the threat of violence to stop work and prevent other people being employed to the job (the dirty violent secret behind what W.H. Hutt called the “Strike Threat System”) did not get a free hand in World War II.

    In short – in a odd (very odd) way, markets (most importantly labour markets) cleared during World War II. And many of the prewar controls of the 1930′s did not come back (at least at first) after the war – for this free enterprise policy the “do nothing Republican Congress” elected in 1946 deserves the credit. Even Murry Rothbard admited that it was elected on a free enterprise platform (the exact opposite of the Labour party in Britain in 1945) although it did not go as far in practice as he wanted.

    The late 1940′s (up to the Korean war) were the last time in American history when total government spending (Federal, State and local) was less than 25% of the economy and when the government did not have the whip hand in regulations either. For example, of all the big cities only New York preserved wartime rent controls.

    The post WWII boom was created in the late 1940′s – only undermined a bit by the 1950′s increase in defence spending. But then came the “Great Society” programs and so on of the 1960′s – and the long term mess the world is in now.

  • Paul Marks

    Barack Obama the new F.D.R.

    No it is a lot worse than that J.P.

    Yes F.D.R. was a rabid interventionist – even more so than Herbert “The Forgotten Progressive” Hoover (calling him a free market person is as absurd as calling Bush-brain a free market person – although some people in the Times of London, and in the universities do just that).

    However, Obama is not F.D.R. – he is far more like some (not all) of the advisers in the “Brains Trust” or later advisers like Harry Hopkins or Dexter-White.

    Nor are there many conservative (or even moderate) Democrats left in Congress.

    People like Speaker Nancy Pelosi or Majority Whip Durbin would not have held positions of power in Congress in the 1930′s.

    In the 1930′s there were also many conservative newspapers – there are not now.

    Conservative talk radio (and so on) will be easy for Comrade President Obama (and his allies) to destroy.

    Lose in Novmember and it may well be “game over” – and not just for the United States.

    The collectivists are no longer interested in isolated collectivist lands (such as the one in Plato’s “The Laws”). They want the “world community” – and by “international agreements” they will eliminate such things as freedom of speech and financial autonomy.

    Paranoia of mine?

    Or a dream confined to a few on the far left?

    Not so.

    For example, “Chris” Patton (ex Chairman of the Conservative Party and Chancellor of Oxford University) would cooperate with the left on their dreams of globel power – although I doubt he would like the use they would make of such “international community” power.

    “But America will veto it all” – errrr no, under President Obama and allies the United States would be in the vanguard of it all (even though getting rid of national veto right is part of the idea).

    “The Supreme Court will stop them”.

    The Supreme Court follows the election returns – and there are plenty of ways of crushing most dissent without giving rise to a Supreme Court case anyway.

    So, again, lose in November and it may well be game over.

    And all indications are that we are going to lose.

  • John Louis Swaine

    As someone who took a History A-Level in the Great Depression and the New Deal just 6 years ago, I can inform you that the heroic portrait of FDR is alive and well.

    No mention was given of how disastrous his economic policies were in fact there was no mention at all of their outcome.

  • I used to write BHO off as a “suit full of bugger all”. I’m not so sure now. I think he is positively dangerous. I suspect he is a thoroughly un-reconstructed Marxist and a black-supremacist and he will sell America down the river epically.

    Paul is right about the war. There was no demarcation or similar union nonsense at the Battle of Kansas.

    The biggest US project during the war wasn’t Manhatten, it was the Boeing B-29. The B-29 is in many ways one of the most important aircraft ever. Many of it’s features and the whole design concept figure in all airliners to this day. It was a monumental leap in aircraft design and the project cost $3bn back when that was a load of money. At first it didn’t work. It was too advanced, it was rushed through development, it was a tricky one hence the Battle of Kansas. People worked round the clock to get the Hemisphere Defence Weapon working as billed. And did it work? Oh yeah. It worked. Japan surrendered without a single Marine having to storm the beach at Yokohama. The heaviest bombing raid of the war wasn’t Hiroshima or Nagasaki. It was 279 B-29s hitting Tokyo at low altitude and dropping napalm on the wood and paper houses. Nobody knows how many died but the firestorm burned 16 square miles of the city to the ground. Little Boy only flattened 4 square miles.

    Anyway, enough of that!

    My Dad told me about demarcation in the shipyards of the Tyne in the 70s. They were re-fitting a passenger ship and the client wanted wood-panelling in a dining room. Well this meant drilling through both the wood and the steel of the ship. The unions threw their toys out of the pram over that. A carpenter had to drill through the wood and then hand-over to a metal-worker once the bit hit the steel. One third of the World’s ships were once built upon the Tyne. Not any more.

    We lost the Battle of Kansas mentality. I once worked for the reprehensible Rural Payments Agency(Link) down where William Armstrong’s works were once located and guns for Dreadnoughts were fashioned. I was doing the paper-work to bribe farmers to raise beef cattle*. Dismal. I was a temp. That’s my excuse. I never saw the depravity documented in the link but frankly nothing would surprise me about that place. Nothing. My line-manager used to fake overtime and piss off to the Metrocentre shopping. She did that utterly blatently. I have mentioned that link before here and I make no excuse for doing so again. I was reprimanded for streamlining the process. I was reprimanded for cleaning a computer monitor (the contractors do that – they actually had contractors come up from London to wipe the screens – I spoke to them – they were happy as sand-boys because they were being paid beaucoup for doing bugger-all and put up in a hotel and given a food and drink allowance). I was reprimanded for “racism” because my computer had wallpaper of the Sunderland Manager, Peter Reid morphed to look like he had a monkey’s heid. Peter Reid has a certain simian look about him but he’s white for Gawd’s sake! This dimwit who knew nothing about football or the NE thought I was dissing a black man. In anycase I wasn’t the one who set that wallpaper. They were obsessed with “diversity”. So obsessed, we all got diversity training because they’d taken on a new temp with “multiple facial piercings”. It was painfully obvious that the utter hicks that managed us had more of an issue than us temps (mostly graduates!) and in anycase the lad in question got a better offer and didn’t turn-up. Not that any of us would have cared an iota anyway.

    The two Pakistani lads in front of me did nothing but follow the cricket via the ‘net and did this blatently because they knew that if any of the management got arsey about it all they’d have to say was “racist” and that was it. Fair play to them I thought – the job was of negative utility anyway and they taught me to swear in Urdu. A skill which proved useful when I moved to Manchester.

    *actually it was a little bit tricksier than that. It was utterly corrupt and the paper-work for each cow took longer than those efficient lads at the abattoir.

  • Thanks for the answer Paul, I have been wondering about that for quite a while.

  • John K

    I have to agree with what’s been said about FDR. The snow job which has been applied to his presidency is amazing, you really have to stand back in awe.

    I was taught about the New Deal at school in the 70′s. We learned about the WPA and the TVA and all that shit, and the impression was given that that was it, a few big government programmes and depression over. If that’s not still the way it’s taught I’d be amazed.

    As to Obama, the idea of him in the White House, with the Democrats in charge of the House and Senate can only fill one with gloom. I think McCain is a complete arse, but I can only pray he gets in come November. I’m not optimistic though.

  • RobtE

    Two UCLA economists have recently come to the same conclusion about FDR. According to them, FDR’s policies extended the Depression by seven years.

  • Laird

    We’re screwed either way.

  • moonbat nibbler

    Perhaps the most frightening news articles I’ve seen all year were from the BBC pushing an FDR-style “New Deal” on green issues, see:

    http://news.bbc.co.uk/1/hi/sci/tech/7513635.stm
    http://news.bbc.co.uk/1/hi/sci/tech/7513415.stm

    As for broken windows; wars provide huge growth in labour to mend those windows. If the labour market was anywhere near capacity there wouldn’t be such a war time boost, so Bastiat/Hazlitt are fundamentally correct, but unfortunately we live in a world where socialism has a stranglehold.

  • Lou

    Also not covered in school is the extreme partisan enforcement of FDR’s rulings. For example, farmers were forced to plow crops under or slaughter animals to maintain artificial shortages/keep prices up. Those farmers were paid lower than market rates as compensation. My grandparents (Republicans) were ordered to kill all their pigs/soak them in gasoline so the meat was inedible by the local price control board (run by democrats). Other relatives had to plow crops under – again based on party lines. And the great public works projects – guess what party you should have been aligned with to be awarded contracts for the job or what rate you were paid when eminent domain was declared. Finally, while all the hullabalo is made about the Japense-Americans sent to camps, nothing is said about the German-Americans or Italian-americans interned during the war. And no apology or compensation of course is in the cards for them. FDR was a real prince all right / sarcasm off.

  • Devilbunny

    Not that I think FDR was right, but you’re quoting the wrong set of figures to prove that he did harm: he didn’t take office until March of 1933.

  • Johnathan Pearce

    Not that I think FDR was right, but you’re quoting the wrong set of figures to prove that he did harm: he didn’t take office until March of 1933.

    Well unemployment rose, then fell, but stayed well into double-digit percentages, on FDR’s watch. However one tries to fine-tune it, the fact is that these are terrible numbers, and hardly fit at all with the “FDR saved capitalism” line.

  • Obama is the next Jimmuh Carter. The difference is that Carter came in as a recession was ending and managed to turn the economic recovery into drawn affair that shot the misery index into new territory. Obama is coming in as oa recession starts and it is unknowable what that clone of Carter’s will do.

    Both President’s faced high energy prices, a tight energy market and a lack of consumer confidence. How long will the media be able to blind America to the fact that Obama is an empty suit?

    Start burying those gold coins in the back yard!

  • John K

    Not that I think FDR was right, but you’re quoting the wrong set of figures to prove that he did harm: he didn’t take office until March of 1933.

    You can’t be right, Joe Biden said FDR was on the telly in 1929 to reassure the American people after the Wall St Crash.

  • Rex

    Quilly,

    Carter told people to wear a sweater to save heating costs; Obama told people to check the air in the tires to save gas:)

    You are right, obama is no FDR on foreign policy; he is the new JC (jimmuh liked to liken himself to Jesus Christ, by using JC – people say)

  • nick

    FDR came in 32 rates went down

    and support systems for unemployed went up

  • Would it be pedantic to point out that there was no way FDR could have been on the telly in 1929, even if he were president?

  • Ken

    OK, everyone here is smarter, wiser, and more thoughtful than me-I’m jus’ a redneck hick that happens to think(oops, I almost said “feel” there)that the US Constitution, up to about amendment 15(?-don’t quote me, I don’t have a copy handy for ref.) and not the….shoot,OT,
    Of course FDR was/is “worshiped”, he, after all, “helped” make the world safe for colectivisim(sp).
    Witness Yalta, lend lease to USSR, the “repatration” of Sov POW to Stalin’s “gloriously victorious” armys, in Czechoslovakia-where Patton had been ordered to “stop” fighting, and my Uncle, a line troop in Pattons army, saw and heard the “take them out back and deal w/them” results, very often out back was behind a ford or studebaker truck, or a Sherman(L/L to USSR) tank. (Amazing what a 9mm slug will do to a human head a 0.1 foot, he said.) He saw it as a bitter betrayment of all he thought he had fought for. Let’s not forget the “5 year plans” and forced removeles(sp) of TVA, either.

  • AOracle

    The telling stat for FDR’s disastrous handling of the Depression is the un-employment rate for 1938: It went from 14% in 1937, to 19% in 1938; this after five years of the “Brain Trust” leading the country into economic recovery.
    It only came down again as war-related manufacturing ramped up in 1940.

  • moptop

    “Would it be pedantic to point out that there was no way FDR could have been on the telly in 1929, even if he were president?”

    I don’t know, ask Joe Biden. It was his remark.

  • mark l.

    If you voted for FDR in 1944, you are now 82 years old.

    There comes a time when pundits, like c matthews, need to go back and get an actual history degree, rather than present their knowledge as if they were there.

    The last president who got us out of a rut?

    ronald reagan. If you are older than 42, you should remember him.

  • not al gore

    the one nice thing about our pending ‘apocolypse’?

    the people who were betting no global warming look really stupid.

    imagine if they had shifted their attention to the current problems we faced, and obsessed over the financial markets.

    hmmm…stave off financial crisis, or cut carbon emissions.

    When the environuts figure out that a global recession is the most effective means of reducing co2, do you think they’ll be dancing(or starving) in the streets?

  • Jacob

    What causes the current financial meltdown ?
    Can we engage in a little speculation ?
    Maybe the market is reacting already to an Obama presidency ?

  • Harry Eagar

    It ain’t easy to reflate an economy. Especially when you are not allowed to pursue your policy because of interference by the Supreme Court.

    Yes, I know, there is an inspired campaign to declare the New Deal a failure, which would have been so much better if the markets had simply been allowed to have taken their course.

    Of course, they had taken their course. You cannot liquidate much more than 90%, and that resulted in the 25% unemployment and deflation.

    All before Roosevelt got involved. Posters who say his unemployment numbers look ‘terrible’ are correct, but only so long as you don’t look at anybody else’s numbers.

    They are about half what the market operating without supervision had delivered.

    Unsupervised financial markets crash. If you don’t believe me, look in today’s newspaper.

  • Jacob

    “Unsupervised financial markets crash. If you don’t believe me, look in today’s newspaper. “

    And supervised markets, like the US had since FDR, crash too, look in today’s newspaper. Really big crash, like only government can cause.

    It’s a delusion to believe that government can supervise merkets and prevent crashes.
    What caused the bubble in the first place, was the easy money policy of the Fed (government).

  • Jacob

    And, folks, you gonna miss jimmah.
    He was a nuclear engineer, a Navy man, a farmer.

    What you’re getting now is a hard core, commie lawyer.

  • mark l.

    “What causes the current financial meltdown ?”

    The system was already set up so that earnings were built in…modest gains over a long period of time.

    Derivatives came about to make greater gains, over a much smaller time.

    The roulette wheel of housing had produced 20 consecutive ‘reds’, and so the theory went, keep betting on red.

    As red continued to come up, the financials took all their winnings and continued to place them all on red.
    It was so lucrative they borrowed to get even more money on red, until the table held all their money ‘earned’ and borrowed, and the ball landed on black.

    This might have been the end of it, but they begged the us fed not to raise the interest rate so they could sit at the table longer, and try and win back what they now owed.

    Had the US fed realized that their low rates were buying time for the financials to lose even more money at the gambling table, they would have raised the rate and the house of cards would have collapsed 2 years ago.

    John Snow had no idea what he was doing, and listend to his ‘experts’ who happened to all come from finaical companies. Their con was to tell Bush/Snow that if they raised the rates, we would encounter a recession-which was true. They failed to mention that their current predicament could only be resolved if the housing market went back to producing a continuous string of reds. Most of the companies thought that they could ride it out. They wre wrong. Basically, the people who were the most credible and vocal, just happened to be the people who had gambled it all away.

  • sportutegrl

    Few people remember that before George W. Bush took office in 2000 the internet bubble burst, crashing an overinflated stock market. If that weren’t bad enough, just a few months into his first term, 9/11 happened, sending the economy spiraling even further downward. That he happened to turn the economy around in a little over a year’s time is one of the great untold stories of his administration. Compare that to FDR’s record. Despite being reelected for 4 terms, in all that time, he never NEVER got the economy and stock market back to pre crash levels, it just got worse and worse.

  • M

    Few people remember that before George W. Bush took office in 2000 the internet bubble burst, crashing an overinflated stock market. If that weren’t bad enough, just a few months into his first term, 9/11 happened, sending the economy spiraling even further downward. That he happened to turn the economy around in a little over a year’s time is one of the great untold stories of his administration.

    Bush/Greenspan responded to 9/11 by pumping up the money supply like crazy. Perhaps you have been asleep for a year, but it is pretty common knowledge that all that cheap money Greenspan put into the economy is one of the main reasons the US economy is in a shit state.

  • Yes, M, Bush is no kind of fiscal conservative. (I’ve been known to comment that polls always seem to assume that he’s unpopular because he’s not progressive enough – as if that’s the only possibility.) But in the aftermath of 9/11, with Wall Street CLOSED for days, lower Manhattan smoking for weeks, no planes in the sky (remember the first time you saw one going overhead again? Did you feel the same sense of foreboding that I did?) for a while and then the airline industry and all that rely on it taking an enormous hit, “pumping up the money supply like crazy” certainly seemed to keep the country on a completely unreasonably even keel. Given what we’d come through, I mean. Remember, too, when the market first regained its lost ground? It was underreported, so maybe it just slipped past you. Of course, we’ve had several years well north of that line. We’re STILL north of it see this.

    And you have to look a lot farther back in time to find the roots of the subprime mess and current credit squeeze, as I’m sure you know. But hey, at least you’re not blaming Bush for 9/11 itself! That’s a departure from the narrative, for which I’m grateful.

  • M

    “pumping up the money supply like crazy” certainly seemed to keep the country on a completely unreasonably even keel. Given what we’d come through, I mean.

    Perhaps so, but this doesn’t justify unsound monetary policies.

  • RRS

    For those interested in a true picture of that period, read Amity Shlaes’ The Forgotten Man.

    WWII accelerated the modern industrialization of the U S. It totally revamped transportation and communication. It set in motion a degree of “mobility” that has fostered the capacity for faster responses and adjustments to adverse developments. The G I Bill accelerated a huge leap in the structure and composition of the middle class. Windows were broken to be sure.

    Still, all in all, it was a terrible thing for those of us in it.

  • K

    I have long believed FDR was driven by political motives rather than economic ideas.

    In the 1920s and 1940s countries were turning to fascism and its equivalent, socialism in Russia. The democracies were shaking, with good reason.

    If FDR had taken a conservative course there might have been greater problems and perhaps revolution. And perhaps not. Who can really know?

    Which is my point. FDR couldn’t know either. IMO he tried to defuse the left with social programs and financial controls while retaining a democracy. The NRA went too far. A real blunder. He made some.

    The figure for 1937 is interesting. 1937 was a severe downturn for the private sector. But the unemployment number doesn’t indicate that. The downturn was in business, but the government was funding a lot of public works employment.

  • Just Sayin

    The press certainly want to make him the next FDR. They’ve gone into hero worship mode. They’d make him el presidente-for-life (just like FDR) if it wasn’t for that bothersome 22nd amendment.

    All the right-thinking people don’t care how much damage his policies cause as long as he brings us socialism.

    Google “National Recovery Administration” if you want some interesting reading. Try this for a start:

    link

  • Jacob

    there might have been greater problems and perhaps revolution.

    The lefties say there might have been a fascist revolution, the rightists say – no, a commie revolution.
    This proves that both claims are nonsense.
    I don’t think there was any danger of a violent, totalitarian revolution in the USA in the 1930-ties.

  • K

    Jacob: You don’t think that now. But people at that time couldn’t know. They didn’t have an extra 80 years of recorded history to tell them.

    And that uncertainty is what I explictly referenced and you choose to sneer at.

  • Wayne Whig

    I’m no friend of the hagiography of FDR, but just looking at the chart:

    Did unemployment not balloon to nearly 25% in the four years *preceding* FDR coming to office (in March 1933)?

    Did it not decline in the four years up to 1937, FDR’s first term?

    Is the `New Deal’ responsible for the rise in unemployment after 1937?

  • Gabriel

    The lefties say there might have been a fascist revolution, the rightists say – no, a commie revolution.

    This proves that both claims are nonsense.

    And I guess the Nazi takeover of Germany “proves” there was no danger there from a large and powerful Communist party, huh. And perhaps the Bolshevik revolution proves the Kornilov coup attempt was a feature of everyone’s imaginations?

    Lame, very lame. The New Deal was utterly wicked almost in its entirety, to attack it one does not need to dishonestly minimise the political instability of the 30s. Not being able to predict which flavour of totalitarianism would prevail, does not mean that the totalitarian threat was not real.

  • Tom

    I am very aware of Obama’s tax agenda. After he successfully (ACORN) beating Hillary, I immediately placed 100% of my savings/401k into Cash/Treasury Bills/CD.
    Many of my business friends did the same. The Obama tax agenda will further reduce the desire to invest/risk. No one is energized to play the market until Obama is in office for at least 6-8 months….By then we’ll know what his liberal agenda will bring to the table.

  • I agree with you, FDR was terrible and by no means do I want another one. Unfortunately that’s a lot like what Obama seems to be, so far. Still, give him some time, he’s not even president yet for FSM’s sake. If you read Audacity of Hope he actually looks a lot like a free-market liberal…which would be great, actually. We can only hope that he’ll tend towards that rather than the socialist campaign promises he made.

    But honestly, Obama’s foreign policy is pretty good. It actually makes a lot more sense than I think McCain’s did, and Obama’s social policies are better. I just dislike his economics. Sorry, libertarian here.

    Also, the threat of totalitarianism is always very real, but at least so far in human history the good old U.S. has trended towards liberty away from totalitarianism. In my opinion, both McCain and Obama would have been a step backwards, and I can only hope the next round is better…