The harm that FDR did – now reinforced 8

The figure of [Franklin Delano] Roosevelt exhibited before the eyes of our people is a fiction. There was no such being as that noble, selfless, hard-headed, wide and farseeing combination of philosopher, philanthropist and warrior which has been fabricated out of pure propaganda and which a small collection of dangerous cliques in this country are using to advance their own evil ends.

Those are the closing words of The Roosevelt Myth by John T. Flynn, published in 1948. Flynn was a Roosevelt White House insider. His book amply proves his conclusion.

Now we quote a recent article by Stephen Moore at the Daily Signal (originally in the Washington Times):

My seventh-grade son recently wrote a U.S. History paper extolling the virtues of President Franklin Roosevelt’s New Deal. “It ended the Great Depression,” he wrote with great certainty. He’s only 12 and parroting what the history texts and his teachers told him.

That’s his excuse. What’s Ken Burns’?

Mr. Burns’s docudrama on the Roosevelts — for those who weren’t bored to tears — repeats nearly all the worn-out fairy tales of the FDR presidency, including what I call the most enduring myth of the 20th century, which is that FDR’s avalanche of alphabet-soup government programs ended the Great Depression. Shouldn’t there be a statute of limitations on such lies?

Ask nearly anyone over the age of 80, and they will say that FDR cared about the working man and “gave the country hope”, a point that Mr. Burns emphasizes. Roosevelt exuded empathy, which isn’t a bad thing … but caring doesn’t create jobs or lift gross domestic product.

Nor does spending government money revive growth, despite the theories put into practice by the then-dean of all economists, John Maynard Keynes. Any objective analysis of these facts can lead to no other conclusion. U.S. unemployment averaged a rate of 18 percent during Roosevelt’s first eight years in office. In the decade of the 1930s, U.S. industrial production and national income fell by about almost one-third. In 1940, after year eight years of the New Deal, unemployment was still averaged a god-awful 14 percent.

Think of it this way. The unemployment rate was more than twice as high eight years into the New Deal than it is today, and American workers now are angry as hornets. Imagine, if jobs were twice as scarce today, the pitchforked revolt that would be going on. This is success?

Almost everything FDR did to jump-start growth retarded it. The rise in the minimum wage kept unemployment intolerably high. (Are you listening, Nancy Pelosi?) Roosevelt’s work programs like the Works Progress Administration, National Recovery Administration and the Agricultural Adjustment Administration were so bureaucratic as to have minimal impact on jobs. Raising tax rates to nearly 80 percent on the rich stalled the economy. Social Security is and always was from the start a Madoff-style Ponzi scheme that will eventually sink into bankruptcy unless reformed.

The cruel irony of the New Deal is that the liberals’ honorable intentions to help the poor and the unemployed caused more human suffering [in America] than any other set of ideas in the past century.

The most alarming story of economic ignorance surrounding this New Deal era was the tax increases while the economy was faltering. … FDR signed one of the most financially devastating taxes: “On April 27, 1942, he signed an executive order taxing all personal income above $25,000 [rich back then] at 100 percent. Congress balked at that idea and later lowered it to 90 percent at the top level.” The New Dealers completely ignored the lessons of the 1920s tax cuts, which just a decade before had unfurled an age of super-growth.

Then there was the spending and debt barrage. Federal spending catapulted from $4.65 billion in 1933 to nearly $13.7 billion in 1941. This tripling of the federal budget in just eight years came at a time of almost no inflation (just 13.1 percent cumulative during that period). Budget surpluses during the prosperous Coolidge years became ever-larger deficits under FDR’s fiscal reign. During his first term, more than half the federal budget on average came from borrowed money.

What is maddening is that thanks to this historical fabrication of FDR’s presidency, dutifully repeated by Mr. Burns, we have repeated the mistakes again and again.

Had the history books been properly written, it’s quite possible we would never had to endure the catastrophic failure of Obamanomics and the “stimulus plans” that only stimulated debt. The entire rationale for the Obama economic plan in 2009 was to re-create new New Deal.

Doubly amazing is that at this very moment, the left is writing another fabricated history — of the years we have just lived through. The [leftist] history books are already painting Obama policies as the just-in-time emergency policies that prevented a Second Great Depression. I wonder if 80 years from now, the American people will be as gullible as they are today in believing, as my 12-year-old does, that FDR was an economic savior.

In confirmation of Steve Moore’s contentions, we take two more extracts from The Roosevelt Myth. 

Of the Planned Economy, Flynn writes:

This curiously un-American doctrine was being peddled in America (under the presidency of Franklin Delano Roosevelt) as the bright flower of the liberals. … They did not dare admit that I implied the restoration to the State of a numerous collection of those very powers which we had stripped from the State as the means of giving freedom to men. They called it the Planned Economy. But it was and is fascism by whatever name it is known. … Little by little the government must be made stronger, the, the rights of the citizens must be reduced. Little by little, if the Planned Economy is to be made to work, the free republic must wither. These two ideas – the idea of a free republic and the idea of a Planned Economy – cannot live together.

Elsewhere he quotes from a 1940 address by President Hoover, highly critical of Roosevelt’s New Deal, to warn America where such policies would lead them, explaining what led to the rise of Fascist and Communist dictatorships in Europe: :

In every single case before the rise of totalitarian governments there had been a period dominated by economic planners. Each of these nations had an era under starry-eyed men who believed that they could plan and force the economic life of the people. … They exalted the State as the solvent of all economic problems.

These men thought they were liberals. But they also thought they could have economic dictatorship by bureaucracy and at the same time preserve free speech, orderly justice and free government. They might be called the totalitarian liberals. They were the spiritual fathers of the New Deal. …

These men shifted the relationship of government to free enterprise from that of umpire to controller. Directly or indirectly they politically controlled credit, prices, production of industry, famer and laborer. They developed, pump-primed, and deflated. They controlled private business by government competition, by regulation and by taxes. They met every failure with demands for more and more power and control … Initiative slackened, industry slowed down production.

Then came chronic unemployment and frantic government spending in an effort to support the unemployed. Government debts mounted and finally government credit was undermined. Out of the miseries of their people there grew pressure groups – business, labor, farmers, demanding relief or special privilege. Class hate poisoned cooperation.

It all has a nasty familiar ring to it – because, as Steve Moore asserts, it is a description of what Democratic government is doing now. And yes, it will lead to a collectivist hell if the Democrats, with their present economic policies, are not very soon removed from power.

  • Don L


    Within the body of the article, Stephen Moore makes the comment: “The New Dealers completely ignored the lessons of the 1920s tax cuts, which just a decade before had unfurled an age of super-growth.”. This is absolute poppycock. It is the constant drumbeat lie told by the fascistic right. I do not mean free-market all the way on the right, but just to the right-side of commies on the farthest left of the x axis.

    The boom of the 1920s was just that…a Boom before the Bust. Created by the FED finally flexing its wings, having just been created in 1913. Oh, did the New Dealers forget? No…they didn’t care…they weren’t interested in saving an economy or protecting the people…they were about acquiring and holding power…behind the guise of caring!

    What I think is essential for all to understand is what Mises and Hayek are famous for, among many things, is the idea of time on economic forces. All non-Austrian economic schools of thought deny, ignore or denounce this idea…they cannot refute or disprove it. They are against it because to acknowledge and accept it is to refute and disprove central planning altogether. So, all mainstream economics sees the economy as a static and non-iteractive thing as of a point in time.

    The Austrian school sees the economy as human and dynamic, impossible to artificially stop it and use that fixed data as some useful predictor of the future. The economy never stops. And, so time must be considered. here’s how it works and why all other economic theories fail!

    Essential to an economy are what are termed ‘honest’ prices. Prices are set by consumers. What are you willing to pay? If a seller agrees…evrybody wins. If a seller cannot or will not sell at the consumers price.the price is adjusted or the seller goes out of business. All agreeable and between willing parties. Prices are signals. Should an enntrepreneur enter the market, should a consume finally buy, et ceteras.

    Moving ahead…the interest rate is a price and a signal. Considering those firms involved in providing goods or services with long term investment requirements (a long wait until the plant is built and goods head out the door and sales actually bring in revenue) the interst rate is crucial as to whether or not to expand.

    In a free market with ‘honest’ interest rates, a high interest rate says money is not available for lending as consumers are not saving. Conversely, if the interest rates are low, this tells these long-range planners that consumers are saving, money is available and that when the projects are complete…there will be consumers available with funds to buy the new goods or services. It is just that simple. Economics, real economics is. The mainstream stuff is mumbo jumbo to deceive told by the delusional who feel important spewing the nonsense. LAW: a free economy, with honest prices, is self correcting and maintains balance.

    Now, with dishonest prices, a dishonest interest rate, manipulated by an otherwise fraudulent banking system – FED – raised the rate artificially, the economy slows, unemployment rises and cost of living increases without benefit of self-adjustment. If the rates are lowered artificially, demand for all goods and services increase to destroy availability given no increase in production , consumer savings are savings are depleted (honest interest rates would necessarily rise) and lon range planners are signaled to built plant, mfg capital equipment and homes. This is the BOOM side of the FED manipulation. The Bust comes when all those long range projects are completed and there is no consumer money to buy the new outputs.

    The failure is not recognizing time consequences. And, central planning is moot if there isn’t manipulation of prices…it’s what its all about. And, manipulation of prices, usurping the market’s determination, placing government as a 3rd party in a two-party system, is always doomed to failure.

    So, it was not the tax breaks, certainly leaving people with their own money is GOOD, that created the boom of the 20s, it was the erroneous and detrimental manipulation of interest rates by the FED…that irrefutably lead to the Bust of the Great depression and the excuse for FDR to intervene even farther into the economy and truly screw prices up!

    If you grasp the time element alone, officially deemed the Austrian business cycle, you will realize, no matter the source, that if it ain’t Austrian…it’s BS!!!

    Suggested Reading:

    “The Origins of the Federal Reserve” by Murray N. Rothbard —

    “The Case Against the Fed” by Murray N. Rothbard —

    (at Amazon) “End The Fed” by RonPaul —

    (at Amazon) “Free Prices Now!: Fixing the Economy by Abolishing the Fed” by Hunter Lewis —

    • Burro

      Don El #268: good stuff, old chap.

      From now on, the Pikanino will be re-named in your honour to….The Pee.

      Reached page 268 yesterday. Got lost in The Pee’s equations and had to re-read the house-brick.

      The Burro

  • liz

    Yes, a very nasty familiar ring. In fact, you can’t even say it’s history repeating itself, because it has never stopped! We’re just in the terminal stage of one long, unending encroachment of power by government.

  • Don L

    Everyday across America, for over 100 years, school kids say a pledge of allegiance that is an anti-constitutional lie. It is repeated as adults. It is never ever questioned. The only contraversy is whether to include or not include god. The offense is the intentional socialist/progressive insertion of the word ‘indivisible’. This minor detail, the lying myths about Lincoln and FDR are for the same progressive/socialist purpose…to stregthen an attitude of unquestioned belief in the need for an omniscient and omnipresent central government…the State. Yes, the Democrats are obvious supporters of these fabrications. But, you’d be foolish to discount the Republicans whose history is as having created the State by civil war.

    Both parties are left. That is they are socialists. The Dems are communistic and the Repubs are fascistic. In fact Stephen Moore of the Heritage Foundation, author and contributor on FOX and at the Daily Signal is fascistic as a monetarist….a hard suporter of the FED. And, as the protege of Art Laffer, his fiscal policy is to maximize tax revenue to the government…not tax reform in support of the governed. Mr Moore’s story and observations are well intended…but, a Moore economy would not end the slide down the road to serfdom…merely delay it.

    The only political economy that will save America is a free-market economy free of all gov’t intervention. This can only come about by amending the constitution to implement term limits, repeal the 17th amendment and End the FED at a minimum: De-Career & Un-Party DC! Government is instituted among men to Secure Unalienable Rights. Today’s government has transformed it into a government instituted to secure an office holder in office. Every decision, troops on the ground, taxes, spending, immigration…everything is about politics. And, politics is all about re-election all the time. Politicians will never let the truth out about FDR, Lincoln or the others as long as it will affect ‘career’. They will never end the control over our kids minds…it isn’t in their political interest. End the idea of careers. It was interesting that after 4 disastrous terms with FDR…term limits were imposed on the office of president. Ought the same apply to all 545 government offices?

    In addition to the “The Roosevelt Myth” by John T. Flynn ( ), highly recommended is the book “New Deal or Raw Deal?: How FDR’s Economic Legacy Has Damaged America” by Burton W. Folsom —

    An earlier book about FDR also by John T. Flynn, “Country Squire in the White House”, is available free as a PDF or eBook or for purchase as a hard copy —

    • Burro

      Well Don El #268! You never cease to amaze me. For a lone cabbie who can even mention the name of these superb texts, let alone read and interpret them indicates you must not have made much as a cabbie as you were reading in the back seat all the time. Are you in fact not a Spectre – a reincarnation of Hayek or Mises? .

      Great comments, old friend. As a civilized Burro, I have, of course, read all three at least twice, and while the Squire was good, I really loved the Myth – I chuckle daily about the Great Man nicking stamps and flogging them. And he claimed he was not a capitalist!!!

      Folsom’s book was another great read, but less hard-hitting than Flynn. The truth is the Squire set in place the first cog in the ratchet of the never-ending growth of the State – and what a state it is!

      A note for you: the Fabulous Jill mentioned the increase in taxes to 90%. According to William Manchester’s historical text (2 vols) the tax hit the rich alright………… fact only one or the rich……Mr Carnegie! I have misplaced vol. 1 so I cannot provide the exact page reference, but will dig it out. So we have the Great Man, nicking postage stamps, using taxes against political enemies (what a surprise), and collaborating with the verminous fed to lead to the Depression. What a winner! We certainly need more like him I’d wager. Oops!………wait a minute. Don’t we have one NOW in the Casa Blanca?

      A great friend of mine, Markus Burritus, lives in AZ. He has a big boat. In the event the floods get you, contact the Fab J and we will send him over in style to rescue you.

      Keep well and feisty.

      The Impressed and Astonished Burro

      • Don L

        Well, thank you sir.

        Now, at the risk of seeming unappreciative, biting the hand that offers such appreciated compliments,I must offer two adjustments:

        First is to suggest that FDR was a massive cog in the growing machine of our destruction, he was not the first cog. The idea for the machine belonged to . He executed the Milton Berle technique of effacing the Republic and robbing the till always in the name of helping the people.

        The next cog was a doozy that enabled the machine to be built.Lincoln knew that to maintain and entrench power, government must be centralized. His war was solely to
        destroy states’ rights…hence today’s lying myths.

        The next cog was Wilson. Establishing the FED and direct taxation (16th) he provided the financial engine and generator of corruption to oil and run the machine. And,
        severing senators from representing their states (17th) was the last vestige of state’s rights…the last check & balance on the STATE. The machine was designed, built and running; ready for an operator to get in the driver’s seat.

        FDR was that driver. He was the first cog to put the pedal down and see how much damage the machine could do. Quite a lot!!! He recognized the increased performance if
        he outlawed gold ownership and he (in cabby speak) had America by the short hairs.

        The next cog, none to date to equal the damage implemented by FDR, was Nixon. His “We are all Keynesian’s now” complete severing of gold from the dollar removed the machine’s restricter plate. (Notice Pee never mentions much about FED and nothing about Nixon)

        Obama is a cog. Our only hope with him is he keeps loosing control of the machine…hitting the walls…maybe the people will finally see the machine for what it is and, again, realize they can drive themselves.

        My second comment has to do with “the Fabulous Jill mentioned the increase in taxes to 90%”. That in fact was Stephen Moore’s comment. Did you ever read the post I made correcting Jillian for comments I failed to realize were actually someone else’s. Boy, egg on face was a polite expression for I walked in it! LOL.

        Incidentally, cannot remember who…I believe it was Keynes who convinced FDR to raise tax to 100%. He actually had a theory that if you taxed 100%, the next year you could double it. It had to be Hayek or Rothbard where I read that…I can’t remember the source, but how could you not remember that nonsense. Of course, that’s all Keynesianism is.

        Again, thank you El Burro. Here’s to Beaujolais, Bordeaux and Benedictine for you!

        P.S. Carnegie…talk about more lies and revisionist history. The Robber barons…all excellent entrpreneurs who advanced America. The real robbers, sucking at the teat of America’s wealth…not a word. (Burro, you’ve probably alreadty read this.) Highly Recommend: (at Amazon) “The Myth of the Robber Barons: A New Look at the Rise of Big Business in America” by Burton W. Folsom —

        • liz

          Great analogy there! Paints a very accurate picture of our political history.

      • Don L – I never mind being praised for something I haven’t done. I only mind being blamed for something I haven’t done.