Obama thinks FDR didn't spend enough fast enough!!!

[shagdrum]

Obama Suggested FDR’s ‘New Deal’ Was Too Small, House Republicans Say
By Josiah Ryan, Staff Writer

In a closed-door meeting with House Republicans on Tuesday to discuss the $819-billion economic stimulus bill, President Obama suggested that Franklin Roosevelt’s New Deal failed because it was too small, Reps. Steve King (R-Iowa) and Rob Bishop (R-Utah), who attended the meeting, told CNSNews.com.

“FDR’s initial steps did actually work,” Obama said at the meeting, according to King. Obama went on to say, “Then he [FDR] pulled back towards a balanced budget, and then what you had was a recession within a depression. Then World War II came along and was the biggest stimulus plan ever.”

The White House did not respond to requests for verification of Obama’s comments, and several Republicans who were in the meeting said they either did not remember the remarks or would not discuss the details of the conversation in public.

King said he interpreted Obama’s comment as an indicator of Democrats’ mindset on stimulus spending.

“I take it this way,” King told CNSNews.com on Wednesday. “If FDR had not essentially lost his nerve and pulled back towards a balanced budget, he would have spent more money, the New Deal would have been a bigger deal, and it would have then brought us out of the Depression. That mindset tells us what’s driving this stimulus approach.”

Bishop was also critical of Obama’s remarks.

“It was his [Obama’s] revisionist view of history which is inaccurate,” said Bishop. “I have heard that history from other people, and I think it’s inaccurate.”

In an interview with CNSNews.com on Jan. 8, House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) was asked about FDR’s spending in the Depression and the current economic stimulus proposals.

“Well, a lot of economists tell us that what President Roosevelt failed to do was to spend as much money as was needed to get people back to work and get the economy moving again,” said Waxman. “And it wasn’t until World War II, when we had major expenditures, that the Depression was finally resolved.”

The $819 billion stimulus package passed in the House of Representatives Wednesday evening, on a vote of 244 to 188 – no Republicans voted in favor of the package.

 

[shagdrum]

Obama Explains FDR's Folly?

Congressman Frank Lucas (R-OK) offered KNID radio an illuminating glimpse into President Obama's much-discussed stimulus pep talk with House Republicans. According to Lucas, Obama expressed his belief during the meeting that a major problem with FDR's New Deal is that it didn't spend enough money in the early going. Here's a partial transcript of the congressman's interview:

The president offered a comment in the conference the other day. He said that the spending program that President Roosevelt used in the beginning of the depression – the real problem was that Roosevelt slowed down on public spending in the first two years. If he’d just kept on spending that money, we’d have gotten out of the depression quicker…

I think [that’s] an indication of what’s coming. Maybe not just an $825 Billion increase in the national debt for additional spending this year, but if the economy continues to sag over the course of the year, don’t be surprised—based on his comment about the 1930s—if President Obama [proposes] another increase in the national debt and another big spending package after this​

In other words, Obama thinks FDR's plan was a laudable start, but ultimately faltered because it didn't spend more money, sooner. I haven't seen similar accounts of Obama's remarks reported elsewhere, but if Lucas' recollection is accurate, shouldn't these comments be alarming to skeptics of the current stimulus package?

Jonah's excellent piece in the current edition of NRODT, and exhaustive analysis from the Heritage Foundation, make the case that the New Deal suffered from a number of major flaws. Its failure to pump out countless more government dollars at an even faster clip was not among them.

 

[shagdrum]

New Deal Never Solved Unemployment Crisis

New Deal Never Solved Unemployment Crisis

President-elect Barack Obama wants to blow at least $1 trillion, and probably more, on a New New Deal. Before he does, perhaps we should take a look at the real record of the Old New Deal on unemployment.

 

[shagdrum]

Get Over It: New Deal Didn't Do the Job
by William W. Beach and Ken McIntyre

"We have tried spending money. We are spending more than we have ever spent before and it does not work."

Sound like Rep. John Boehner of Ohio, or perhaps another exasperated Republican stalwart, lamenting President Barack Obama's inclination this week to try to spend our way out of the recession?

Listen again:

"I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises."

Sound more like a liberal Democrat -- say, Harlem's Rep. Charlie Rangel -- pushing Obama to "create" jobs?

How about this:

"I say after eight years of this Administration we have just as much unemployment as when we started. ... And an enormous debt to boot!"

Surely this must be House Speaker Nancy Pelosi denouncing the Bush administration's economic policies.

Wrong. Wrong. And wrong again.

The words came from none other than Henry Morgenthau Jr. -- pal, lunch companion and loyal secretary of the Treasury to President Franklin D. Roosevelt.

Morgenthau made this "startling confession," as historian Burton W. Folsom Jr. calls it, during the seventh year of the New Deal he helped FDR create to combat the rampant unemployment of the Great Depression.

It was May 9, 1939, and Morgenthau was appearing before powerful Democrats on the House Ways and Means Committee.

"In these words, Morgenthau summarized a decade of disaster, especially during the years Roosevelt was in power. Indeed average unemployment for the whole year in 1939 would be higher than that in 1931, the year before Roosevelt captured the presidency from Herbert Hoover," Folsom writes in his new book,"New Deal or Raw Deal?: How FDR's Economic Legacy Has Damaged America."


Indeed, Morgenthau confessed what so many keepers of FDR's flame won't admit: The New Deal failed. Massive spending on public works programs didn't erase historic unemployment. It didn't produce a recovery.

And neither will a "new" New Deal.

Some of the most desperate defenders of New Deal doctrine are getting a little shrill about this. But it's an important truth, nevertheless, especially because the same characters insist President Obama must push through a "bold" economic stimulus that depends on hundreds of billions in new government spending to create or "save" jobs.

Budget and financial experts at The Heritage Foundation caution that Obama ought not to repeat Roosevelt's mistakes. In one such effort, Heritage last week distributed a chart showing that FDR's programs didn't succeed in pushing unemployment below 20 percent.

Some observers -- not just hysterical big government junkies but also dispassionate policymakers and news editors -- took issue with the unemployment data. They cited lower numbers.

"Leading FDR slanderers," David Sirota hyperventilates on Huffington Post, "base their claims that unemployment during the New Deal didn't go below 20 percent by counting government workers as unemployed."

Sirota, who calls himself a "political journalist," adds: "And those claims are being echoed by right-wing rags like the National Review and fringe think tanks like The Heritage Foundation."

Ouch. If Heritage and our conservative principles are "fringe," then FDR's trusted Treasury secretary was what -- a duplicitous traitor?

What to make of a "journalist" who argues that folks on public assistance must be considered employed -- much less "government workers"?

For the record, Heritage plotted New Deal unemployment using widely accepted Census Bureau data (Page 6, Series D, column 10), the "official" numbers that were compiled at the time.

They didn't count Civilian Conservation Corps workers, prisoners or anyone else who got only "three hots and a cot" as a government employee. Neither does Heritage.

"f we counted people on work relief as employed," as George Mason University economist Alex Tabarrok writes, "then eliminating unemployment would be very easy -- just require everyone on any kind of unemployment relief to lick stamps."

So why the different sets of numbers?

Over the years, economists and academics working in good faith calculated "alternative series" of unemployment statistics in hopes of painting a more accurate picture. All begin with census data. The alternative numbers, generally showing somewhat lower levels of unemployment, are available from the Bureau of Labor Statistics.

Thing is, the statistics preferred by Sirota and other FDR acolytes still reveal the New Deal didn't drive pre-World War II unemployment below 17 percent in any year except 1937 (estimate: 14.3 percent).

These estimates (developed by economist Stanley Lebergott) show joblessness peaking at 24.9 percent in 1933, dropping over the next four years and -- under New Deal, Part 2 -- shooting back up to 19 percent in 1938. Unemployment then decreased to 14.6 percent in 1940 at the advent of a wartime economy and to 9.9 percent with America's entry into World War II the following year.

The point, as the chart shows, is that the alternative numbers track the census estimates in showing unemployment during the New Deal remained the worst our nation has seen. World War II ended the run.

The current recession likely will be deep. It could turn out to be more severe than any economic downturn since the Great Depression. Call it the "Great Recession." Still, the economy and financial markets are working through the difficulties, and eventually will stabilize and strengthen on their own.

Amid the current economic pain, Heritage has urged Obama and the new Congress to agree on a stimulus that actually will work by softening the recession and speeding recovery. Here's how:

• Extend the 2001 and 2003 tax reductions for as long as possible - at least through 2013 -- to prevent tax increases. Better yet, make the tax cuts permanent.
• Reduce tax rates on individuals, small businesses and corporations through 2013 by lowering the top rate by 10 percentage points and reducing rates by similar amounts for taxpayers with lower income levels.

Heritage's analysis shows this approach would mean 500,000 more jobs this year and a million jobs in 2010, on the way to creating 3.6 million jobs through 2012. Federal tax receipts would fall by $670 billion over five years.

These aggressive changes in tax policy, plus intensive activities by the Federal Reserve, are the best combination of federal actions to end or shorten a recession. In contrast, tax proposals being urged for the Obama stimulus would have almost no effect on the economy. House Democrats' plan for $550 billion in new spending, in part for infrastructure projects, would do even less for recovery.

Don't listen to Heritage if you don't want to. Listen to Henry Morgenthau: "We are spending more than we have ever spent before and it does not work."