While 75 years separate the presidencies of Franklin Delano Roosevelt and Barack Hussein Obama, they are both big government liberals who firmly believed that when it comes to economic downturns and poverty,
the best remedy to fixing them is government programs. They both firmly believe the economy should be managed by a powerful centralized government. This essay will analyze some of the conditions both presidents faced when they were elected, similarities in their approaches and the consequences of their efforts and ideologies.
When both President Roosevelt and Obama were elected theUnited Stateswas going through extremely difficult times. FDR would assume the presidency in the thick of the Great Depression in 1933 and Obama during the Great Recession in 2008, the latter of which is often compared to the former. The approaches in how to go about fixing what each man inherited was similar in many respects. And that is, spend tremendous amounts of money, either by way of countless government programs or radical stimulus spending.
President Roosevelt launched so many New Deal programs they were often referred to by commentators as “alphabet soup” programs. One example was the Agriculture Adjustment Act (AAA), which was an effort to help stabilize falling prices of agricultural goods and to get deflation in check. Essentially, the government paid farmers to not produce goods and ordered the destruction of many crops and livestock. Another was the National Industrial Recovery Act (NIRA), which was a price and wage setting program (a nice way of saying government price-fixing) intended to foster fair competition. Both programs interfered heavily into the affairs of private businesses and State government, and were struck down by the Supreme Court as unconstitutional. As an aside, because of the Supreme Court’s actions FDR threatened to stack the Court with liberal justices who would be friendly to his New Deal policies. While this never happened, it shows the man’s autocratic like nature, which seems to never be discussed by those on the left.
FDR’s first New Deal started as soon as he was elected in 1933 (the second started in 1937) with government programs like the aforementioned. Did his programs heal the economy like he predicted? In his New York Times bestselling book, The 10 Big Lies About America, author and nationally syndicated talk radio host Michael Medved analyzes this question. He writes, “In 1931, in some of the darkest days of the Great Depression and the middle of the Hoover administration, the national unemployment rate stood at 17.4 percent. Seven years later, after more than five years of FDR and literally hundreds of wildly ambitious new government programs, after more than doubling of federal spending, the national unemployment rate stood at – 17.4 percent!” To have no reduction in the unemployment rate in five years time is terrible.
Other sources suggest alternative estimates which were actually higher than what Michael Medved cites. According to leading conservative think tank, The Heritage Foundation, when you remove prisoners, government relief workers, and the institutionalized from the employment equation the real unemployment rate remained above 20 percent during the 30’s.
Source: The Heritage Foundation
“Despite the rosy accounts of today’s cheerleaders for government spending, President Franklin D. Roosevelt’s job-creation programs in the 1930’s never succeeded in pushing the unemployment rate under 20 percent – much less back to the neighborhood of 5 percent, the ‘normal’ jobless rate” says Ken McIntyre of The Heritage Foundation.
Furthermore, despite decades of idolizing FDR in our academic institutions and by the mainstream media over how he got us out of the Great Depression, a number of people (I’m only going to use one example out of a few I came across in my research) have provided new data that suggests otherwise. Two UCLA economists, Harold L. Cole and Lee E. Ohanian, revealed new data in a study back in 2004 that shows Roosevelt’s New Deal policies prolonged the great depression by seven years! They point to particular policies that were anti-competition and pro-labor measures that Roosevelt promoted and signed into law in June of 1933. Cole says Roosevelt “came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies.” In other words, had government not intervened with certain New Deal policies, the country would have rebounded much more quickly.
We see similar unfulfilled predictions during the Great Recession in President Obama’s first term. When he entered office in 2008 the national unemployment rate was 7.8 percent. His administration and the Democrat party were militantly insistent on spending a vast amount of federal dollars in order to “stimulate” the economy. In January of 2009 the Democrat controlled House of Representatives passed the American Recovery and Reinvestment Act without a single Republican vote (11 Democrats also did note vote for the bill). The bill was originally estimated to be $787 billion worth of stimulus spending, but the Congressional Budget Office now estimates the total sum will be about $831 billion from years 2009 to 2019. What was the national unemployment rate roughly fours years later on Election Day November 6, 2012 and after billions of dollars in stimulus spending? 7.9 percent!
What made this even worse in my opinion are the faulty projections made by Team Obama before the bill was passed. The point of passing this historically massive stimulus package, as explained to the American people, was to cap unemployment at 8 percent and to lower the rate over time. Those projections failed miserably. To add insult to injury, people like the chairwoman of the president’s Council of Economic advisors, Christina Romer, made justifications that their estimates were “subject to significant margins of error,” and “considerable uncertainty.” So, in the end, they drastically increased the country’s debt burden and failed to lower the national unemployment rate as projected.
Charles R. Kesler, Editor of the Claremont Review of Books, puts Obama’s reign into perspective “Suddenly, the era of big government being over is over; and tax-and-spend liberalism is back with a vengeance.” Kesler makes another vital observation, “he [Obama] longs to be another FDR, building the New New Deal for the 21st century, dictating the politics of his age…” The key question we need to ask is does the approach of tax-and-spend economics and big government programs always work? Does it always achieve the desired results? One of the most telling answers to this question can be provided by a most unlikely source who said the following: “We have tried spending money. We are spending more than we have ever spent before and it does not work. After eight years of this Administration [Roosevelt’s] we have just as much unemployment as when we started… And an enormous debt to boot!” Who exactly said this? It was Henry Morgenthau the Secretary of the Treasury and close advisor to President Roosevelt himself. According to Ph.D. Economist Thomas Sowell, much of the devastating criticisms about FDR came not from his enemies, but rather from people who worked closely to him like Morgenthau.
Perhaps the most troubling aspect about presidents like FDR and Obama is the perception they create on what government’s role should be in our lives. Today, people expect the government to do more for them. A growing number of people expect their healthcare, education, and housing to be provided to them by Uncle Sam. Anyone who denies this fact is not being intellectually honest. It is this kind of mentality that has countries like Greece in the trouble they are in today. When government grows too big and spends too much, there are consequences. In FDR’s case, we saw the Great Depression stretched out unnecessarily an additional seven years. In Obama’s case, well, that story is still unfolding. But with literally trillions in new debt that Obama is directly responsible for, credit downgrades to our currency as a result of excessive government spending and continued high levels of national unemployment, I’m not all that optimistic on what the next chapter holds for America. There is zero indication that the next four years will be any different from the last four years under President Obama. After all, his campaign slogan was “Forward.”
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