November 15, 2003
BROTHER, CAN YOU SPARE A PARADIGM (via Tom Corcoran):
Tough Questions for Defenders of the New Deal (Jim Powell, 11/15/03, LewRockwell.com)
1. Why did FDR triple federal taxes during the Great Depression? Federal tax revenues more than tripled, from $1.6 billion in 1933 to $5.3 billion in 1940. Excise taxes, personal income taxes, inheritance taxes, corporate income taxes, holding company taxes and "excess profits" taxes all went up. FDR introduced an undistributed profits tax. Consumers had less money to spend, and employers had less money for growth and jobs. [...]5. Why did FDR destroy all that food when millions were hungry? FDR promoted higher food prices by paying farmers to plow under some 10 million acres of crops and slaughter and discard some six million farm animals. The food destruction program mainly benefited big farmers, since they had more food to destroy than small farmers. This policy and subsequent programs to pay farmers for not producing victimized the 100 million Americans who were consumers.
7. Why did FDR break up the strongest banks? FDR broke up the strongest banks, which diversified with both commercial banking and investment banking. FDR's federal deposit insurance didn't stop bank failures, but it transferred the cost to taxpayers. About 90% of bank failures occurred because of unit banking laws that prevented small banks from diversifying through branches. Canada, free from branching restrictions, didn't have a single bank failure during the Depression. [...]
9. How did the Tennessee Valley Authority become a drag on the economy? FDR taxed 98% of the American people who didn't live in the Tennessee Valley, then used this revenue for the TVA power-generating monopoly, exempt from federal and state taxes and regulations. But non-TVA Southern states such as North Carolina and Georgia grew faster than TVA states, because there was a faster exodus out of farming and into manufacturing and services, which offered higher incomes.
But, on the positive side, he transferred Eastern Europe from Hitler to Stalin. Posted by Orrin Judd at November 15, 2003 8:35 PM
LewRockwell.com? I can hear Harry already.
Posted by: jim hamlen at November 15, 2003 10:07 PMLewrockwell.com as a source? C'mon. They are as dimwitted and reactionary as they come. Jim Powell's take on FDR may have some merit but it's all been tainted by a review on that website. (just trying to pre-empt, as they say)
Tripling federal taxes, over-regulating industry and regulating food production during the "Great Depression" did make sense. Right? 17 million out-of-work in 1933 and 17 million unemployed in 1940 was caused by the failure of markets. Please.
Posted by: Tom C., Stamford,Ct. at November 16, 2003 12:04 AMTommy Corcoran? - I smell a rat.
Posted by: ratbert at November 16, 2003 9:08 AMNo relation, I swear.
Posted by: Tom C., Stamford,Ct. at November 16, 2003 11:15 AMI'll just point out that the bank failures occurred during the Coolidge and Hoover administrations.
Posted by: Harry Eagar at November 16, 2003 3:37 PMQuite a few bank failures post 1932, although they slowed considerably from the '33 peak.
Posted by: Tom C., Stamford,Ct. at November 16, 2003 4:31 PMOf course they did. There were fewer banks around to fail.
Posted by: Timothy at November 16, 2003 4:39 PMSlowed, in fact, almost to nothing until Reagan got in.
Posted by: Harry Eagar at November 16, 2003 5:07 PMHarry:
Guess some of them couldn't do without those 20% second mortgages. The rest of us could, though.
Posted by: Peter B at November 16, 2003 5:53 PMYeah, that 18% inflation rate sure was good for the banks (gulp).
Posted by: jim hamlen at November 16, 2003 8:00 PMActually, Harry, you should ask Fernand St. Germain about the bank failures. He started them.
Posted by: ratbert at November 17, 2003 7:54 PM