Obama’s New Deal: The Same Old Raw Deal

by Chris Bounds on October 19, 2010

On May 9, 1939, these words scolding the failure of FDR’s New Deal echoed the room of the House Ways and Means Committee:

We have tried spending money.  We are spending more than we have ever spent before and it does not work.  I want to see this country prosperous.  I want to see people get a job.  I want to see people get enough to eat. We have never made good on our promises.  I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot!

Who is the man behind those words?  You would think it was a Republican?  However, it was actually FDR’s close friend, a trusted Secretary of the Treasury and architect of FDR’s New Deal.  His name was Henry Morgenthau Jr.

The New Deal was championed by the FDR Administration as the savior of America’s economy.  It was sold as a plan to pull the country out of the depression and drive down the surging unemployment rate.  Unfortunately, everything they did turned out to be a complete failure.   After seven years of disastrous results, Morgenthau realized that despite their multitude of failed efforts they had not improved anything, all while incurring a huge debt in the process.

Does that story sound anything like today?  Just for fun, let’s look at the unemployment charts.

Last year President Obama made a huge case to build support for the stimulus package that it was filled with funding for “shovel-ready projects” to help jumpstart the economy and keep unemployment from rising above 8%.  This chart shows how well that has worked out:


Compare that to FDR’s Administration, which never saw unemployment drop below 14% before World War II:

That glaring fact is one of the reasons why Morgenthau boldly stepped forward and proclaimed the failure of the New Deal.  Looking back we can now see that, as George Mason University economics professor Don Boudreaux said, “FDR’s policies put the ‘great’ in Great Depression.”  Yet, despite the parallels Obama continues on the same path as if this time it will work.

Like FDR, Obama has proved to be aggressive in pursuit of his economic agenda.  While I do not recall reading about a time when FDR stepped back from his agenda because he thought it wasn’t working, Obama seemed to hint that he was wrong on the whole “shovel-ready projects” and tax breaks thing in an interview with New York Times columnist Peter Baker(emphasis mine):

…Obama told me he had no regrets about the broad direction of his presidency. But he did identify what he called “tactical lessons.” He let himself look too much like “the same old tax-and-spend liberal Democrat.” He realized too late that “there’s no such thing as shovel-ready projects” when it comes to public works. Perhaps he should not have proposed tax breaks as part of his stimulus and instead “let the Republicans insist on the tax cuts” so it could be seen as a bipartisan compromise.

If that is to be construed as an admission of guilt by Obama, what Michelle Malkin posted is even more shocking.

How much of a tool is New York Times columnist David Brooks?

This much: On the PBS NewsHour last night, Brooks admitted that President Obama told him a year ago that he knew that the “shovel-ready project” propaganda he employed to pass the massive porkulus bill was a steaming load of bullcrap…

Transcript:

JIM LEHRER: Speaking of President Obama, there is this big piece in your newspaper’s Sunday magazine that’s already been read by everybody, at least anybody who has got an advanced company and who is interested in politics, about President Obama.

What do you think of piece?

…MARK SHIELDS: He didn’t have to do this. What he is doing, a retrospective before the election.

I mean, we have gone from perhaps the least introspective president to the most introspective president. I mean, he sits there and talks about what it means to him and all this. For goodness’ sakes, he’s got a responsibility to his party.

How would you like to be a Democratic member of the House fighting for your life right now, getting hit over the head for having voted for the stimulus bill, and have the president say in The New York Times Sunday magazine, there’s no such thing as a shovel-ready project?

JIM LEHRER: Yes. That was — that’s the piece that’s been — that particular quote has really been drawing the flies — the fleas, has it not?

DAVID BROOKS: Yes. Well, I shouldn’t have confessed this. He said this to me off the record about a year ago. But it hasn’t…

JIM LEHRER: Off the record? So, then you can’t talk about it.

(LAUGHTER)

DAVID BROOKS: Yes, because Peter Baker is a better than I am, because I couldn’t get him to go on the record with that thing.

(LAUGHTER)

JIM LEHRER: He said this to you a year ago?

DAVID BROOKS: It was obvious. I mean, you are trying to build a stimulus package. And when they were trying to build it, believe me, they would have loved to have filled it with infrastructure jobs. But the projects just didn’t exist. They couldn’t do it. They couldn’t find them.

Here is the video of the transcript:

If the two columnists are being honest, you have one quoting Obama as having a moment of truth, realizing his plans collapsed and another saying that he used rhetoric he knew to be untrue in order to build up support for his agenda.  So what should you believe?

Perhaps both columnists are indeed both telling the truth.  Maybe while Obama was giving mesmerizing speeches to rally Americans around his stimulus plan he knew the stimulus would fail because “shovel-ready projects” did not exist.  Or perhaps neither of them are being honest.  At the end of the day does it even matter?  Obama is still pursuing the same failed policies of the past, fueling the fire for a second great depression.

Watching Obama learn the lessons while at the helm during this rough economic storm is a bit humorous at first, but then I remember that I am one of the passengers grudgingly along for the ride.  Of course, this could be the ride he had been planning for America all along.

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