Across the board tax cuts, less tariffs, and Less regulations...
Then came the Great Depression, which was mostly a monetary disaster - which President Hoover made worse with the Smoot-Hawley Tariff Act of 1930, which helped destroy international trade. During the recession of 1928, the Federal Reserve Board severely cut the money supply. The discount rate to banks was increased from 3.5?o 6?from January, 1928 to August, 1929. By slashing the money supply and cutting off the lines of available credit, the economy contracted.
The investors reacted to the bill, and added with the slashing of the money supply, the market became unstable and over a three day period in October 1929, the market crashed… Added with the Fordney-McCumber Tariff of 1922, which destroyed the agricultural economy, it’s easy to see how the Great Depression was started by poor choices and not the free market or deregulation, as some crazy liberals will say.
The New Deal itself failed. New Deal policies like the National Industry Recovery Act of 1933, instituted “codes” to limit competition in business. Businesses were forced to cut output, so they could maintain high prices and wages. Businessmen who cut prices were cajoled, fined, and sometimes arrested. Fortunately, NIRA was struck down by the Supreme Court in 1935…
Other polices all did what the NIRA did. A good example is the Agricultural Adjustment Act of 1933. It slashed production to increase and maintain high prices and wages. Other acts made the cost of employment incredibly high, such as the Davis-Bacon Act, or the increase on Social Security, which increased the cost of compensations.
All of these policies also included high tax hikes, high regulations on business, and increased spending. These policies all lead to high unemployment and an increased burden to families. Many liberals talk about how FDR helped people, but what good is help, when the majority of the nation needed more than help. It needed economic help and recovery, which never came…
New Deal interventions were not only bad for the economy, but favored fat cats over average families. Most farm subsidies went to major land owners, not small-time farmers. Required reductions in farm acreage devastated poor sharecroppers. Efforts to keep farm prices high led to the destruction of food while millions of families went hungry. Compulsory unionism led to discrimination against blacks because it gave monopoly power to union bosses who often didn’t want them hired. NIRA cartels prevented entrepreneurs from cutting prices for consumers. Roosevelt’s strategies of handouts, federal jobs, subsidized loans, demonizing businesses, and public works projects in swing states worked well politically. But economically, Roosevelt and his “brains trust” had no idea what they were doing. They attempted one failed intervention after another. The Great Depression was a disaster, and sadly an avoidable one.
Henry Morgenthau, Secretary of Treasury for FDR, said once. He said -
“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 now if I am wrong somebody else can have my job. I want to see this country prosper. 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 enormous debt to boot.”
- Henry Morgenthau, FDR’s Secretary of Treasury… (1941)
One of Roosevelt’s top advisers, Rexford Guy, even said “We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started.”… What this man is saying is that the New Deal got its main ideas and policies from Hoover’s own disastrous programs!
I hope this helps, some teachers might disagree with you, until you tell them of the recession of 1921 - which ended quickly without government intervention. Not to mention the fact that the Great Depression lasted 7 years, despite the New Deal...
Answered By: Albert - 2/8/2010 |