FDR prolonged the Depression. (Yeah, right.)

Discussion in 'Politics, Religion, Social Issues' started by Thomas Veil, Jan 3, 2009.

  1. Thomas Veil macrumors 68020

    Thomas Veil

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    #1
    Has anybody heard the most recent Republican talking point? You know, the one that says that FDR's policies actually didn't get us out of the Depression, they prolonged it?

    I've been reading it and hearing it on the airwaves lately. I'm even starting to see it on forums like this one.

    Well, I came across this at Salon, and I thought I'd share it. It'll come in handy the next time someone tries to pass off that latest piece of blatant revisionism.

     
  2. Desertrat macrumors newbie

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    #2
    The viewpoint has zilch to do with Republicans. Further, the views as to the effects of FDR's policies are nowhere being new; been around for decades. Various analyses by multitudes of Economics professors. But, not talked about much because it went against the prevailing wisdom, that FDR "saved" us.

    One of the easy ways to figure it is to look at the unemployment rates by year. Employment was actually picking up until around 1933, when the effects of the Smoot-Hawley tariff kicked in. IIRC, 1934 was the worst year for unemployment. My birth year, but "I didn't dunnit!" :D

    The political side is sorta funny. Hoover tried "pump priming" as it was then called, vs. "stimulus package" today. He was constrained by law as to how much money he could create (or the Fed could create). FDR ran on an austerity program, calling Hoover "profligate". Then, he started his own pump priming. By calling in all the gold, he could devalue the dollar (from $20.67 per ounce to $35 per ounce) and thus have more fiat money to put into circulation--which didn't help. The weather didn't help either, what with the drouth in the Great Plains and the Dust Bowl.

    It seems to me that whether or not his policies hindered the recovery is beside the point, really. What we know is that his ideas didn't help. And we also can see that the same root causes of the 1929 crash occurred here during these last dozen or so years: Easy money, loose credit, bubble economy.

    We're doing the same things today that Hoover and FDR did. Stimulus packages, bailouts, uber-low interest rates. Parallelling Japan, for that matter, and they're still in the serious doldrums since 1990. My problem is that I see no change with the incoming administration. More stimulus, WPA v2.0, deficit spending in the trillions. And we're a whole bunch worse off as to future electric energy production and transportation fuels.

    'Rat
     
  3. TSE macrumors 68030

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    #3
    I like how you blamed that on Republicans.

    "Ignorance is bliss, into a deep hole that is."

    And secondly, a lot of FDR's policies were actually thought up of works from Hoover. Hoover tried to pass a couple of these policies but the senate turned them down. FDR comes along and the senate gets much more impatient with the economy crisis so they accept these policies. Hoover gets a bad rep, some of it is understandable but not all of it. FDR is a little overrated, also.

    The true man that fixed our economy was Adolf Hitler.
     
  4. leekohler macrumors G5

    leekohler

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    #4
    Nice. And of course we all know Republicans can do no wrong. Everything good that's ever happened is because of Republicans. That's why they run on their policies and never resort to fear tactics and character assassination. :rolleyes:
     
  5. bobber205 macrumors 68020

    bobber205

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    Only a Ron Pauler would say Hoover was anything but terrible and that FDR is overrated. xD
     
  6. Rodimus Prime macrumors G4

    Rodimus Prime

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    #6
    As much as I hate to say this
    Rules of Acquisition: #34 War is good for business

    Like it or not war is good for business. It makes companies a lot of money.
     
  7. .Andy macrumors 68030

    .Andy

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    #7
    Conservatism never fails, it is only failed.
    Conservatism never fails, it is only failed.
    Conservatism never fails, it is only failed.
    Conservatism never fails, it is only failed.
    Conservatism never fails, it is only failed.
    Conservatism never fails, it is only failed.
     
  8. leekohler macrumors G5

    leekohler

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    #8
    Repeat until it is believed, no matter how much damage it does.
     
  9. Counterfit macrumors G3

    Counterfit

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    #9
    Especially when they get no-bid contracts and overcharge by millions of dollars.
     
  10. Blue Velvet Moderator emeritus

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    #10
    After all, it's worked so well. Time to open up yet another front in Somalia, Pakistan or perhaps Iran.
     
  11. thebassoonist macrumors 6502a

    thebassoonist

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    #11
    I await the day when we value human life more than we value profits.
     
  12. itcheroni macrumors 6502a

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    #12
    Our current war is making contractors rich but it's sending our country to the poor house. It's a zero sum game.

    I don't understand what's so hard to believe about FDR possibly prolonging the Depression. We were dragged out of the Depression by the war. We can't say for a fact how the economy would have faired without FDR's Keynesian efforts. All we do know is that after 8 years, what brought us out was more the war than FDR's policies.

    By the way, this shouldn't be a Democrat v. Republican issue. Other countries that are pushing stimulus packages can actually afford them. The US can't. China could pay for their stimulus and the US's with just their dollar reserves. The US needs to borrow every cent for its stimulus. Why can't people see that a stimulus package on credit may very well compound our problems? Saving will help our economy more than spending.
     
  13. Rodimus Prime macrumors G4

    Rodimus Prime

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    #13
    while FDR may of made the depression longer. it did prevent it from getting worse than it did.

    It made sure people had food on the plate and at least some money to survive.

    I rather have something last a little longer than go to the point people are dieing masses from starvation which sure as hell does not make it easy to recover either.
     
  14. aethelbert macrumors 601

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    #14
    That's the ticket right there. This "great depression" was, compared to the previous ones in the United States which saw little government help, much longer. The others, notably 1893, were extremely bad but much shorter. While the postbellum economy was pretty bad for about thirty years in the United States, the actual depressions were, relative to the 1930's, shorter. The effects of what followed the 1929 stock market crash were subdued by the actions of FDR and the new deal. But with intervention, the markets were slower to naturally restore and it took a bit longer to revitalize the country to its previous capacity until WWII came around. FDR's actions as president did likely prolong the depression, but also probably made it much easier to survive.

    No, these policies didn't get us out of the depression by themselves. In fact, their contributions to revitalizing the economy may have been quite small in comparison to the military's mobilization for war. Fact is, it only happened one way. We cannot go back in time and see how it would have happened without intervention or with more of it. If one wants to rebuke someone's opinion on how it may have happened through other means, both parties can still be far from the truth because we'll never find out.
     
  15. itcheroni macrumors 6502a

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    #15
    I think we need this discussion right now because of our current state (not that you're saying we don't). We are basically in the same position as then except for the addition of around 11 trillion in debt. Right now most Americans believe FDR's policies saved us from the Depression, which causes them to want similar policies now without understanding the implications.
     
  16. Dont Hurt Me macrumors 603

    Dont Hurt Me

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    #16
    Its pretty funny how the republicans ignore that a republican president and 6 years of a republican Congress put us right where we are today. Now Im not saying its 100% their fault but at least 75%.

    FDR didnt get elected 3 times in a row for nothing, There is nothing to fear but fear itself, meanwhile Bush , Cheney,Rove and the legions of republican draft dodgers who backed these clowns did their best to sell fear as hard as they could. Scumbags!!
     
  17. itcheroni macrumors 6502a

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    #17
    Bush and the Republican Congress definitely contributed to our current economic state. But the main thing that caused the housing bubble was the intervention to avoid the recession from the tech bubble. Now we're trying to intervene to avoid the effects of the housing bubble. Does the fact that this time the President is a Democrat change anything?
     
  18. itcheroni macrumors 6502a

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    #18
    I finally read the entire article. The author cites the opinion of economists and historians rather than provide his own reasoning. He states that most "mainstream economists" and "historians" agree the New Deal helped. Most mainstream economists also thought the economy was in great shape 2-3 years ago when the housing bubble was at its height. If they couldn't see our current problem coming, then how do we know they took the right lessons from the Great Depression? The economists that did see the housing bubble also believed FDR prolonged the depression with his policies (I haven't come across anyone who warned of the housing bubble who is also a Keynesian) . I personally don't know enough of the depression to say much more but I will say that simply because the majority holds an opinion doesn't make it correct.

    EDIT: The author of the article tries to box opposing opinion as "abject insanity" and partisan. I don't know if Jim Rogers is a "mainstream economist" but I'll put my money on him to be right against any Keynesian you can come up with.

    http://www.youtube.com/watch?v=w84EiCt0Lqk
     
  19. TSE macrumors 68030

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    #19
    I never said Republicans can do no wrong. I think Bush and Cheney are idiots. I think every neo-conservative Republican is an idiot. Nixon was an idiot. The Republican Party nowadays is not what it is supposed to stand for. I am not a Republican Party member, but I am a Republican.

    Please don't put words into my mouth. I just think that Hoover definitely gets more beef than he should, based on the fact that some of Roosevelt's economy fixing plans were based on Hoover's. I think Roosevelt was a great president, no doubt he did what was right during WW2, but I think he is overrated.

    True conservatism never has failed, because it has never been put into use.
     
  20. mysterytramp macrumors 65816

    mysterytramp

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    #20
    Cut through the crap and there's plenty of blame for Democrats and Republicans. (Of course, we who decline to affiliate are blameless ::) )

    Diverting the debate to fight once again the establishment of the WPA, the CCC, etc., is a ridiculous tactic. The economy in 2009 has changed unbelievably since 1929.

    The best thing to do is to pick an economist -- any will do -- and stick with him/her until this is over. Arguing points that were decided 75 and 80 years ago is a waste of our time.

    mt
     
  21. Desertrat macrumors newbie

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    #21
    "Arguing points that were decided 75 and 80 years ago is a waste of our time."

    True, but ignoring the history of how they got into the 1929/1930 kerflop and not seeing the parallel as to how we got into our present mess is dumber'n dirt.

    "Those who will not learn from history..." and all that. Yet, we're now repeating the actions of the 1930s...
     
  22. mysterytramp macrumors 65816

    mysterytramp

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    #22
    I just think the parallels are too few to worry about. Times are bad now. Times were bad then. Arguing Hoover v. Roosevelt diverts our attention to finding solutions for today's problems.

    There were two 747s that took off from Kansas City, one went west, the other east. Curiously, the pilots and copilots of both planes suffered fatal heart attacks en route. The autopilots start beeping that someone needs to take the controls right away.

    On the eastbound jet, a woman stands up and says she has a pilot's license and while she isn't checked out on such a large jet, she knows the basics and can communicate with air traffic controllers to land the plane. With the passengers' prayers, she enters the cockpit.

    On the westbound jet, a similar woman stands up, but when she opens her mouth, a lawyer says his firm will sue her family if she crashes the plane. A man who hosts a talk show on basic cable bullies others into vetting the woman's credentials. A leftist and a rightist argue whether the Democrats or Republicans should be blamed for this failure in pilot health care delivery. The woman is paralyzed; indecision has been thrust upon her.

    One plane might crash, the other certainly does. Which one do you want to be on?

    mt
     
  23. itcheroni macrumors 6502a

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    #23
    That's not a very apt analogy. It's more like one plane with two women, both of whom claim to know how to fly. Rather than checking to see who is better able to fly, you're saying we should randomly pick one and just try it out?
     
  24. Desertrat macrumors newbie

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    #24
    mysterytramp, how many parallels do you need? Easy money, loose credit always creates bubbles. That's history. Bubbles pop. That's history. When they pop, assets contract in value. That's history.

    That sort of process occurred quite often before and during the Depression. It's happened since then, although to a lesser degree.

    A recession is merely a less-severe depression. Semantics.

    So the key parallel is the behavior before and after the break point of the bubble. Then and now, the behavior has indeed been in parallel, which is the reason so many of us expect the same results.

    Asset value loss? $32 trillion worldwide; some $7 trillion so far, here in the U.S. and more to come.
     
  25. mysterytramp macrumors 65816

    mysterytramp

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    #25
    I think they're false parallels, or at least irrelevant parallels because so much is different.

    1) We are far more dependent on other nations for our manufacturing capacity than we were 80 years ago. Whatever solutions come forward will have to be good for other nations for them to be good for us.

    2) The government work force is immensely more important now than it was 80 years ago, at all levels. The talking heads who claim to be conservatives think we can cut our spending drastically to solve our crisis. Regardless of the positive effects that might have, it'll have a huge negative in exacerbating unemployment.

    3) So many of us are dependent on Wall Street for our retirements. While there might be long-term positives in letting a GM go bankrupt, for example, there are going to be long-term negatives in baby boomers trying to rebuild wealth for their golden years.

    These are the three biggies off the top of my head. I think there's also lesser issues with our greater mobility (In Maryland, we see people moving from Md. to Va. to W.Va. to Pa. depending on the benefits they can find in the safety net) and technology (in the creation/elimination of jobs).

    These factors were easily ignored in 1929. In the current crisis, these things should be front an center. What worked/didn't work then is irrelevant today.

    mt
     

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