The View From 1776
Tuesday, August 09, 2011
FDR in 1938; Obama in 2011
Obama and his fellow liberal-progressives learned nothing from Franklin Roosevelt’s disastrous tinkering with deficit spending and attempts to manage the economy during the 1930s Depression. Like their French socialist soul mates, today’s liberal-progressives find the elegance of an abstract theory more appealing than the hard-won, practical experience of everyday citizens whose actions really determine the state of the economy.
The parallels between President Franklin Roosevelt’s failures in dealing with the Depression and Obama’s failures in dealing with the present recession are uncannily close. Obama has been reduced to mouthing ineffectual platitudes in a vain stab at leadership.
Read Out, Out Damn Depression: FDR in 1938, a chapter from John T. Flynn’s 1948 book The Roosevelt Myth.
...He told Farley [in 1938] he would have “to go in for pump-priming or relief.” Farley agreed. But then Roosevelt confessed to a difficulty little understood at the time, or since.
What could he spend on? That was the problem. There is only a limited number of things on which the federal government can spend. This grows out of the character of the federal system. The federal government can build schools, hospitals, roads, institutions of all sorts. But they are built in cities, counties, states, and the activities which go on in these buildings are within the jurisdiction of the states. The states have to pay the teachers or nurses and staffs, have to support and maintain the roads, and so on. The federal government can spend money on agricultural experimentation, on scientific research, on national parks, on power dams, etc.
But in the end the outlays on these things are limited.
The one big thing the federal government can spend money on is the army and navy. Roosevelt explained to Farley that he could not spend on local projects because the states and cities did not want any more buildings and institutions which they would have to support. They were having trouble enough paying the bills of those already built. Roosevelt revealed to Farley that many WPA projects approved by the government were abandoned because the states and cities could not raise the money to support them. He had to spend, but what could he spend on?
...The country had now really reached a greater crisis than in 1933. The public debt, which was $22 billion when Roosevelt took office