FDR and the Great Depression

        I recently disparaged Franklin D. Roosevelt suggesting he caused the Great Depression.  My friend was shocked.  “Who are your reading? Revisionists?  Funded by whom--the Koch brothers?”  Many economists dispute the FDR mythology: Gene Smiley, Milton Freedman, Benjamin Anderson, the entire Austrian School of Economics.  If they are funded by the Koch brothers, good for them. 

        Our federal government spends billions of dollars trying to convince the American people to worship the wizardry of an interventionist government   Our school textbooks include the historical revisionists. The first economist I listened to was my father. He recognized that federal agents raiding his farm, plowing up his crops and burying his livestock in the field was not smart economically.  We survived.  He hunted both in and out of season to keep meat on the table and did whatever he could, digging wells, sheering sheep, moving houses, selling skunk tails, in order to put clothes on our backs and shoes on our feet.

      America suffers severe economic down turns every 20 years. Historically the market corrects itself within 2 years.  The Great Depression lasted 12 years because everything the federal government did plunged it deeper into despair.

      It wasn’t greed, but the Fed bloating the money supply that caused the crash, and it was not the market crash that caused the depression, it was inept government policies. The Smoot-Hawley Act tripled tariffs, manufacturers couldn’t afford the raw materials and shut their doors.  Millions lost their jobs. It started a disastrous trade war.  Other nations refused to buy American goods and the agricultural industries went into a tailspin.

       Roosevelt increased government spending by 80 per cent, raised income taxes to 90 percent, imposed banking rules closed thousands of banks.  (Not one closed in Canada.). His national minimum wage law forced inexperienced and unskilled workers out of the job market.

       The NIRA put the government, fascist like, in control of industry Government hacks stormed through industrial districts with axes, breaking down doors looking for violators of a boondoggle of codes and rules and regulations. Within months’ industrial production dropped by 25 per cent.

          The CWA and then the WPA put millions to work but 99 per cent of it was piddling around.  My friends have fathers who praise Roosevelt because he gave them a job.  What they don’t realize is that his administration stifled industry and trade and prevented them from getting real jobs that produced wealth.

WWII put Roosevelts attention elsewhere, and the country revived.