Quote of the Day: "History doesn't repeat itself, but it does rhyme." -- Mark Twain

Subject: Educate the Powerful!

Mark Twain was right. History doesn't repeat itself, exactly, but often the present does rhyme with the past.

Sadly, the evidence for this is now all around us.

Too much of what the politicians are currently doing rhymes too well with what the politicians did during the Great Depression.

Then, as now, the politicians blamed the economic downturn on the free market. They were wrong then, and they are wrong now.

The government caused the Great Depression. Even Ben Bernanke, the Chairman of the Federal Reserve, agrees. Here's what he said at the celebration of Milton Friedman's 90th birthday in 2002 . ."I would like to say to Milton (Friedman) and Anna (Schwarz): Regarding the Great Depression. You're right, we did it."

 Predictably, government schools don't teach this view. Instead, they teach that . . .

The depression became Great because President Hoover was an advocate of laissez-faire economics who did nothing to intervene. In fact, Hoover was the first president to ever make major interventions in the economy.

The economist Bryan Caplan lists 21 Hoover interventions.

Another economist, Murray Rothbard, has described how President Hoover was the true creator of the "New Deal" approach for which FDR later claimed dubious credit.

Caplan and Rothbard are not alone in this. Roosevelt aid Rexford Guy Tugwell was to say years later . . .

“We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started.” (Source: Paul Johnson, A History of the American People -- New York: HarperCollins Publishers, 1997, p. 741)

Even FDR himself agreed that Hoover had intervened, he just disagreed with the interventions. During the 1932 presidential campaign Roosevelt repudiated Hoover's meddling, saying . . ."The doctrine of regulation and legislation by 'masterminds' ... has been too glaringly apparent at Washington during the [Republican administrations]."

And during the 1932 presdiential campaign Roosevelt constantly criticized Hoover for his huge deficits, promising instead . . .

* "immediate and drastic reductions of all public expenditures"
* "abolishing useless commissions and offices, consolidating bureaus and eliminating extravagances"
* "reductions in bureaucracy"
* Implied tax cuts
* And a "sound currency to be maintained at all hazards."

We aren't taught that Roosevelt promised these things. Instead, we're taught that FDR's heroic interventions saved the free market from itself.

But what did his interventions actually achieve?

* The depression became Great under FDR's guidance.
* It lasted more than a decade.
* Prosperity never returned while he was President.
* The economy only recovered after Roosevelt was dead and buried

Even FDR's own economic team knew that his New Deal interventions had been a complete failure. Here's what FDR's Treasury Secretary, Henry Morganthau, admitted to Congress in May, 1939 . . .

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. 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!" 

It's significant that Hoover and Roosevelt were the first to intervene in the economy. Previous downturns had always been allowed to run their course, lasting from a few months to a couple of years. But the first one the politicians tried to stop is the one that lasted more than a decade, and that really hit hard.

If government intervention worked, then why did the 1929 depression become Great, when none had before?

It ought to make you angry. The injustice is so clear. The politicians caused the problem, blamed it on the free market, and then benefited from the disaster they had created by grabbing vast amounts of power and money.

And now it's happening again. History, sadly, is rhyming.

We're being told that the economic downturn resulting from the housing bubble is a market failure, and that massive government intervention is needed in all directions. But the truth is this . . .

* Government housing policies and easy credit from the Federal Reserve caused the housing bubble.
* Companies and individuals who made bad decisions based on these policies should pay the full price for their mistakes
* None of them should be rescued
* The politicians should not intervene

In short, the politicians should stop pursuing policies that rhyme with those pursued during the Great Depression.

In addition, the advocates of Big Government should be asked . . .

* Why, precisely, was the first economic downturn in which the government intervened the only one that became so bad that it earned the name of the Great Depression?
* And why is it, precisely, that the major areas of American life where the government has intervened to make things more affordable -- such as health care, higher education, and housing -- are exactly those areas where costs have risen the most?

Government intervention does not work. It does not make things more affordable, it makes them more expensive. It does not prevent economic downturns, it causes them, and deepens them.

Please use our Educate the Powerful System to tell your elected representatives to stop the bailouts, NOW.

And then do something to make them smarter . . .

Paste this Dispatch into the section for your personal comments and send it to them. Maybe there are a few Congressional staffers who will learn something.

Thank you for being a part of the growing Downsize DC Army.

Perry Willis
Communications Director
DownsizeDC.org, Inc.

Technorati Tags: Downsize DC  bailout  FDR  Great Depression 

  Posted by James Leroy Wilson at November 13, 2008 - 11:02 AM | Wealth & Poverty  |  Government Failure  |  Downsizer-Dispatch
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4 comments

The FRB

Great article although it seems to miss a strong portion of the puzzle. It's not the government alone, but another private organization you mention; The FRB. They are immensely ingrained in what's happening financially and since they control our dollar it could be argued they are patient zero of this crisis and others.

By JZahz at November 13, 2008 03:45 PM (EST)

Educate girls to curb growing population

Education promotes a shift from the quantity of children in favour of the quality of children. This transition reduces the future number of people using environmental resources and enhances the capacity of individuals and societies to cope with environmental change
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Raaj
Drug Intervention Virginia

By Raaj at January 17, 2009 07:05 AM (EST)

Educate the very Powerful

Hi,this is an very good article and more informative to the youths in the future and also need more information about this.
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Austin

Drug Intervention Florida

By AUSTIN at March 14, 2009 10:18 AM (EDT)

South Carolina

We all know that every politician who is campaigning is full of promises. That's why there is no doubt that every time they've already proceeds in their position we all hopes for good leaders as what they've portrayed. But where are the jobs and economic stability? The Legislators have been laying the smack down on the payday loan industry in South Carolina lately. However, today it appears they might be willing to ease up a bit. The regulations moving through the Senate included a provision that limits the total amount of a payday loan to 25 percent of the person’s income. South Carolina, along with California, Michigan, and Rhode Island, has the doubtful distinction of having over 10% unemployment. The Palmetto State is also in the midst of a battle over payday loan regulations, as they are trying to define the payday loan limit. The limit was already capped at $500, but an additional limit of 25% of a person's monthly income (gross or net pay going undefined) is a proposed addition to the bill. The payday lending industry has argued that it is placing too many restrictions on their business. Legislators insist more work will be done on their part for regulating legitimate business in South Carolina . Let’s just hope that these politicians are truly humanitarian not monetarist!

By DevinB at March 31, 2009 04:26 AM (EDT)

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