Fdr’s “New Deal”: Acclamation or Condemnation?

By William N. Spencer

History is an account, either verbal or written, which describes past events, good or bad.

In truth, most recorded history is a mostly false narrative of mostly unimportant occurrences which are the doings of czars, despots, and tyrants and their lackey soldiers.

For the most part, right or wrong, history has always been written by the winners—of whatever contest. And therefore, since the ‘losers’ are irrelevant and meaningless, it may then take society many decades, or more, to finally learn that most things were done, not really as the supporters and academics had recorded them for posterity.

History is more than just learning names, dates, and places. Real history is knowing why certain events happened at a certain given time in a particular certain place.

And real history is admitting that the supposedly ‘greatest’ saviors of humanity were really mankind’s ‘greatest’ purveyors of human misery.

• Language: English
• Publisher: Xlibris US
• Release date: Dec 4, 2019
• ISBN: 9781796075564

William N. Spencer

A life-long advocacy of youth ministry and teaching, with over forty years of work in the unionized labor sector, both public and private, has given me a strange perspective of the American workplace. After starting college at age 51, and ending with post-graduate degrees in both Management/Leadership and Human Resources Management, I have acquired the astuteness and discernment to put these shortcomings and faults into print.

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Copyright © 2020 by William N. Spencer.

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CONTENTS

Prologue

Why This Subject

Understanding It All

World War I

The Years Between

The Roaring 20s

The Crash

Hoover’s Half-hearted Attempt

Roosevelt’s History

How and Why

Making Things Worse, Round 1:

Making Things Worse, Round 2:

Winners and Losers

The Proper Context

Closing

FDR’s

New Deal:

Acclamation or Condemnation?

Was FDR’s Liberal / Progressive New Deal just utter and abject stupidity, or was it a well thought-out plan to lead America into the evil empire of Socialism?

Other Books by

William N. Spencer

What Goes Up Must Come Down

Why Can’t We All Just Get Along

Trickle Down Deviancy

Equality

The Declining Need for Human Resources

Professionals in Our Jobless Recovery

It’s Nothing Personal

Its Only Business

The Fallacy and Failure of Communism, Socialism, and Keynesian Economics

As An American:

Rights and Responsibilities

PROLOGUE

I N JANUARY 2018, at the start of this new book, my personal academic endeavor number nine, I was most self-assured that I would be treading into uncharted territory where very few researchers or writers had traveled before.

But, much to my surprise, there was already a plethora of honest-FDR rhetoric out there, and easy to obtain, or so I mistakenly thought. I had a list of over 500 books in print supporting my theory. Yet, in my city’s democrat party controlled liberal public university, less than 50 of these were on-hand or available. In addition, thousands of on-line PDFs, posts, and reports were readily available, all in agreement with my theme and thesis that President Franklin Delano Roosevelt did not in any way ‘end’ the ‘Great Depression’, but instead, exacerbated and prolonged its devastating effects upon all American citizens.

I mean, seriously folks, how could anyone back then, or even worse today, not see the bright glaring and blaring light of socio-political-economic truth. Yes, FDR and his ‘New Deal’ programs created thousands of jobs for the down-and-out of work; but what no one anywhere ever talks about is that for every four jobs created in the ‘public (government paid) sector’, five jobs were lost in the ‘private (consumer paid) sector’, and that the great, vast, swarm of taxes paid by these private sector working employees are what paid for these public sector government jobs. Extremely high tax rates always end up bringing in less tax revenue through the long-run by making it too expensive for employers to hire employees; and employee payroll taxes are the majority of governments’ revenue.

Unfortunately, the main-stream media then—in the 1930s and 1940s—is the same as today, ‘Fake News’ and ‘Lies’ about anything and everything that supports their own narrow political agenda, and then, the ‘Real Fake News’ by means of omission, that fails to report the majority of news, which in truth and fact, goes against their pre-determined political opinions and biases.

Many great researchers and writers over the past seventy-five years have put together quite a compelling and undeniable portrait of what really happened with the minor little economic hic-cup which became known as the ‘Great Depression’.

The problem then, as it is now; politicians who want to be perceived as being ‘popular’ rather than to be known as someone who will do the ‘right’ thing at the ‘right’ time, just because that is the ‘right’ thing to do, which in the real world is called ethical responsibility.

Each of my books, this being number nine, are in some way or another, even if just vaguely, connected with the field of Human Resources Management. And what controls this human function more than the American economy? And then again, what controls the American economy more than the greedy, rich Senators and Congress-persons in American government?

Perhaps, the largest impetus behind all of my missives is my own late-in-life academic endeavors—finding the truth. And as such, in one way, I do now have one ongoing theme in each and every one of my books—and that is my dislike (hatred, if you may) of fanatical, rabid ignorance, and for those people who disregard obvious and blatant factual truths, regardless of political party, race, gender, or religion.

Whether it be the ‘flat-earther’s’, the fundamentalist pseudo-religious bible bangers, the science-deniers who spiritually cling to the false notion of ‘man-made’ climate change and non-existent ‘global warming’, the Trump and Republican hating Russian collusion democrats, or any people who zealously refuse to acknowledge or accept the simplest semblance of reality; these then, are all a detriment to each and every American, and also to all citizens of our little planet earth.

What goes around, comes around; and the more that things change, the more they stay the same. And yes, history does repeat itself. Doing the same senseless thing over and over, expecting a different result each time, is pure insanity.

WHY THIS SUBJECT

I N THE UNITED States and most industrialized countries of the world during the late 1920s and the early 1930s, the chaos and turmoil created by the massive financial, banking, and business failures led to mass unemployment and its ensuing poverty, and therefore, the collapse of middle-class society; which soon became the massive changing of every-day life almost everywhere for almost everyone. Yet, even today in the years 2018/2019, it is almost impossible to have a sane and or rational discussion—due in most part to the ever-changing, fickle blame-game of ‘party’ politics—about the who, what, when, where, or why the ‘Great Depression’ actually started, ended, or lasted so long; much less who was really at fault for that decade of utter socio-economic doom and gloom.

After many years of reading and research as preparation for my previous eight books in the field of Human Resources Management, Economics, and our great American comedy fiasco of government, I have realized that there really are a few scholars and writers (none of whom are to be found in the public university systems) that have the courage and tenacity to question many of these erroneously long-held beliefs and mis-conceptions regarding our past political leaders. It is with this same vein of stubbornness and persistence that I endeavor to re-interpret and correct one more of recent American history’s sacred and revered fabrications and falsehoods.

Many, if not most historical monetarists and economists believe that the 1930s Great Depression started as an ordinary recession, but that substantial and significant policy mistakes by monetary authorities (especially the Federal Reserve) caused a shrinking of the money supply, which of course, greatly exacerbated the economic situation, forthwith causing a minor recession to descend into the ‘Great Depression’. Related to this explanation are those who point to debt deflation causing those who borrow to owe ever more in real terms. The Federal Reserve System should have cut short the process of monetary deflation and thus would have halted banking collapse. If the Federal Reserve had done that, the economic downturn would have been far less severe and much shorter. This only goes to underscore the point that the ‘Federal Reserve Bank System’ was not, and is not today, per se, a real and true ‘Federal Government’ system, but merely a consortium of banking executives conspiring and colluding together to maintain their continued and outrageously high profits; regardless at whose expense, or who has to suffer financially or physically.

Well guys, it’s not just me, there are millions of other government and economics scholars who have deduced this same conclusion. One of which is Julie Borowskl (2012) who states: Many economists blame the Federal Reserve for the Great Depression, but they do so for the wrong reasons. They believed that the economic recession turned into a depression because the Federal Reserve did not print enough money between 1930 and 1933. The real problem is that the Federal Reserve inflated the money supply in the 1920’s. Inflationary booms induce widespread malinvestment—bad investment decisions made under the influence of easy money and credit. Mal-investments inevitably lead to wasted capital and economic losses. An economic recession is actually necessary to correct all of the previous mal-investment.

A somewhat loquacious and long-winded few sentences of insight and truth can be found with the words of David Stockman (2014): The Great Depression was a unique historical occurrence—the delayed consequence of the monumental folly of the Great War, abetted by the financial deformations spawned by modern central banking. The Great Depression is exactly what enabled the Warfare State to thrive and dominate the rest of the 20th century because it gave birth to what have become its twin handmaidens, Keynesian economics and monetary central planning. Together, these two doctrines eroded and eventually destroyed the great policy barrier—-that is, the old-time religion of balanced budgets— that had kept America a relatively peaceful Republic until 1914. Hoover’s bitter-end fidelity to fiscal orthodoxy, as embodied in his infamous balanced budget of June 1932, got blamed for prolonging the depression, yet, the Great Depression was already over by early summer 1932.

Another loud and clear voice explaining the honest and straightforward origins behind the creation of this life-altering event comes from FSK’s Guide to Reality (2008): The Great Depression was 100% caused by the Federal Reserve. Anyone who suggests otherwise is a propaganda artist or a fool. In the mid-1920s, the Federal Reserve used its cartel power to set interest rates at a really low level. This caused inflation and an economic boom. Politically-connected insiders knew that an economic boom was being created. At the start of the boom, they loaded up and debt and bought assets before inflation set in. In 1929, the Federal Reserve insiders decided to jack up interest rates worldwide, causing a depression. The insiders knew what was coming. They stopped issuing loans and converted all their holding to cash.

Stratton and Roberts (2001) add their comments to the long list of blame-placers: A country that doesn’t understand its own history is not well equipped to deal with its future. The Great Depression was not a failure of the old order. It was the failure of the new order that had just begun. The Federal Reserve is the most powerful institution of a new order that believed in the efficacy of government and its ability to do good. The same Federal Reserve caused the Great Depression when its wise men made a series of cumulative mistakes that contracted the money supply by one-third and wiped out purchasing power in an unprecedented fashion.

Although the Federal Reserve Bank / System, created in 1913, is the quasi-central bank of the United States, it is not really a true government institution. The Fed is not funded by tax dollars, and its decisions do not have to be approved by the President or either house of Congress. The governing body within the Federal Reserve System is the Board of Governors. This is a seven-member committee whose members are chosen by the President and confirmed by the Senate. To ensure fair representation, there may not be more than one governor from each of the twelve Federal Reserve Districts across the nation. Members of the Federal Reserve Board of Governors have terms that last fourteen years.

Since 1977, the role of the Federal Reserve was changed somewhat, in order to allow congress to intrude and intervene even more into the wallets and purses of every American citizen. As if lawyer/politicians in control of poor peoples’ money is really any better than greedy rich bankers being in control of other peoples’ money? Supposedly, this ‘dual mandate’ from Congress is to cultivate economic conditions that achieve both stable consumer prices and maintain maximum sustainable employment – and it’s also charged with moderating long-term interest rates. The Federal Reserve is subject to Congressional Oversight—joke, joke, wink, wink—and any changes in the law that Congress passes. But, this being said, everyone knows just what ‘Congressional Oversight’ really means. And that is, the agency being regulated or discussed gets away with doing whatever they want to do, as long as the congress-people continue to get the big money pay-offs, bribes, or whatever you wish to call them—under-the-table and off the books income.

My learned and cultivated research into the controlling factors of Human Resources Management, politics and economics, has led me to be most skeptical of almost anything, perhaps even everything that is presented by or brought forth by anyone who is in any way connected with any political person or political party. Ninety-nine percent of elected politicians are lawyers; and the ninety-nine percent of those are described correctly by this most often quoted adage: When is any lawyer lying? Whenever their lips are moving! I need say nothing else?

So in truth and fact, honesty and veracity, the minor little stock market correction caused by uncontrolled and unregulated margin sales—borrowing to buy stock which had been predictably increasing in value for a long period of time—finally came to an abrupt end. And while this ‘stock market problem’ had a direct effect on only a small portion of American society, its after-effects and consequences ran deep.

Robert Himmelberg (2001) conjectures on this phenomenon of a financial down-hill spiral: The Great Depression differed from preceding depressions because it was deeper and longer and reached worldwide. Not only was the devastation wrought by the economic decline from 1929-1933 without precedent in American history, but the anemic quality of the recovery, which began in late 1933 and extended through much of 1937 was also without parallel. The year to year growth of unemployment and industrial output was in itself quite impressive, averaging ten percent, but the overall result proved disappointing. After four years of recovery, the output of goods and services finally regained its 1929 level, but the recovery of output failed to generate anything like full employment or general prosperity. In 1937, at the peak of the recovery, approximately fifteen percent of the industrial workforce was still unemployed. So large a mass of job seekers created downward pressures on the incomes of those who were employed. The incomes of a large proportion of American families—those whose breadwinners were among the unemployed, or had jobs offering only intermittent employment, or were still afflicted by depression-level pay rates—were very low.

One of the most common problems we face, as researchers today when trying to deal honestly and forthrightly with the question of what really made the 1930-1945 depression into the ‘Great Depression’, is that the vast majority of narrow-minded, pointy-headed academic-type people, and so-called pseudo-scholars usually prefer to begin their analysis in, or very shortly before, 1929 and end it in the year 1941 or thereabouts. Furthermore, they take for granted that all of these relevant happenings consist only of that twelve-year time period in which annual real output invariably fell short of the economy’s capacity to produce, and that within only this very short time span, the determinants of each year’s substandard performance consisted of associated conditions and events.

This short-sighted approach sanctions and allows a tendency to misrepresent happenings in two important ways. First, it fails to give adequate weight to the events of 1914-1929 (the WWI during and after years) that instilled and inflicted the conditions for the beginning of the depression, and thus helps us to better understand why so many different governments responded to it as they did, and thereby intensified it; that is to say, academics and scholars too often fail to appreciate that the true roots of the Great Depression are predominately cast in the disorders created by the First World War. The human loss of over 8.5 million soldiers in Europe cannot be ignored when factoring in the world’s mind-set of that time and era.

And in further error, these customary examinations inaccurately take for granted that the ‘Great Depression’ actually ended in 1941 with the beginning of the next ‘Great War’, and was succeeded by an era of economic prosperity, often called the ‘wartime prosperity’; conversely, in reality, the WWII years themselves were not a time of genuine personal affluence.

The most pressing issues leading up to the dawn of the ‘New Deal’ must include a great many significant global events and many individual but intertwined mini-eras of history; such as World War I, the Roaring 20s, Prohibition, and the ‘stock market crash’ of 1929.

While the United States military, fighting-wise, really had very little to do with the outcome of World War I—The United States being a late arrival in the arena of combat—America was very much involved in the War with from the beginning with serious amounts of manufacturing production and economic finance, such that the USA was a very major player in the game at the very beginning. Therefore, each and every action and reaction with any of the major players on either side had a severe long-term effect upon America’s continuing economy.

So just for the sake of presumptive argument, let’s assume that Great Britain and the United States had both refused to participate in World War I; which very easily could have (or really should have) happened. Yes, of course Germany would have been victorious and triumphant, and yes they would have taken control of parts of France, Belgium, Austria-Hungary, and Western Russia. But all in all, would this really have been so bad for most of Europe or for the world?

On the positive side, a World War I German victory would have totally prevented WWII. Yes, Germany would have also acquired Belgium, Luxemburg, the Netherlands, and much of north-eastern France; but after 20 – 25 years, no one would have cared anymore. And at that point, Germany would not have been indebted to the rest of the world by being forced into paying two to three times its GNP every year as ‘war-loser’ reparations. Hitler would have been just one more of many WWI veterans, a third rate nothing/nobody portrait painter. But instead, just five years later, Hitler was getting famous with his blithering and blathering bloviations about vengeance for the two million lost German lives and the hundreds of million Marks that the bankrupt German State had to pay over to the rich Allies. And in Russia, Lenin would have been able to carry on his idiotic chicken-scratch scribbling that nobody in their right mind would have ever read or noticed.

But instead, because of Woodrow Wilson from America, Clemenceau from France, and Sir Lloyd George from England—national leaders who were more interested in economic punishment against Germany rather than economic restitutions—the average/ordinary German citizen was left filled with hatred and rage towards each of the Allied victors.

The Paris Peace Conference of 1919, and the signing of the Treaty of Versailles on 28 June 1919, between Germany on the one side, and the United States, France, Italy, Britain and other minor allied powers on the other, officially ended war between those countries. But, in truth and fact, this Treaty of Versailles and the 1921 London Schedule of Payments, more than anything else, was not only the cause for our own American ‘Great Depression’, but was also the number one factor leading everyone into World War II.

The dollar reparation schedules mandated by the London Schedule of Payments was completely unreal, its primary function was to mislead public opinion into believing that adequate revenge was being undertaken. Each and every one of the so-called Allied-forces economic experts knew well and good that Germany could not pay such an enormous and extravagant amount, and that the other remaining Central Axis Powers could pay very little if anything.

It should have been no surprise to anyone that the people of Germany saw these