April 12, 2010

Great Depression Ended Because Roosevelt Died and Couldn't Extend It

That's the soundbite take-away from this WSJ article that runs counter to the great liberal myth that make-work government programs do anything other than prolong economic downturns and stifle the prospects for recovery.

FDR had every intention of ramming through "New Deal II," and after he expired, Truman asked Congress to carry out his wishes.

Congress said "no" and instead undertook strategic tax cuts that spurred the private sector growth that finally pulled the nation out of the Roosevelt-lengthened Great Depression. That's something to keep in mind as we head into 2010.

The President can propose any budget he wants, but it is ultimately Congress that makes the laws and has the power to cut taxes and repeal or de-fund bloated federal spending.

If we want to power our way out of our current economic malaise, our best course of action is to elect fiscally responsible representatives that favor cutting bloated federal programs and taxes, no matter which party they represent.

Posted by Confederate Yankee at April 12, 2010 12:10 PM

The main thing we must learn about the great depression is how it happened. Many controls were put into place for our economy to help lessen the effects of a depression or even a recession. But when those controls were dismantled or even ignored look what happened. We found ourselves in the midst of another great economic collapse.

Furthermore if you look at the countries that were climbing out of the great depression before the war they all did that through government creation of work and by restricting the free markets.

The free market system is not an efficient system as well and does need some checks and balances to help lessen the ups and downs.

Posted by: JAB at April 12, 2010 01:39 PM

Even though FDR tried a public works program and other subsidies to try and restart the economy he also tried to keep a balanced budget as well. Some economist say this fact alone only hindered FDR's programs and if FDR would have spent more during the worst years then it would have done a lot more to get the US out of the great depression earlier. Once the world war broke out then the US government started pouring much more money into the economy in the name of national defense.

An example of this was the country of Sweden which fully embraced Keynesian economics during the great depression and was one of the first countries to emerge from it before the war.

Posted by: JAB at April 12, 2010 01:53 PM

Post World War II economic success was due in large measure to the Marshall Plan, and to the fact that European countries did not have to spend much on defense, because the U.S. was providing most of that.

It was not due to government control in their economies.

Governments can print currency, and ensure stability and fairness by enforcing contract law and promoting competition. Beyond that, governments usually hinder the economy.

Posted by: MKS at April 12, 2010 02:18 PM

You are wrong. Period. Government is distructive. It does not create a single thing and is as inefficient as can get. The two societies you are referring to in the pre-war period are Germany and the USSR, enough said. Other than the fact that when Stalin and Hitler wanted fewer mouths to feed, they just killed them.

The other economies in the world recovered in the classic manner of a typical downturn, except for the US. What was unique about us was the interference of FDR and his group. There is very good reason to believe he intentionally manipulated the economy to keep it is the hole. This was not corrected until about 1952, well after his death and after the Repubs had been able to bring some sanity to the government.

A good book on this is "The Forgotten Man". Caution, it will make your blood pressure go up.

Also, consider that Obama and group are doing everything in their power to distroy our system. This could not be more clear, Why?

Posted by: David at April 12, 2010 02:42 PM


Sorry but if you just look at the history of the great depression you will see the governments that came out of it the soonest were governments that spent money to generate jobs, which is what Keynesian policy dictates. Sweden was foremost among them and Germany as well.

As for the Republican policy why does it seem that we have major economic issues when this party happens to be in control?

As for MKS we are on the subject of the great depression which was before World War II not after so your comments clearly do not apply here.

Posted by: JAB at April 12, 2010 04:40 PM

JAB - Your comments clearly do not apply either. You know little of what you are espousing about emerging from the depression or the economic growth leading up to and as a result of WWII, or the impact of Keynesian economics. Lots of good books out there on FDR/Great Depression, etc... Open your mind and eyes and seek and you will find. Clearly not enough space to educate you here.

There is a second point which always blows you and your liberal friends out of the water. Libs like you always like to compare the USA with a Sweden, a Denmark, a France or even Germany - but the great flaw is the HUGE difference in the size and diversity of the countries - which has an even BIGGER impact on the application of social control economics. The USA is 3.794 million square miles compared to 173,000 square miles for Sweden(thats 22x bigger), and the U.S. population is 33x larger, and VERY diverse compared to a totally homogeneous population in Sweden. This applies in 1929, 1934, and 1945 and even today in 2010. Comparing the USA to Sweden is like comparing a battle ship to a dinghy. Nice try, better luck next time trying to sell that old, failed socialism system.

Posted by: mixitup at April 12, 2010 05:40 PM

JAB - The government ran consistent budget deficits under Roosevelt during the 1930s. Spending rose continuously except for a brief drop in 1937 and 1938. If you contend the formula worked for Europe, why did it not work here?

You are just flat out wrong. Check your data.

Posted by: daleyrocks at April 12, 2010 05:41 PM

Oh, I see, we edit out the posts that call you revisionist kooks.

And we mark progressive blogs as "questionable content".

Insecure much?

Posted by: CJ at April 12, 2010 07:15 PM

I don't think you have any idea about what you are commenting on. Get out of Wikipedia and read a book.

Posted by: David at April 12, 2010 07:38 PM

Since you like Wikipedia so much, try this one on for size.
Interesting that this depression only lasted 1 and a half years, considering how bad it was. And why was that? Maybe it was Harding's response to it? Shrink Government, cut spending, tax cuts, etc. Compare that to Roosevelt's response, and how long the Great Depression lasted. Yep, sure is interesting.

Posted by: Jim at April 13, 2010 05:54 AM

Jim - From reading that article, it looks like that depression lasted 7 months, which is much shorter than the span from the beginning of the Great Depression and FDR taking office (over 2 years). Wouldn't it be fairer to compare Hoover's response with Harding's rather than Roosevelt's?

I do see the part of the article that talks about Harding's response of non-influence being a positive factor, but I also see that it's an argument made by only one scholar and not necessarily a consensus.

Posted by: Jefff at April 13, 2010 08:26 AM