Saturday, May 22, 2010

My calm and rational response...

Nice and easy... no need to freak out... I'll take them one at a time, just as you presented them...

The Numbers

1) I can't say why or where the "Great Depression" got its name, but if I had to make a guess, it would be to identify it from other catastrophic depressions in our history, like the Long Depression. I do not discount, however, the fact that while the 1929 depression didn't last even as long as the longest 20th Century depression, it was the most severe in its impact on American society. 38% unemployment, one out of every four banks failing completely, and 3/4 of all mortgaged farms falling into foreclosure. The scope and effect that this contraction had was categorically worse than anything we had suffered previously, surely you must see that? Then, add to the mess the unprecedented drought that hit 14 Midwestern states from 1930 to 1935, and the US is facing, for the first time ever, the very real prospect of a famine of biblical proportions.

I can't deny that Harding did choose to NOT follow Hoover's advice and offer Federal intervention in 1920, and instead reduced both taxes and spending (more on this in a minute) to balance the budget. The economy did recover, as you said, in less than two years. This is a very good model for your argument that interventionist policies contribute to the problem more than they help resolve them.

I would make my own assertion, though, that while the "hands off" policies of Harding did nothing to prolong the problem, they also did nothing to prevent the problem from happening again. In fact, I think a good case can be made that, in the government's attempt to regain revenue lost in the tax cuts of 1920-1921, their implementation of tariff legislation not only did nothing to fix short-term problems but directly contributed to the disaster that was waiting in 1929.

This leads me to the direct association between Harding/Coolidge/Hoover "conservatism" and Ronald Reagan's "ideal" model of government: Reagan understood the importance of keeping money where it was best used... in the hands of American business and consumers by lowering taxes. Where he and his Roaring Twenties predecessors differed, however, was in making sure that the ability of government to play the role of consumer wasn't reduced in the process. That means that government must continue to SPEND money even when revenues are reduced artificially. This is even more true in today's world than it was in the 1920's, since the size and scope of government make it a huge consumer of both private and commercial resources as a matter of course.

2) I do not (nor can I) deny that our economy is cyclic in nature and will always have a series of ups and downs to contend with. That is, as you said, the very nature of "free market" economics. I fail to see where such governmental regulations as those imposed by Reagan in the 80s (specifically the speculation pricing regulations on crude oil), which do nothing but curb the extremes of the cycle, can't be seen as a good thing for all involved. True laissez faire policy would mean that only the market itself regulates the economy, and such security or national interest policies as exist today in the realm of child labor, controlled substances, restricted technology or resources, and unfair trading practices are extraneous and self-defeating... which we have all agreed they are not. Again, if it is good for the goose, it is good for the gander.

To argue that there is no difference between the economic climate before 1929 and that which came after is simply wrong. If you do even a little hunting, you can find that we suffered a depressed economy (rather than simply a recessed economy) at least once every 10 years since 1797... but haven't had even ONE since 1933 (the end of the '29 depression). Recessions yes, depressions no. Something in our regulation and control of market factors changed between 1928 and 1934 that has allowed the markets to continue to cycle, but without the extremes of scale that brought us both the unmitigated bonanza that was the Roaring Twenties (seven years of unprecedented growth and wealth accumulation) and the Great Depression (three and a half years of the most rapid and wide-spread economic panic in the last 150 years).

I do not even claim that it was "New Deal" that brought this change... only that it happened somewhere inside of the historical period marked by the Presidency of Franklin Delano Roosevelt. FDR didn't support each and every bill that came through the pipe, you know... and the GOP, while reduced in power and ability, still initiated legislation and fought that which they felt was bad for the country.

3) I agree that arguing statistics is painful and nearly pointless if one of us (ahem) refuses to accept the other's as factual in any way, shape or form. "Malaise" is not generally accepted as an economic indicator of national recovery or domestic strength and growth, yet you routinely use that term to define why, in spite of unemployment being the ONLY indicator that wasn't WORSE than its 1929 level by 1936, New Deal failed utterly. When the economy again retracted in 1937 ("taking it off the teet" as you say), I have shown clearly and plainly that it was due to government's (and specifically the new GOP majority in the Senate) insistence on balancing a budget that wasn't ready to be balanced. Knowing the climate that Reagan came into the White House with, you didn't hear HIM calling for a balanced budget in 1982, or even 1986... he only focused on keeping taxes low and promoting a growth climate within the economy. Anything more would have been nothing but opposition politics and doomed to fail, as I think you will readily admit.

4) As already stated, I can't point to any ONE item on the list of New Deal programs or policies that fixed the "depression-boom" cycle (I'm using very general terms here... I don't contend that the cycle was ever broken, you understand). I am simply saying that something at a regulation-level has allowed our economy to continue to grow at a steady, even pace over the last 75 years without ever falling into a "depression" (again, in the technical sense of the term), and with recessions only lasting, on average, less than 24 months (until the current one, that is). Very little of the New Deal survived the end of WWII... as you pointed out... but NOT because they were overturned by the SCOTUS or later administrations. They were intended to be temporary measures, with limited scope and duration, as part of the three-step New Deal promise of "relief, recovery and reform".

Soup kitchens, temporary housing, price subsidies and bank holidays were "relief" for the immediate symptoms of the depression and its vast scale and depth. The "ABC" programs were part of the "recovery" process, putting people into paying jobs working for the government in one capacity or another. SSI, Medicare, FDIC, the FTC (not New Deal, I know... but a focus of the Roosevelt plans) were all part of the "reform" process that would make sure the Great Depression didn't repeat ten years later, with even greater impact (if that was possible). Not every program worked, and not every program was legitimate, but the recovery was complete (with the exception of unemployment, I know) economically by 1936, and the Roosevelt recession didn't last longer than the fiscal budget that caused it (in my opinion). New Deal, as instituted in 1933, was over and done by 1945. Calling a President or an economic policy "New Deal" after that is simply to stereotype the plan as similar in scope or intent, for good or bad. That's not to say that SSI, TVA, FDIC aren't New Deal in origin... they are... but they are the exception to the rule, and can or could have been overturned or repealed at any time since, given the popularity of the intention. All have been weighed against the findings of the Supreme Court, and all have been found to be Constitutional in nature and scope. If enough of America hasn't come to see the insidious nature of these programs, then it is the fault of conservatives everywhere for not making the case clear enough in the decades since their implementation.

The Ideology

1) Your general point seems to be that implementation of an entitlement policy or program automatically means it is a permanent feature in our society. Reality says this is probably true, in a broad, general sort of understanding. However, this isn't strictly limited to entitlement programs, either. When the Federal government established its first income tax codes after the ratification of the 16th Amendment in 1913, the top marginal rate was 7%, and there were only three rates total. It doesn't get much simpler than that, does it? However, Wilson's administration took that top marginal rate all the way to 78% in less than four years, and while it has come down in the interim years to as low as 24% and is currently at 38%, I am confident in saying that it will never again be as low or as simple as its original 7%. I do not feel this is because of entitlement programs and bloated government brought about by Democratic agendas and policies, but rather by an uninterrupted train of Presidents and Congresses that have looked to increase scope and authority of government in this nation since (at the very least) Lincoln's inauguration in 1861... regardless of party affiliation.

2) Your indictment of FDR is clear and well laid out, but as you said in your post, it isn't limited only to him, or even to his party. The difference I see in what FDR was able to accomplish is that during his first term ('33 to '37) America elected such a majority of Democrats into power that we were as close as we have ever been to a "One Party" system. Vast majorities in both Houses, and a committed "reformer" in the White House, left only the very conservative Supreme Court to balance the powers of the Federal government, and they were only able to do so much. Even the Reconstruction Era didn't see as stacked a Congress as we had in '33 and '35. While I feel this adequately explains your presented evidence for the sweeping changes that occurred at the Federal level over these years, it doesn't equate to FDR single-handedly changing the face of American politics or the Constitution itself.

3) Your question is "What was FDR reforming?" I feel he was working to remove the possibility that such a disaster as the Great Depression would ever happen again. I do not deny that much of what he said and supported smacked of socialism, but I feel that I must go out on a limb here and make a point about "ideology" that seems to be lacking in your opinions on FDR.

All of America was watching as socialism and radical communism was sweeping countries every bit as ravaged by the depression as the US. Italy, Spain, Germany, Hungary, Greece, China, and Brazil were controlled by socialistic regimes where democratic government was replaced with totalitarian repression or were experiencing insurgencies and civil wars fought over the same issues. Fascism and socialism were growing in popularity even here in the US with every year of economic hardship that passed after the initial crash in 1929. Taking the "hands off" approach that the Harding/Coolidge/Hoover Administrations had to such sentiments was every bit as dangerous as what you are suggesting FDR did do after his inauguration, in the eyes of many since then... myself included.

You can decry the "reform" all you want, from your position 75 years in the future, but I say the threat to America's safety, security and well being was far greater had we done nothing to institute "relief and recovery" when and how we did, and those couldn't have been completed had "reform" not followed to show the promise that the situation wouldn't repeat in the very near future, as it had throughout our history.

If you continue to feel that all that FDR stood for and accomplished as President was "anti-American" in its nature, even after I have tried to show alternative interpretations of the same facts and figures, then nothing I can say here will do anything anyway. All I can say is that if you don't want the problem to compound or repeat with our current CIC, then you had better find clear, unambiguous means to show your case to be irrefutable to the rest of the voting population before it is "too late" and Obama's latest round of entitlement programs and policies become just as entrenched as you see FDR's are. History provides the proof, you simply have to make it clear and apparent to the rest of America.

And that includes me, by the way.

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