Nothing in life is to be feared.
It is only to be understood.
Marie Curie
Image of the Day
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| Via Lew Rockwell |
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| Via IPI |
Ryan Manning, the groom, dances with his 61-year-old Mary Anne, a dying breast cancer victim, 3 days before her death.
Entertainment Potpourri: PBS' "The Roosevelts" Part 5: Some Notes
This segment basically covers FDR's first two terms as President, notably the New Deal and foreshadowing the rise of the Axis Powers, with FDR portrayed as a committed interventionist trying to push a nation in no mood to get involved in another bloody European war. (To be honest, Burns does make it clear that FDR knew that he hadn't even convinced his own Congressional leadership on the latter, never mind the "isolationist" general public.)
Burns credits the New Deal with halving unemployment in his run-up to the 1936 election and includes gushing anecdotal letters of citizens to FDR, attributing their better fortune to his policies. I found his treatment of the 1936 election unsatisfactory; he basically shows a clip of FDR mocking Landis, the GOP candidate, as basically an unprincipled politician not against the New Deal programs but simply a more efficient, effective administrator. He portrays FDR as being squeezed on the right by the American Liberty League prominently represented by, yes, Al Smith (see my earlier review) and on the left by legendary populist Huey Long pushing redistribution, before an assassin cut Long down. FDR tried to co-opt the leftist malcontents by adding another steep progressive income tax increase on top of Hoover's, push social security, etc. (I've seen alternate twists on an alleged Long candidacy, thinking his real intent was to push a Bull Moose-like sacrificial candidate to split the progressive vote with FDR, allowing Landis to win the 1936 election; Long would then file for the 1940 Democratic nomination.) However, there was no right-wing (or classically liberal) challenge in 1936, presumably because of the common-held prejudice, still maintained by mainstream historians, that laissez-faire economic excesses "caused" the Great Depression.
I still maintain that one has to view conservatism within the context of a tradition (see my FB Corner comment below), including the liberal tradition. I, in fact, consider myself a classical liberal but also a conservative, but many, like Don Boudreaux, bristle at being called a conservative or right-wing. Riggenbach does more or less the same in this piece. He sees the political context as bipolar between Hamiltonian centralism (right-wing/authoritarian) and Jeffersonian liberalism. He points to Hoover as having acted in the Hamiltonian tradition:
The Great Depression was underway in 1932, of course — it had been for three and a half years. Around a quarter of the workforce was out of work, banks were failing, times were hard. And President Hoover had only made matters worse. Flynn saw the "Hoover New Deal" as an effort to virtually nationalize the US economy, an effort "to organize every profession, every trade, every craft under [government] supervision and to deal directly with such details as the volume of production, the prices, the means and methods of distribution of every conceivable product."He saw the 1932 Dem platform as consistent with classical liberalism:
- An immediate and drastic reduction of governmental expenditures by abolishing useless commissions and offices, consolidating departments and bureaus and eliminating extravagance, to accomplish a saving of not less than 25 percent in the cost of Federal government.…
- Maintenance of the national credit by a Federal budget annually balanced .…
- A sound currency to be maintained at all hazards.
I accuse the present Administration of being the greatest spending Administration in peace time in all American history — one which piled bureau on bureau, commission on commission, and has failed to anticipate the dire needs or reduced earning power of the people. Bureaus and bureaucrats have been retained at the expense of the taxpayer.… We are spending altogether too much money for government services which are neither practical nor necessary. In addition to this, we are attempting too many functions and we need a simplification of what the Federal government is giving to the people.And this:
Toward the end of the campaign he cried: "Stop the deficits! Stop the deficits!" Then to impress his listeners with his inflexible purpose to deal with this prodigal monster, he said: "Before any man enters my cabinet he must give me a twofold pledge: Absolute loyalty to the Democratic platform and especially to its economy plank. And complete cooperation with me in looking to economy and reorganization in his department."Now about this "incredible" thing FDR did, by halving unemployment 7 years into the Depression: here are some figures on GDP drops/recoveries in Europe, and some figures on US GDP. Note that GDP had nearly dropped by half by the end of 1933, and we never got back to 1929 GDP until 1941, well after other countries, exacerbated by policy errors that let to a recession around 1937 (resulting in sharp GOP gains in the 1938 election). The US had gone through multiple depressions with more rapid recoveries without megalomaniac policies; what FDR had done was effectively put Hoover's interventionism on steroids, abandoning long-standing Democratic Party principles.
What I didn't hear Burns cover was FDR Treasury Secretary Henry Morgenthau's (architect of the New Deal) 1939 testimony. Here are some key quotes:
- “We have tried spending money. We are spending more than we have ever spent before and it does not work.”
- “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.”
- “I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot!”
In any case, the statistics preferred by such New Deal acolytes as University of California historian Eric Rauchway reveal that FDR’s policies didn’t drive pre-World War II unemployment below 17 percent in any year except 1937 (estimate: 14.3 percent).[There is an arcane discussion of differing unemployment numbers over some government distributions where progressives want to portray recipients of certain government handouts as employed. Imagine the gimmickry if you had food stamp recipients, say, stuff envelopes for an hour and call them "government employees".]
Finally, I want to point out an essay by one of my favorite economists, Tom DiLorenzo:
"Real gross domestic product per adult, which was 39 percent below trend at the trough of the Depression in 1933, remained 27 percent below trend in 1939," [UCLA economists Harold L. Cole and Lee E. Ohanian] write. And, "Similarly, private hours worked were 27 percent below trend in 1933 and remained 21 percent below trend in 1939."
This should be no surprise to anyone who has studied the reality of the Great Depression, for US Census Bureau statistics show that the official unemployment rate was still 17.2 percent in 1939 despite seven years of "economic salvation" at the hands of the Roosevelt administration (the normal, pre-Depression unemployment rate was about 3 percent). Per capita GDP was lower in 1939 than in 1929 ($847 vs. $857), as were personal consumption expenditures ($67.6 billion vs. $78.9 billion), according to Census Bureau data. Net private investment was minus $3.1 billion from 1930–1940.
"The monetary base increases more than 100 percent between 1933 and 1939," the authors write, making the case that such a "monetary shock" should have returned the economy to normalcy. But as Murray Rothbard showed in America’s Great Depression, it was the easy money policies of the early and mid-1920s that created all the malinvestment that was the trigger for the Great Depression. the Fed increased the monetary base by 100 percent in five years, causing more of the same overcapitalization problems that were the source of the problem in the first place.
Cole and Ohanian apparently emerged from the rarified world of macroeconomic model building for a long enough period of time to discover that the so-called First New Deal (1933–1934) was one giant cartel scheme, whereby the government attempted to enforce cartel pricing and output reductions in hundreds of industries and in agriculture.
FDR and his advisors mistakenly believed that the Depression was caused by low prices, therefore, high prices—enforced by threats of violence, coercion and intimidation by the state—would be the "solution." Moreover, it is hardly a secret that if less production takes place, fewer workers will be needed by employers and unemployment will subsequently be higher.
FDR’s tripling of taxes, his regulation of business, and his relentless antibusiness propaganda also contributed to a worsening of the Great Depression, but his labor policies were probably the most harmful to the employment prospects of American workers. The union/nonunion wage differential increased from 5 percent in 1933 to 23 percent by 1940. Newly-enacted Social Security payroll and unemployment insurance taxes made employment even more expensive. What all of this means is that during a period of weak or declining derived demand for labor, government policy pushed up the price of labor very significantly, causing employers to purchase less and less of it.
Higgs showed that it was the relative neutering of New Deal policies, along with a reduction (in absolute dollars) of the federal budget from $98.4 billion in 1945 to $33 billion in 1948, that brought forth the economic recovery. Private-sector production increased by almost one-third in 1946 alone, as private capital investment increased for the first time in 18 years. In short, it was capitalism that finally ended the Great Depression, not FDR’s harebrained cartel, wage- increasing, unionizing, and welfare state expanding policies.Just a final comment about the economically clueless National Recovery Administration, economic planning and Big Business collusion on steroids, eventually struck down by SCOTUS:
The NRA negotiated specific sets of codes with leaders of the nation's major industries; the most important provisions were anti-deflationary floors below which no company would lower prices or wages, and agreements on maintaining employment and production. In a remarkably short time, the NRA won agreements from almost every major industry in the nation. According to some conservative economists, the NRA increased the cost of doing business by forty percent.A parting related note by FDR's morally unconscionable attempt to pack the Supreme Court, which struck down some of FDR's pet programs. [I have often ranted against Carolene Products and the infamous Footnote 4, which all but abdicated defense of economic liberty while largely accepting legislative discretion unless deemed "unreasonable" with some limited politically correct exemptions. In essence, SCOTUS folded like a cheap suit after FDR's assault on them. Burns points out FDR was eventually able to replace all the principled jurists (not in those terms), but the damage was done by unmentioned Carolene Products, which made the growth of federal government inevitable.] This resulted, as George Will noted, in a Southern Democrat-GOP conservative coalition which stymied the progressives until the LBJ landslide era.
Facebook Corner
(Illinois Policy Institute). Two business policy issues relate directly to a state’s ability to attract good manufacturing jobs: Right-to-Work policy and workers’ compensation policy.
Illinois is the worst in the region on both issues, which might explain why the state's manufacturing jobs are disappearing.
Cost of living and cost of operations are also higher in Illinois which can force low margin or price competitive businesses out.Not really. For one thing, I've seen one survey (Sperling) that puts COL at slightly under the national average. For another, it depends on discretionary income; for example, and Illinois has had higher than average household income.
But Mercatus judges Illinois #45 in terms of regulatory policy and individual liberty; it notes that the public employee pension system is out of control; it already outspends all but 3 states, and the debt burden is nearly a quarter of personal income.
(Voluntary Virtues Network). What is everyones thoughts on this bell curve?
Several issues. First, I don't see classical liberals (including Locke) as that different from the libertarians. Second, I think it's more useful to distinguish individualism vs. collectivism and decentralization vs. centralization of authority. Conservatism I see as more concerned with unintended consequences of activist policies challenging social norms/constructs, including markets. It must be seen in the context, say of a liberal tradition. Thus, for instance, a conservative may oppose positive rights (e.g., redistributive policies) as morally corrosive and contrary to the moral development of autonomous individuals.
(Drudge Report). Public University Requires Students to Submit Their Sexual History...
This is a violation of the First Amendment, including anonymous speech. It is also not related to any legitimate educational goal, and self-report measures are notoriously questionable from a validity standpoint. I remember when I did my dissertation, I had to get my (unrelated) dissertation measure approved by the Committee for the Protection of Human Subjects, and they required a disclaimer noting participation was completely voluntary--and I did not ask a single personal question in the measure. I don't know how this protocol would ever pass research protocols, never mind get mandated by federal/university policy. Unless participation is made voluntary, I see it as a violation of professional ethics.
Proposals
Political Cartoon
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| Courtesy of the original artist via IPI |
Barry Manilow, "Daybreak"
