Wednesday, July 29, 2009

FDR and BHO Comparisions

The July 6, 2009 issue of Time Magazine is titled 'What Barack Obama Can Learn from FDR.' For the future of America, hopefully Mr. Obama can learn a lot.

There have been plenty of comparisons. Both men entered office during an economic meltdown (FDR's far worse). Both men increased the power of the central government. Both men spent money like it grew on trees. Both men used the economic crisis they inherited to push a political agenda.

In the words of Rahm Emanuel, "You never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before."

Thus, the struggle for power begins.

The above political cartoon was published in the late 1930's. Kind of eerie, huh? Although it is 2009, all one would have to do is remove the cane and replace the initials FDR with BHO. Over 70 years later; the political landscape is being repeated.

After the stock market crashed in 1929, it wasn't until the early 1950's that the market regained it's pre-crash levels. For those of you that are mathematically inclined, that is almost 30 years of recovery. FDR, although he helped to establish many temporary and lasting programs, also prolonged the recovery of the Great Depression because of his insistence to involve the government. His statist approach to governance was a hindrance on progress and undermined the average American. As one editorialist from Indiana noted about the New Deal at the time, "Who is the forgotten man of Muncie? I know him as intimately as I know my own undershirt. He is the fellow that is trying to get along without public relief...In the meantime the taxpayers go on supporting many that would not work if they had jobs."

Now, the forgotten man is becoming more and more numerous as the government piles on program after program that will eventually be paid by us. The American people. The government doesn't split the bill. We do.

Between the years of 1935 and 1939, history shows us that FDR made a lot of harmful decisions that, in some cases, drove the Depression into a deeper hole. From 1933 to 1936 the federal budget rose from 6% to 9% of the GDP and after his election in 1936, FDR suddenly tightened the money being spent (a yank on the ball and chain) which caused the Depression Within the Depression from 1936-1937. In order to correct this mistake, FDR raised tax after tax on the citizens and businesses. In order to pay for these high taxes, many companies stopped spending and started saving. FDR, who was angered by this savings, decided to implement profit taxes on top of the already existing corporate taxes.

To sum it up, FDR was water boarding the American economy. Thus, the "recovery" continued.

On top of the taxes and habitual spending, the National Recovery Administration (another creation of the New Deal) promoted wages that employers couldn't pay. Congress also wanted to see higher wages and the outcome resulted in yet another rise in unemployment. Essentially, and this is something that we will find with the Obama Administrations bailout and stimulus, the government programs that were created did not amount to much in the way of recovery because those programs disappeared when the government stopped funding them. Our billions, maybe even trillions, of dollars were spent in order to push an agenda. Nice, huh?

FDR, when he was a Senator and the Secretary of the Interior, wasn't such the Statist. But, it must be mentioned that all politicians are to some degree. Upon entering the Office of President, FDR made a 180 degree turn. He grew government to levels never seen before. He tried to stack the Courts with judges that would manipulate legislation and the Constitution in favor of his statist agenda that would eventually stunt the growth of America until the beginning of World War II. If it wasn't for WWII, where would we be now? How would FDR be viewed? Would he be seen as a skilled politician of the Great Depression or a power-hungry, Money Pit?

Maybe the answer lies in the Obama presidency...

During his 1937 inaugural address, FDR told the nation that the government was now turning into an "instrument of unimaginable power."

The mindset hasn't changed. Neither have our problems.

Our leaders haven't learned from our nation's history. And before long, that's what will become of the once democratic republic known as the United States of America...


(Shlaes, 2009)

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"If an American is to amount to anything he must rely upon himself, and not upon the State; he must take pride in his own work, instead of sitting idle to envy the luck of others. He must face life with resolute courage, win victory if he can, and accept defeat if he must, without seeking to place on his fellow man a responsibility which is not theirs." - Theodore Roosevelt