FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression [Englisch] [Gebundene Ausgabe]

A common historical misconception is that FDR's New Deal rescued the United States from the Great Depression. However, Cato Institute Historian Jim Powell argues that the New Deal exacerbated and elongated the Great Depression. With impressive attention to detail, Powell examines the long-term results of the New Deal and persuasively argues that they crippled the U.S. economy.

In this detailed book, you will learn about the numerous programs the FDR administration brought about, including the following:

* Programs that inundated private businesses with unprecedented waves of regulations, such as the Agricultural Adjustment Administration, the National Recovery Administration and the Securities and Exchange Commission.

* Programs that redistributed wealth from producers to consumers, such as the Federal Emergency Relief Act and the Reconstruction Finance Corporation.

* Programs that nationalized industries, centrally planned infrastructure or created make-work projects to increase employment such as the Civilian Conservation Corps, the Public Works Administration and the Tennessee Valley Authority. Powell argues that these programs typically led to poorly planned infrastructure that was more expensive than what could have been acquired in a free market.

The economic results of FDR's programs were devastating. For example, consider the Agricultural Adjustment Administration (AAA). The price and production controls of the AAA led to perverse practices such as millions of tons of domestic oat and corn being burned while the U.S. simultaneously imported oat and corn, millions of peaches being left to rot and millions of "excess" pigs being needlessly slaughtered while lard was being imported from overseas. The extent of economic regulation under the FDR Administration reached such absurd levels, there was even a government board organized solely to control the production and pricing of milk!

This book will also detail the oppressive controls on income and wages under the FDR administration. Under FDR, scores of private sector jobs were eliminated through minimum wage laws, personal income taxes hit 79% for certain brackets and how government spending during FDR's first two terms exceeded the total amount of Federal spending in the prior history of the United States.

Powell reveals how all of FDR's programs are based upon the fatally flawed premises of Keynesian economics, including the following:
* That government spending is always good for the economy, even if it is engaging in pointless ventures such as building pyramids.
* War is good for the economy.
* Gold (as a standard of currency) is a "barbarous relic" that prevents economic growth.
* A capitalist economy will inevitably slow to a halt without periodic bolsters from centralized planning.
* Consumption (i.e., the destruction of wealth) not production, drives the economy. Thus, government should redistribute wealth from those who would invest it to those who would spend it.

From reading this book, you will also learn that many of FDR's earliest programs, such as the AAA and the National Recovery Act, were originally ruled as unconstitutional by the U.S. Supreme Court. Unfortunately FDR stayed in office long enough to appoint 7 of the 9 sitting supreme court justices, which eventually opened the floodgates for New Deal reforms. Thus, is the unforeseen danger of having a President serve more than two terms.

Powell has done a fantastic job with this work. I am not surprised that FDR's Folly has been enthusiastically recommended by famed free market economists such as Milton Friedman and Thomas Sowell. I highly recommend this book for anyone interested in free market capitalism and learning the real history of the Great Depression.

We see the horror that Progressives have done, and now are doing again, this is a book that maps it out.....how the so called good intentions which are being done by Obama are really prolonging the recession and making it deeper. It shows the arrogance of Obama thinking that he knows best for Americans and should be making our choices. It shows that Big Gov't takes away our freedoms and retards our ability to grow as a country.

(Note: I own and have READ all of this book) (...)
Short review:
A heavy read for us simple bears, written by an accomplished academic. It's bursting full of information, and very thought provoking. I like the lay out of the contents, where each of the 19 chapters asks a question, so you know what you are getting into. A must read for anybody willing to seriously set aside prejudices, and look at the underlying facts of FDR's often bizarre and haphazard "experimenting" with the US economy. I urgently need to go read an admiring book (any suggestions?) written by somebody who thinks FDR was a great president, because the more I read about him, I increasingly get the impression he was somewhat of an "economically uninformed klutz" and basically just a shrewd and manipulative bluffer. Who,behind the rhetoric and the "fireside chats" didn't give a hoot about anybody except (votes for) himself. Who only got saved by the distraction of the "crisis" (he provoked?)of Pearl Harbor and WW2. And whose policies and shadow haunt us to this day.
(Sorry, apologies to FDR lovers; I have looked at the dissenters' comments, who absolutely hated this book, and I AM shopping around for some PRO-FDR books. Let's check out the opposition's story...) (Bernanke's essays?)

Long review:
I put the book down a few times, and read other stuff. I went back to it again, and eventually finished it. That tells you either that I'm a dimwit who struggles with words with more than two syllables, or that it's just highly concentrated, heavy-heavy-heavy, with constant new names, dates and places, and lots of leafing back and forwards to follow the plot. Well worth it though. Some quotes for you, to get a taste of the goodies:
(page 57) "A major effect of deposit insurance was to transfer the cost of bank failures from depositors to taxpayers. The full consequences of federal deposit insurance didn't become apparent until the 1980's, when bailing out savings and loan associations cost $519 billion."
(Page 71) "FDR imagined he could fix the world gold price from his bedroom"
(page 75) "From the very beginning of his administration, FDR attacked investors and employers". This theme shows up clearly throughout the whole book.
(page 75) "The business community... was pitifully inept when FDR launched his moral crusade against free markets." FDR certainly interfered with the free markets, but he did so haphazardly, and seemingly on an ad-hoc,improvised, "Hey! Let's try THIS idea" experimental basis. The man, if nothing else, was remarkably high handed and conceited, it seems to me.
(page 77) "Like FDR, Mussolini believed that individualism was old fashioned, an obstacle to progress."
(page 79) "Confiscation of wealth may satisfy the vengeful in us. It may sooth a retaliatory spirit. But it is the path of national suicide.... There must always be the reward motive."
(page 82) "...FDR delivered a speech that again demonized investors and employers. He employed one attack after another..."
(page 86) "...in a November 1941 Fortune poll, 93 per cent of employers said they expected their property rights to be undermined and also anticipated the possibility of dictatorship". One wonders how much FDR maybe admired Stalin and Mussolini?
(page 87) "FDR tax adviser Randolph E.Paul had acknowledged much worse, that FDR's tax policies "intensified the depression they were working to correct". Shades of... January 2009?
(page 93) "Invariably, politics influenced the way PWA money was spent."
(page 185) "Experience everywhere indicates that politicians will hardly be able to keep their hands off such easy money".
There truly is a staggering amount of information in this book. The pace is relentless. What amazes me is that so much of the content is -intensely- relevant to the big debate going on right now, January 2009, in the incoming Obama administration. Some of his devotees come out with policy statements, and express "Big Government" "Federal" attitudes, that have an eerie similarity to some of the content of this book. If you read this book, here are only a few of the issues for you to assess, and take a view on:
1) that the debate issues raised in "FDR's Folly" are as topical today as ever. Supremely relevant.
2) Too many politicians, who delight in the sound of their own voices on national television, never read History or Economics, and never seem to learn from past US policy mistakes. They rarely seem to refer to History. And when they do, they come out with either vague generalizations, or really sweeping statements ("We need a NEW New Deal"), which make this bumpkin nervous. The implication seems to be that everything about the New Deal was GOOD. And that everybody AGREES. Right? Duh...
3) It's serious; are we once again going to see a US President and his "experts" prolong this depression by trying the SAME past failed remedies? Surely not. Mr Obama, please, you are way smarter than that, right?
4) And this is just my impression: Isn't it amazing how FDR had all sorts of people cheering wildly for him, when in fact there is so much evidence in this book and others that he basically...err... shafted them? That's a neat trick: get people to vote for you, and love you, whilst you cynically... spend that public money where it will get you the most votes? I know that doesn't sound kind, but DO read the book.
There's maybe more -much more- to FDR than many worshipful devotees would have us believe.
Just one of many examples in this book: so much money went to the richest states, because they were seen by FDR as 'swing votes'. The poorer states, which were already loyal to him, got a fraction of the funds. Seeing as we are dealing here with empirical evidence, (cold facts) I don't see how FDR lovers can explain that one away, but I'm more than willing to listen, ya hear?
5) FDR had complete contempt for the black race. That comes out with his treatment of the black tenant farmers, and above all his refusal to back an anti-lynching law. That amazes me. That alone paints a somber picture of the man who many revere as one of the greatest US presidents. Where was his "compassion" there? It seems FDR's colleagues were trying to prod him into action. From what I can see, he just thought it was funny. That is backed up by some contemporary private diary entries... Hard to avoid the conclusion that deserving black people, anxious to enter mainstream America, were treated with a cynical disregard. Simply... horrible. I will be reviewing some of those diaries in due course.

Good book. I shall be using it a lot as reference material. Now to look at what the "other side" says about it all. We MUST always keep challenging our own beliefs. Heck, maybe FDR WAS a great president. I just don't quite see HOW yet, but maybe somebody who is wise and patient will help this bumpkin into the New Deal light...
Peace. Enjoy the read.
PS: Please 'comment' constructively if you feel I am missing the point somewhere, or if you feel you can point me to further useful reading material to broaden my understanding of this time period, or to correct flawed reasoning - thanks...