It appears that the cause of the Depression has been finally determined with certainty. The fault for the Depression, according to Rep. Steve Austria (R-OH), was Franklin Delano Roosevelt. This time traveling moment was all the more impressive since the Depression began in 1929 and Roosevelt took office in 1933.
“When (President Franklin) Roosevelt did this, he put our country into a Great Depression. He tried to borrow and spend, he tried to use the Keynesian approach, and our country ended up in a Great Depression. That’s just history.”
Indeed, this is just history and one cannot argue with history . . . any more than one can argue with the fact that Carter started the Vietnam War or Truman was behind the Teapot Dome scandal.
Here is the skinny from his bio:
Prior to his service in the Ohio Legislature, Senator Austria was a small businessman and financial advisor. Steve is married to Eileen Austria and they are the parents of three sons; Brian, Kevin, and Eric. In 1984, the Austria family was chosen as the “Ohio Family of the Year” and subsequently was chosen as one of only nine families throughout the country as “The Great American Family” by the Reagan Administration. First Lady Nancy Reagan with President Reagan presented this award to the Austria family at the White House.
I totally missed the Great American Family competition. That is a bit of history that escaped me.
Now back to the time-traveling FDR. One of the principal reason for the confusion in all of the history books, newspapers at the time, and virtually every living American is that the stock market crashed on on October 29, 1929.
Now, before you blame the GOP for historical revisionism, consider the statement of now Vice President Joe Biden:
“When the stock market crashed, Franklin Roosevelt got on the television and didn’t just talk about the princes of greed. He said, ‘Look, here’s what happened.’” That was a moving sentiment, but if you happened to have one of the few existing televisions in 1929 and there was a broadcast from the White House, you would have seen President Hoover.
There is only two possibilities here. Either our leaders have a loose grip on history or they have secret knowledge that FDR was some alien who could use his faux chair to bend time and space.
We have more to fear from the stupid than the malevolent.
Mespo:
Mr. Austria is partially correct, however I personally believe it was Herbert Hoover who started us down the path to government intervention thereby paving the way for Roosevelt to inact his plans which did indeed lead to the Great Depression. So the original fault is with Hoover and it is disigenuous of Mr. Austria to suggest that it was all Roosevelt. I suggest you read a book by Murray N. Rothbard-Americas Great Depression. Mr. Rothbard is a classical liberal and studied under Von Mises (Austrian School). It is an excellent book on the hows and whys and was written in 1961 I believe. You can purchase it online from the Von Mises Institute for under $50.00
Mr. Rothbard and others believe the 1929 crash could have been a short term correction but for government intervention. As many believe today that what President Obama is doing is going to cause much needless long term suffering. Personally I believe that Bush accted hastily and without thought by giving that money to the credit markets and that part of the downturn in the stock market has been caused by President Obamas capital gains policies, had I had a couple of million in the market I would have sold and put the money into something that could avoid capital gaines increases.
John Maynard Keynes is not the only game in town and there are many who believe as I do that this stimulus package is going to be anything but.
bron98:
“Mr. Rothbard and others believe the 1929 crash could have been a short term correction but for government intervention.”
**************
The coroner has the luxury of time that the trauma surgeon does not. Speculation is a wonderful thing. Man economists believe Roosevelt’s flaw was not doing more to stimulate the economy when restrained by Republicans in Congress. So while it’s sheer fun to wonder “what if,” the facts do not change regardless of how many books one reads, or how many scenarios one concocts giving weight to factors which are guaranteed to produce the result desired.
Flawed or not in matters of policy, Roosevelt had one aspect of the calamity exactly right which has now returned in full fury. “”Corporate profit resulting from this period was enormous,” Roosevelt argued, but “very little of it went into increased wages; the worker was forgotten.”
Was it over when the Germans bombed Pearl Harbor?
Hell, no!
mespo, I believe that I have an explanation for Rep. Austria’s ignorance. I suspect that his only exposure to American history was in high school. If you recall your own high school years, you probably remember that the school year always ended just when we were reading about Teddy Roosevelt and his Rough Riders charging up San Juan Hill. Gosh, I’ll bet Rep. Austria doesn’t even realize that it was another Republican president, Warren G. Harding, who got us involved in World War I!
Mespo:
that is one aspect of capitalism that is hard to deny. I have a small business and I try to treat my employes as well as I can. I have a profit sharing program in place as I dont believe I am the entire reason I make money. I do not have to answer to a board of directors as a private company and have no stock holders as such. I can tell you it is hard to make a buck and the personal taxes I pay could actually pay for another employee or provide additional bonuses or purchase much needed equipment, for example my printer is 8 years old and my fax copier is about 5 years old and has been repaired once. I spend about $5,000/year dealing with taxes as I am not an accountant, and then there are local taxes that I have pay on gross receipts, not profits mind you, but all money taken in. And I have to carry a huge insurance policy. So it easy to say that the workers get left in the dust, but they are free to start their own businesses if they dont feel they are being justly compensated, which is what I did. From my experience/viewpoint the single biggest impediment to small business growth is taxes. It restricts hiring and equipment purchase.
People are not entitled to a job at a certain wage, and another thing I can tell you from experience, when you have a good employee you will bend over backward to keep them but there is only so much money available to pay them.
For me I like Demming and pay myself no more than 5 times what my lowest paid employee makes and I put as much money as possible into profit sharing. I think most small businessmen I know are about equal although some do pay themselves more, but for the most part we are all cognizant or our employees and try to treat them as well we can from a financial perspective and we are mindful of what the market is paying for a particular position.
I wonder what the prerequisites were to be nominated as the “Great American Family”? That sounds a bit cheesy.
Bron98, Ludwig Von Mises has been a favorite economist (along with Hayek) of conservatives for many years. But you should understand that the phrase “classical liberalism” has a meaning substantially different from modern liberalism (social liberalism). My objection to Von Mises’ theories is that they are predicated upon a fictional concept, the human being as a wholly rational animal. His version of laissez-fair, free-market economics would only work in a society consisting of like-minded, teutonic mathematicians, a rather sterile world that doesn’t exist. He was an idealist who did not appreciate the complexity of human nature or the myriad of non-rational factors that influence human behavior. Indeed, if they have proven nothing else, the events leading up to the current financial collapse should convince us that greed and hubris will trump rational behavior every time. If Von Mises’ social theories were correct, we could all read Ayn Rand and live happily ever after.
Clint, maybe the competition was sponsored by Kraft.
Bron,
I appreciate what you’re going through as a small business owner. I think though that the point is not about guys like you trying to make it on your own, against tremendous disadvantages. Small business should be at the heart of government concerns along with the working classes. It isn’t though. Despite how much sympathy is claimed for people like you our government Since Reagan and in other eras has focused primarily upon huge, wealthy corporations and their needs.
While you struggle with your taxes, the huge corporations pay pennies on the dollar through clever loopholes and un-American stratagems like registering in the Cayman Islands. Then too, companies like Wal-Mart, move into areas that give them tax breaks, while they destroy viable local businesses by underpricing them. Small manufacturing companies are purposely put out of business by larger ones to prevent them from becoming future threats. Innovations and inventions by small entrepreneurs are either suppressed, or stolen, by the larger competitors.
Southern States gave billion$ to foreign automakers to have them open manufacturing plants. These States also have “Right to Work” laws that ensure that Unions cannot exist. At the same time their Senators tried to block loans to American Auto companies, that operate at a competitive disadvantage to their foreign competitors.
America has thrived on the efforts of small businesses and family farms. Both these entities have been disadvantaged by a Reaganesque philosophy favorable only to big corporations. As Bush said talking to a group of his Texas supporters at a high price fundraiser:”Some people call you the Haves and Have-Mores
I call you my base.”
You as a small business owner are no doubt getting screwed from many directions. The source of your troubles though are the Republican’s and Democrats who are beholden to the Corporatist Elite that has bought them off. It also comes from the philosophy of Reagan on down, that counts you for nothing and the Corporate Elite as their base.
Bron, diddo what Mike S. said.
Duh. I mean “ditto.”
I prefer that my Republican ‘brethren’—such as Mr. Austria—chose to keep their abject ignorance of history from the public’s eye. We genuine conservative Republicans have a stellar historical reputation to uphold.
Mike A. Your first “same here” was, well, funny… I am always pleased to learn that fine, well-educated minds are also subject to error.
I’m so happy to have this guy as my representative, its like hearing that your dog was just run over outside your burnt down house.
Of course the district has only sent a democrat to congress 3 times since the civil war, I have a feeling this guy is going to be around for awhile.
Ryan, LOLF.
FFLEO, thanks. I have a wife, a secretary and a legion of judges who take turns pointing out my errors.
What Mike S. said.
Nevermind that Keynesian Economics was not presented in academia until 1936, when The General Theory of Employment, Interest and Money was published.
Good try though, Mr. Austria.
This brings back a memory. Fifty years ago, a young Republican told me that the Democrats had ruined the economy in 1930 by passing the Smoot Hawley Tarfiff. He read from a book that over 1000 economists had objected to the bill.
I went to the library and looked it up myself. It had passed both the House and Senate with overwhelming Republican majorities and was signed by the Republican President Hoover. (I just looked it up again. 39 of 44 GOP yes votes in the Senate. 208 of 222 GOP yes votes in the House).
Economists then and now hold that the tariff spurred world-wide retaliation and deepened the global Depression. All this happened long before Roosevelt’s inauguration. (We should all be wary of a new wave of protectionism in today’s crisis).
When I brought this to his attention, he disregarded it totally. It was still not Hoover’s fault. So help me!
So I suspect Rep. Austia’s views will be impervious to facts. He will still blame Roosevelt, regardless of the tariff. He will ignore all the other complex causes uncovered by research since the 1930s, and rely on ideological experts. These guys keep telling each other the same factiods over and over until they believe them religiously.
Vince Treachy:
When have you known an ideologue to let a few facts stand in the way of a good rant?
I think the old saying is that they never forget.
And they never learn.
MikeA:
“teutonic mathematicians” I think you have nailed my problem! I am an engineer and my mothers side of the family is from Germany, albiet in the 1830′s(lest anyone accuse me of certain proclivities that affected my distant cousins).
Mespo:
I have been meaning to ask, why the picture of Marcus Tullius?
VinceT:
how right you are. It is human nature to believe what you hear and read. In this day and age with the internet it is just plain laziness, another human failing.
MikeS:
I agree that large corporations do get to many government goodies and so do farmers. But with large corporations they do employ a lot of people that pay taxes which does help the local economies. I would prefer if they had to play fairly and I am against what is called corporate welfare.
Question to all-I know from all of your posts that the majority of you are staunch protectors of individual liberties/freedoms I would say even more so than those on the right. The question then is why is laissez fair capitalism so disagreable? I see it as a pretty fundamental right, buying what I want when I want to buy it. And I have the further ability to get a good price with all of the competing stores. I know that business has been lost to overseas but consumers (who are also workers) have much more selections at very low prices because of it. Does not the consumer deserve to have their dollar stretch as far as possible?
I have read the posts that you have left and the one thread that appears in all is fairness, by that I mean you dont think it (capitalism) is fair to the average man or at least that is what I am reading into it. But I think the average man (I include myself in that) has much opportunity in our current system and if I extrapolated to a point of even more freedom for business I see more opportunity for the average man. I dont begrudge Bill Gates his billions, he has afforded me the opportunity to efficiently run a small business and many thousands of other small business people. Also his work has created numerous spin off businesses that werent even thought of as little as 30 years ago. All in all Bill Gates has given the world fire. Granted he did not do it by himself but he has made many people wealthy.
Well anyway just trying to wrap my mind around it all.
I suppose “fire” is one way to describe Windows.
metaphorically speaking. I knew it was too much but I could not help myself
Bron,
While the large corporations do hire employees that pay taxes, they generally avoid paying taxes, or pay at a lesser rate than their employees.`Then too they fire perfectly good and loyal employees to boost profits, ship jobs overseas and in many instances have wanton disregard for their customers. In our current situation they are run by mediocre people, who pay themselves exorbitant salaries and in their lust for personal gain often wreck good companies putting people out of work.
A current example is Circuit City that fired all of its’ more experienced (and better paid) sales staff, to replace them with cheaper workers. Customers, noting the listlessness of the service and the inability of inexperienced staff to answer their tech questions stopped coming. The company is now in the process of dissolution.
As for laissez faire capitalism that is an easy answer. Corporations are not citizens and should not receive citizen’s rights. They are by definition amoral, rapacious, and have no loyalty to country. This is not a good v. evil judgment just the nature of the beast. These entities can’t be trusted to self regulate (see Peanut Corporation of America)and must be controlled by governments to ensure a fair market and protect their citizens.
“They are by definition amoral, rapacious, and have no loyalty to country. This is not a good v. evil judgment just the nature of the beast.”
I beg to differ on the G vs. E issue, although it is “the nature of the beast”. I think it IS intrinsically evil to give a fiction the equivalent or superior rights to natural beings. I think it is because we can all see what the result is – there is a causal connection. To kill a weed, you must pull out the root.
Copy that Buddha, but the inherent evil came when the fiction was put in place, sometime in the late 1880′s I think by trickery. The supporters then and continued supporters now are either evil, ignorant or both. Corporate entities themselves are by definition in business solely to make a profit. They must be strictly controlled for this reason or then they do become evil in their methology and the harm it does to society.
Mike,
I think it really narrows down to the issue of equivalent or superior rights to natural beings. The idea behind a corporation, to limit liability to encourage R&D is excellent, but flawed in execution. Corporations should
1) not be allowed to lobby. PERIOD. They aren’t real people and the Constitution allows that We the People have the right to petition, not We the Fiction. We the REAL People make the rules, whether the corporate believe it or not. Halliburton is going to discover this fact the very hard way as are the rest of the Neocons.
2) Corporations should only be allowed to use the courts in very restricted manners such as copyright infringement or contractual disputes. Civil suits to promote their profit motive that are contrary to the public good, such as cases to ease government restrictions, should not be allowed. Access to the criminal justice system should be maintained though. An honest actor corporation needs recourse against theft, murder, etc.
3) CEO’s and boards should have to bear the penalty in cases of corporate wrong doing just as if they stood in place of the fictive defendant – this includes prison, asset forfeiture and possible bars against future participation in process. Otherwise, the form will continue to serve as a barricade for sociopaths and psychopaths.
Short, short leash. That’s the only way to keep this dog from biting.
And here’s a Democrat who doesn’t get it either.
http://www.earlham.edu/~peters/fos/newsletter/10-02-08.htm#nih
It’s not about party, once again, it’s about sociopathic behavior and being a slave to a fiction for profit.
Scientific endeavor, help me on this Patty, REQUIRES a free flowing sharing of information. You are going to cut off the nose of science to bow to the desires of the publishing industry because they aren’t capable of adapting fast enough to survive using their traditional models. Would Galileo have been able to build his telescope if he hadn’t been able to access the advances in optic made by ME scientists during the Dark Ages?
Rep. John Conyers (D-MI), I’m calling you out for being a semi-fascist corporate tool right now.
Withdraw this bill.
Those commenters here who noted the possibility of protectionist acts by the United States are being proven correct. From tomorrow’s New York Times: China Moves to Retaliate Against U.S. Tire Tariff:
“China unexpectedly increased pressure Sunday on the United States in a widening trade dispute, taking the first steps toward imposing tariffs on American exports of automotive products and chicken meat in retaliation for President Obama’s decision late Friday to levy tariffs on tires from China.”
http://www.nytimes.com/2009/09/14/business/global/14trade.html?hp
I expect that the Obama administration will continue protectionist actions, particularly when the US jobs involve union labor.
puzzling:
this is indeed a bad sign, it is deja vu all over again. this happened in the 30′s and was one of the causes of a prolonged depression. I hope Mr. Obama will not repeat history. He should repeal that tariff immediately. With China holding our debt he must either be really stupid or really smart.
The stupid speaks for itself, if our dollar is so debased we pay China a fraction of what we owe them. But then we get screwed too.
From Wikipedia….After Black Tuesday…”The stock market turned upward in early 1930, returning to early 1929 levels by April, though still almost 30% below the peak of September 1929.”
Thus, the facts of history show Mr. Austria was factually correct. Go talk with any economics professor at the most liberal universities in this country and they’ll tell you times were tough between Black Tuesday and 1934, but things were on the upswing until Roosevelt – not Hoover – enacted great spending and government intervention (socialism) along with the “dustbowl” famine which caused the Great Depression.
I love how the facts always correction socialist attempts to rewrite history.
Guy is the one who is re-writing history and ignoring his own facts.
This is a very selective factoid. Even in April 1930, the market was still 30% below the high. And what about unemployment rates? And economic activity. Even the eminent conservative economic historian Milton Friedman blames the depth and length of the depression on the monetary policy of the Fed, which dried up the money supply and choked off recovery.
And Bob’s factoid ignores what happened immediately after April 1930.
As a matter of fact, the Republican Congress enacted and the Republican President Hoover signed the Smoot-Hawley Tariff less than two months later, over the protests of hundreds of economists who accurately predicted dire consequences.
And make no mistake about it. Congress was Republican control, and a majority of Republicans in both houses voted for the bill. Smoot-Hawley was owned by the Republicans. The vote numbers are up above in this thread.
Roosevelt? He was in New York at the time. Can’t blame that one on him.
So much for fake revisionist history.
http://www.squidoo.com/Great-Depression-economic
QUOTE Many economists have argued that the sharp decline in international trade after 1930 helped to worsen the depression, especially for countries significantly dependent on foreign trade. Most historians and economists partly blame the American Smoot-Hawley Tariff Act (enacted June 17, 1930) for worsening the depression by seriously reducing international trade and causing retaliatory tariffs in other countries. Foreign trade was a small part of overall economic activity in the United States and was concentrated in a few businesses like farming; it was a much larger factor in many other countries. The average ad valorem rate of duties on dutiable imports for 1921-1925 was 25.9% but under the new tariff it jumped to 50% in 1931-1935.
In dollar terms, American exports declined from about $5.2 billion in 1929 to $1.7 billion in 1933; but prices also fell, so the physical volume of exports only fell by half. Hardest hit were farm commodities such as wheat, cotton, tobacco, and lumber. According to this theory, the collapse of farm exports caused many American farmers to default on their loans, leading to the bank runs on small rural banks that characterized the early years of the Great Depression. [unquote]