When most
people think of the Great Depression, black and white images of a dust-covered
landscape and scrap shacks swirl in their minds; words like “dust bowl” and
“stock market crash” are conjured on our lips. But is that really all the Great
Depression was? When you ask someone about Franklin Delano Roosevelt, most
people think of the hero who overcame polio to lead a nation against the
fascist Reich, not a young Assistant Secretary of the Navy-turned-President of
the United States
that struggled to pull his country out of the Depression with questionable
means. History is written by the victors, but this author will attempt to read
between the lines of our history to discover the consequences of the Great
Depression, and of President Roosevelt’s “New Deal”.
First, the
Great Depression. Most people say the Great Depression began in October 1929,
with the stock market collapse, but most economists point out the economy had
entered a technical depression as much as six months earlier. (Nelson, 2008)
This started a domino effect across the globe, since the U.S. was a major financier and creditor for Europe’s war debts following WWI. Because of this, many
nations sought to protect their domestic production by imposing new and raising
existing tariffs and setting caps on foreign imports, among other things. All
this succeeded in doing was to reducing global trade and its value to almost
half of what it was in the 1920s. This angered many nations abroad, especially Great Britain and Germany, two nations who had
unemployment as high as 25%. This anti-American sentiment allowed a charismatic
young war hero named Adolf Hitler – an Austrian, no less – to become appointed
as Chancellor of Germany. Another consequence of the Depression was the shift
in public opinion regarding economic prosperity. Americans in the 20s believed,
as had their predecessors, that success came not from government intervention,
but through the ingenuity of the private businessman. This was thrown out the
window as the Depression lingered: Americans began to look to the Federal
Reserve Board and the government to fix the problem. With some states like Wyoming, the Dakotas and Arizona receiving as much as $700 per person
in so-called ‘federal aid’, and government programs springing up like the
Tennessee Valley Authority, people thought we could spend our way out of the
Depression. This ideological lunacy was encouraged by our newly-elected
president, Franklin Delano Roosevelt, or FDR.
Herbert
Hoover, president at the beginning of the Depression, said if the government
left the economy alone, it would right itself. But the people of the U.S. were getting impatient, so when a new face
came on the scene, claiming that the government was here to solve our problems
and Hoover was
simply cold and uncaring, people flocked to him in droves. This new face was
FDR. Remaining very vague on his campaign, Roosevelt
never put a real plan forward, but simply agreed to any plan Congress or his
advisors came up with. (Wilkinson, 2008) FDR had little-to-no experience in the
economic or business realms, but didn’t seem to have an interest in attempting
to amend that. He was more or less a slightly veiled socialist, surrounding
himself with Harvard Law School
associates, a Columbia
professor and Supreme Court justice, and – his most influential economic
advisor – was Harold Laski, a London School of Economics professor, and noted Labour
Party Marxist. (Engdahl, 2005) FDR’s “New Deal” was actually taken from Stuart
Chase’s bestseller by the same name, in which Chase laid out his theory that
the capitalist system that pulled Europe out
of Feudalism was dead and gone, and we needed to give into the Bolshevik-style
“central planning”. This book was highly esteemed by FDR and his advisors, and
played a large role in devising his administration’s economic policies. This
was quite alarming to America’s
businessmen, and when a gutless Congress did nothing but rubber-stamp FDR’s
bills through, acts like the National Industrial Recovery Act (NIRA), and the
Agriculture Adjustment Act (AAA) destroyed what little progress the American
free market had created.
Chase’s New
Deal philosophy also led to the formation of Roosevelt’s
lasting political legacy: Social Security, and eventually Medicare and
Medicaid. We are still dealing with these failed programs to this day, since no
one safeguarded the funds that were supposed to pay for them, making them in
effect what Texas
governor Rick Perry called them: a ponzi scheme.
In short, the Great Depression was the
result of a plethora of mistakes, oversights and miscalculations, and FDR’s New
Deal nearly destroyed our already-damaged economy. In the words of economist F.
William Engdahl, “[h]ad Roosevelt not ended
his Presidency as a victorious war President, he would instead be remembered as
the President whose policies all but ruined the inherent economic vitality of
the American economy for decades after.” (2005)
References
Engdahl, F. William. (2005). Some unconventional reflections on the Great
Depression and New Deal. Geopolitics - Geoeconomics. Retrieved November 6,
2011 from http://oilgeopolitics.net/History/New_Deal/new_deal.html
Nelson,
Cary. (2008). The Great Depression. Modern American Poetry. Retrieved
November 6, 2011 from http://www.english.illinois.edu/maps/depression/about.htm
Wilkinson,
Kyle. (2008). The Great Depression and New Deal: 1929-1940s. Retrieved November
6, 2011 from http://iws.collin.edu/kwilkison/Online1302home/20th%20Century/DepressionNewDeal.html
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