Obama's Depressing Parallels with FDR

Article excerpt

Pushing his agenda for higher taxes on "the rich," President Obama kicked off his Dec. 6 speech in Kansas by saying his Kansas grandparents "shared the optimism of a nation that triumphed over the Great Depression."

In fact, the 1929 stock market crash turned into the long- running Great Depression because the ill-conceived and counterproductive policies of the federal government hadn't "triumphed."

Franklin Roosevelt's forceful expansion of federal regulations and taxation, his intimidation of "the rich," encouragement of labor strikes and half-baked policy experiments discouraged employers from hiring workers and provided strong disincentives to new business investment.

"From 1929 to 1940, from Hoover to Roosevelt, government intervention helped make the Depression Great," writes Amity Shlaes in "The Forgotten Man: A New History of the Great Depression." "The trouble, however, was not merely the new policies that were implemented but also the threat of additional, unknown, policies. Fear froze the economy, but that uncertainty itself might have a cost was something the young experimenters simply did not consider."

Roosevelt's goal was to enlarge the power of the public sector, increase revenues to the government and expand the economic controls of the centralized bureaucracy -- even for dubious projects (today's version of equally dubious projects includes federal handouts for the Volt, more than $500 million in loan guarantees to politically correct but economically bankrupt Solyndra, Cash for Clunkers and federally-imposed mortgage goals that promoted zero-down loans to unqualified buyers).

As Roosevelt stated it in his second inaugural address, he sought "unimagined power. …