Quote (Black XistenZ @ Apr 6 2021 09:01pm)
Fine, you are correct to point out that the coincidence between FDR's tenure and the end of the Great Depression and the victory in WW2 is not definitive proof for his policies or leadership being the reason. It is certainly possible to imagine a scenario in which a well-timed presidency reaps the praise for larger developments which were inevitable irrespective from his actions. But if you want to make this claim to the truth being the opposite of the straightforward, then the burden of proof is on you, not me.
It is undeniable that the U.S. were in a much better place, economically, militarily and geostrategically, in 1945 than they were in 1933. After such a long presidency, and considering how active and politically dominant FDR was, it seems exceedingly unlikely that he simply "lucked" into all of this in spite of ineffectual or even harmful policies. In particular, you really need to provide cogent arguments as to why a continuation of the laissez-faire policies of his predecessors, which had been unable to make any progress toward overcoming the Great Depression for several years when FDR took over, would miraculously have turned the economic tide in 1933 or shortly thereafter. (Which is the implication of your claim that his New Deal policies worsened and lengthened the depression.) Moreover, FDR-style Keynesian economic policies were used to great effect all around the world for decades; decades which saw the West reach unprecedented growth of the standard of living and economic equality.
Likewise, one can certainly argue that the course and the outcome of the war would have been roughly the same with any president at the helm, but it's still striking how well the U.S. got through the war: arms support for the UK and the Soviets allowed the U.S. to see the Axis powers defeated with a comparatively very low American death toll while simultaneously securing a strong position in Western Europe for the coming post-war conflict.
This is filled with a number of typical and basic myths and falsehoods surrounding FDR, Hoover, economics and the great depression.
I recommend reading Economics in One Lesson by Henry Hazlitt, which is available for free online.
FDR's role in worsening the great depression isn't a novel concept we just came up with. Its already well supported and documented.
Hoover was not even remotely close to a laissez-faire president.
For starters you can search the term 'Hoover's New Deal' .
Many New Deal policies were based on Hoover's policies or an expansion of them, and an FDR advisor explicitly said as much.
Hoover also signed the protectionist smoot-hawley tariff act.
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“Hoover’s laissez-faire reputation is owed almost entirely to 1930s Democratic campaign rhetoric and New Deal school of historiography,”
“Hoover entered public life during the Great War as Woodrow Wilson’s head of the United States Food Administration and in that position oversaw an unprecedented intervention in the American economy to ensure that the United States and its allies were sufficiently provisioned to win the war,” he says. “And as president he put the government to work in ways that were inconceivable to any of his predecessors.”
He "introduced a counter-cyclical program of public works spending, the first of its kind, to stimulate employment and recovery. He bullied the nation’s largest employers into holding off on layoffs—their usual reaction to a downturn—to stabilize the economy and aid recovery, and to continue investing in new plants and equipment.”
- Hoover biographer Kenneth Whyte's glowing interpretation of Hoover's disastrous interventionist policies.
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Back to FDR:
In order to recognize the fact that FDR worsened and lengthened the great depression I do not have to prove that a magical and immediate recovery would have otherwise happened in 1933.
Many of FDR's policies were idiotic and directly at odds with even the most basic economic knowledge.
Misdiagnosing the problem as excessive competition and low prices, he engaged in pervasive price fixing and market intervention.
He jacked up taxes/theft of Americans and paid people to stop producing.
You give him credit for presiding over the worst depression in history that he supposedly fixed.
Presumably because thats what you were told in some government school.
Do you ever question why it lasted so long and the recovery was so slow and delayed if the FDR and the New Deal were so good?
Instead of allowing needed market corrections FDR mandated higher prices and wages and intervened in the economy on an unbelievable scale.A few years back UCLA economists put out a study asserting he lengthen it by 7 years and "The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies"
"New Deal cartelization policies are a key factor behind the weak recovery, accounting for about 60 percent of the difference between actual output and trend output," the authors write.
Excerpts from Author and economics professor Thomas DiLorenzo's somewhat critical review of that paper and FDR's role in the great depression:
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FDR and his advisors mistakenly believed that the Depression was caused by low prices, therefore, high prices—enforced by threats of violence, coercion and intimidation by the state—would be the "solution." Moreover, it is hardly a secret that if less production takes place, fewer workers will be needed by employers and unemployment will subsequently be higher. Thus, the First New Deal could not possibly have been anything but a gigantic unemployment-producing scheme according to standard neoclassical economic theory.
FDR's tripling of taxes, his regulation of business, and his relentless anti-business propaganda also contributed to a worsening of the Great Depression, but his labor policies were probably the most harmful to the employment prospects of American workers.
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Vedder and Gallaway conducted an econometric evaluation of these labor cost-increasing policies and concluded that most of the abnormal unemployment of the 1930s would have been avoided were it not for these policies. They estimated that by 1940 the unemployment rate was eight percentage points higher than it would have been without the legislation-induced growth of unionism and government-mandated employment costs. They conclude that "The Great Depression was very significantly prolonged in both its duration and its magnitude by the impact of New Deal programs" (p. 141).
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In "Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War" (Independent Review, Spring 1997), Higgs showed that it was the relative neutering of New Deal policies, along with a reduction (in absolute dollars) of the federal budget from $98.4 billion in 1945 to $33 billion in 1948, that brought forth the economic recovery. Private-sector production increased by almost one-third in 1946 alone, as private capital investment increased for the first time in eighteen years.
...after FDR's death.
https://mises.org/library/new-deal-debunked-againRobert Higgs:
(regarding the gold confiscation that started this topic)
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In their understanding of the Depression, Roosevelt and his economic advisers had cause and effect reversed. They did not recognize that prices had fallen because of the Depression. They believed that the Depression prevailed because prices had fallen. The obvious remedy, then, was to raise prices, which they decided to do by creating artificial shortages. Hence arose a collection of crackpot policies designed to cure the Depression by cutting back on production. The scheme was so patently self-defeating that it's hard to believe anyone seriously believed it would work.
The goofiest application of the theory had to do with the price of gold. Starting with the bank holiday and proceeding through a massive gold-buying program, Roosevelt abandoned the gold standard, the bedrock restraint on inflation and government growth. He nationalized the monetary gold stock, forbade the private ownership of gold (except for jewelry, scientific or industrial uses, and foreign payments), and nullified all contractual promises—whether public or private, past or future—to pay in gold.
Besides being theft, gold confiscation didn't work. The price of gold was increased from $20.67 to $35.00 per ounce, a 69% increase, but the domestic price level increased only 7% between 1933 and 1934, and over rest of the decade it hardly increased at all. FDR's devaluation provoked retaliation by other countries, further strangling international trade and throwing the world's economies further into depression.
Higgs on agriculture+:
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Having hobbled the banking system and destroyed the gold standard, he turned next to agriculture. Working with the politically influential Farm Bureau and the Bernard Baruch gang, Roosevelt pushed through the Agricultural Adjustment Act of 1933. It provided for acreage and production controls, restrictive marketing agreements, and regulatory licensing of processors and dealers "to eliminate unfair practices and charges." It authorized new lending, taxed processors of agricultural commodities, and rewarded farmers who cut back production.
The objective was to raise farm commodity prices until they reached a much higher "parity" level. The millions who could hardly feed and clothe their families can be forgiven for questioning the nobility of a program designed to make food and fiber more expensive. Though this was called an "emergency" measure, no President since has seen fit to declare the emergency over.
Industry was virtually nationalized under Roosevelt's National Industrial Recovery Act of 1933. Like most New Deal legislation, this resulted from a compromise of special interests: businessmen seeking higher prices and barriers to competition, labor unionists seeking governmental sponsorship and protection, social workers wanting to control working conditions and forbid child labor, and the proponents of massive spending on public works.
The legislation allowed the President to license businesses or control imports to achieve the vaguely identified objectives of the act. Every industry had to have a code of fair competition. The codes contained provisions setting minimum wages, maximum hours, and "decent" working conditions. The policy rested on the dubious notion that what the country needed most was cartelized business, higher prices, less work, and steep labor costs.
To administer the act, Roosevelt established the National Recovery Administration and named General Hugh Johnson, a crony of Baruch's and a former draft administrator, as head. Johnson adopted the famous Blue Eagle emblem and forced businesses to display it and abide by NRA codes. There were parades, billboards, posters, buttons, and radio ads, all designed to silence those who questioned the policy. Not since the First World War had there been anything like the outpouring of hoopla and coercion. Cutting prices became "chiseling" and the equivalent of treason. The policy was enforced by a vast system of agents and informers.
Eventually the NRA approved 557 basic and 189 supplementary codes, covering about 95% of all industrial employees. Big businessmen dominated the writing and implementing of the documents. They generally aimed to suppress competition. Figuring prominently in this effort were minimum prices, open price schedules, standardization of products and services, and advance notice of intent to change prices. Having gained the government's commitment to stilling competition, the tycoons looked forward to profitable repose.
But the initial enthusiasm evaporated when the NRA did not deliver, and for obvious reasons. Even its corporate boosters began to object to the regimentation it required. By the time the Supreme Court invalidated the whole undertaking in early 1935, most of its former supporters had lost their taste for it.