D o w n s i z e r – D i s p a t c h
Quote of the Day: “History doesn’t repeat itself, but it does rhyme.” — Mark Twain
Subject: Educate the Powerful!
Mark Twain was right. History doesn’t repeat itself, exactly, but often the present does rhyme with the past.
Sadly, the evidence for this is now all around us.
Too much of what the politicians are currently doing rhymes too well with what the politicians did during the Great Depression.
Then, as now, the politicians blamed the economic downturn on the free market. They were wrong then, and they are wrong now.
The government caused the Great Depression. Even Ben Bernanke, the Chairman of the Federal Reserve, agrees. Here’s what he said at the celebration of Milton Friedman’s 90th birthday in 2002 . .“I would like to say to Milton (Friedman) and Anna (Schwarz): Regarding the Great Depression. You’re right, we did it.”
Predictably, government schools don’t teach this view. Instead, they teach that . . .
The depression became Great because President Hoover was an advocate of laissez-faire economics who did nothing to intervene. In fact, Hoover was the first president to ever make major interventions in the economy.
Another economist, Murray Rothbard, has described how President Hoover was the true creator of the “New Deal” approach for which FDR later claimed dubious credit.
Caplan and Rothbard are not alone in this. Roosevelt aid Rexford Guy Tugwell was to say years later . . .
“We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started.” (Source: Paul Johnson, A History of the American People — New York: HarperCollins Publishers, 1997, p. 741)
Even FDR himself agreed that Hoover had intervened, he just disagreed with the interventions. During the 1932 presidential campaign Roosevelt repudiated Hoover’s meddling, saying . . .“The doctrine of regulation and legislation by ‘masterminds’ … has been too glaringly apparent at Washington during the .”
And during the 1932 presdiential campaign Roosevelt constantly criticized Hoover for his huge deficits, promising instead . . .
* “immediate and drastic reductions of all public expenditures”
* “abolishing useless commissions and offices, consolidating bureaus and eliminating extravagances”
* “reductions in bureaucracy”
* Implied tax cuts
* And a “sound currency to be maintained at all hazards.”
We aren’t taught that Roosevelt promised these things. Instead, we’re taught that FDR’s heroic interventions saved the free market from itself.
But what did his interventions actually achieve?
* The depression became Great under FDR’s guidance.
* It lasted more than a decade.
* Prosperity never returned while he was President.
* The economy only recovered after Roosevelt was dead and buried
Even FDR’s own economic team knew that his New Deal interventions had been a complete failure. Here’s what FDR’s Treasury Secretary, Henry Morganthau, admitted to Congress in May, 1939 . . .
“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot!”
It’s significant that Hoover and Roosevelt were the first to intervene in the economy. Previous downturns had always been allowed to run their course, lasting from a few months to a couple of years. But the first one the politicians tried to stop is the one that lasted more than a decade, and that really hit hard.
If government intervention worked, then why did the 1929 depression become Great, when none had before?
It ought to make you angry. The injustice is so clear. The politicians caused the problem, blamed it on the free market, and then benefited from the disaster they had created by grabbing vast amounts of power and money.
And now it’s happening again. History, sadly, is rhyming.
We’re being told that the economic downturn resulting from the housing bubble is a market failure, and that massive government intervention is needed in all directions. But the truth is this . . .
* Government housing policies and easy credit from the Federal Reserve caused the housing bubble.
* Companies and individuals who made bad decisions based on these policies should pay the full price for their mistakes
* None of them should be rescued
* The politicians should not intervene
In short, the politicians should stop pursuing policies that rhyme with those pursued during the Great Depression.
In addition, the advocates of Big Government should be asked . . .
* Why, precisely, was the first economic downturn in which the government intervened the only one that became so bad that it earned the name of the Great Depression?
* And why is it, precisely, that the major areas of American life where the government has intervened to make things more affordable — such as health care, higher education, and housing — are exactly those areas where costs have risen the most?
Government intervention does not work. It does not make things more affordable, it makes them more expensive. It does not prevent economic downturns, it causes them, and deepens them.
And then do something to make them smarter . . .
Paste this Dispatch into the section for your personal comments and send it to them. Maybe there are a few Congressional staffers who will learn something.
Thank you for being a part of the growing Downsize DC Army.
CONTRIBUTE to the Electronic Lobbyist project
http://www.DownsizeDC.org is sponsored by DownsizeDC.org, Inc. — a non-profit educational organization promoting the ideas of individual liberty, personal responsibility, free markets, and small government.
You are encouraged to forward this message to friends and business associates, and permission is hereby granted to reproduce any items herein as long as attribution is provided for articles and the subscription instructions above are included.
Whereas, our commercial media is for sale to the highest bidder.
Whereas, the US federal education recommendations are based on corporate points of view.
The story of the Prohibition of alcohol between the years of 1920 and 1933 is:
Wikipedia : In the United States, the term Prohibition refers to the period from 1920 to 1933, during which the sale, manufacture, and transportation of alcohol for consumption were banned nationally as mandated in the Eighteenth Amendment to the United States Constitution. Prohibition of alcohol can also refer to the antecedent religious and political temperance movements calling for sumptuary laws to end or encumber alcohol use.
Following significant pressure on lawmakers as a result of the temperance movement, the United States Senate passed the Eighteenth Amendment on December 18, 1917. The “Volstead Act,” the popular name for the National Prohibition Act, passed Congress over President Woodrow Wilson‘s veto on October 28, 1919 and established the legal definition of intoxicating liquor as well as providing for enforcement of Prohibition. The 18th Amendment was certified as ratified on January 29, 1919, having been approved by 36 states, and went into effect on a Federal level on January 29, 1920. Some state legislatures had already enacted statewide prohibition prior to the ratification of the Eighteenth Amendment.
As Prohibition became increasingly unpopular during the Great Depression, especially in large cities, repeal was eagerly anticipated. On March 23, 1933, President Franklin Roosevelt signed into law an amendment to the Volstead Act known as the Cullen-Harrison Act, allowing the manufacture and sale of certain kinds of alcoholic beverages. The Eighteenth Amendment was repealed with ratification of the Twenty-first Amendment, on December 5, 1933.
A different reason has come to light recently and makes MUCH more sense.
You see, during the 1920’s America was roaring forward with easy credit. Everyone seemed to be a winner.
As roads were being cut across the country side, automobile sales exploded. This is great for the Ford Motor Company, but what was not written into your government approved history book is that our ingenious and inventive grandparents were running their new cars on uncle Erny’s moonshine. Ask you friendly mechanic. It is not difficult to get a car engine to run on alcohol.
This situation was dire indeed to Mr. Rockefeller and his Standard Oil Company. They had just discovered (1911) a massive oil field in Drumright, Oklahoma and needed someone to buy all this black gold…
Homemade auto fuel had to be eliminated. As was typical of the time, they hired the public relations (PR man) psychologist and the commercial media to create a public outcry against alcohol consumption and public drunkenness. They passed the 18th amendment and immediately sent the FBI out into the countryside to destroy all major distilling operations.
At the same time, Standard Oil began construction of “gas stations” all around the country.
By 1933 the boom 20’s had turned to the “Great depression”, the PR guys changed their message and proded the people to demand their alcohol back, so Roosevelt repealed the 18th amendment for “certain types” of alcohol, with tariffs of coarse.
This government program gave Standard Oil 13 years without competition in the auto fuel market. They used it well by building the infrastructure to dominate energy policies up to present time.
Now you know, please pass this on.