BLUF:
In an article of the Journal of Political Economy, Ohanian and Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law June 16, 1933…“Ironically, our work shows that the recovery would have been very rapid had the government not intervened.”
FDR’s policies prolonged Depression by 7 years, UCLA economists calculate.
BLUF:
Not until World War II did joblessness finally begin to subside, in good measure because of military mobilization — important, but not the same as peacetime employment.
BIDEN AS THE NEW FDR: It’s the same old bad deal for jobs.
President Biden doesn’t want merely to showcase Franklin Roosevelt. He wants to replicate him. As President Roosevelt once did with the New Deal, Biden intends to spend to spur growth, though Biden’s proposals are magnitudes greater. As Roosevelt once did, Biden argues that helping unions helps the worker, and he hopes to undo 27 states’ “Right to Work” option.
As Roosevelt did, Biden headlines jobs — the term “jobs” appeared more than 40 times in his recent address to Congress. The president suggests that endeavors to meet his social or environmental targets can simultaneously, synergistically serve his greatest economic goal, employment. “When I think ‘climate change,’ I think ‘jobs,’” he remarked.
As Roosevelt did, Biden calls for tax hikes on the rich as a moral imperative. And as Roosevelt did, Biden dares others to disagree, declaring that in “another era when our democracy was tested, Franklin Roosevelt reminded us — in America, we do our part.” Biden skeptics, the implication is, aren’t doing theirs.
Still, a review of the record of Roosevelt’s New Deal suggests that a sentient voter, slimed or not, might pause before signing up for the newest new deal.
When Roosevelt ran for office in 1932, a shocking one in four workers was unemployed. Roosevelt promised to get employment back to usual levels, which then as now meant one in 20 out of work, or 5 percent joblessness. He blamed the downturn in part on “obeisance to Mammon” — an unwillingness of wealthy Americans to share. To recover, the president suggested, America needed the federal government to provide “more equitable opportunity to share in the distribution of national wealth.” The gravity of the crisis, Roosevelt argued, warranted emergency authority for the chief executive — license to play around, applying even conflicting theories seriatim through “bold persistent experimentation.”
Once elected, Roosevelt hiked taxes on the rich and kept them high, even pushing an “undistributed profits tax” to eat at business savings. He ramped up tax authorities’ investigations and urged the authorities into punitive audits. The “green” component of the New Deal was reforestation: Roosevelt promised to employ 1 million men in restoring forests, parks and fields. To create additional jobs, Roosevelt poured hundreds of millions of dollars, then a large sum, into infrastructure: bridges, schools, power plants, and the establishment of new institutions such as the Tennessee Valley Authority. In the name of helping the working man, the New Deal instituted minimum wages. Roosevelt’s 1935 Wagner Act, a tiger of a law, gave the labor movement such power that unions were able to force large companies such as automakers to accept collective bargaining, willy nilly.
Meanwhile, the New Deal regulated — nonsensically — both business and agriculture.
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