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.
Vince Treachy:
When have you known an ideologue to let a few facts stand in the way of a good rant?
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.
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.
What Mike S. said.
FFLEO, thanks. I have a wife, a secretary and a legion of judges who take turns pointing out my errors.
Ryan, LOLF.
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.
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.
Duh. I mean “ditto.”
Bron, diddo what Mike S. said.
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.
Clint, maybe the competition was sponsored by Kraft.
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.
I wonder what the prerequisites were to be nominated as the “Great American Family”? That sounds a bit cheesy.
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.
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!
Was it over when the Germans bombed Pearl Harbor?
Hell, no!
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.”
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.
We have more to fear from the stupid than the malevolent.