By Caleb Franz:
Over the past several weeks, I have been engaged in reading Burton Folsom Junior’s excellent book on Franklin Roosevelt and the Great Depression, New Deal or Raw Deal. In it, Folsom gives a very different take at FDR and his New Deal policies. Since grade school, the “success” of the New Deal has been hammered into our heads and that government intervention is necessary in jump starting an economy, but how much of that is truth? After the Stock Market crash in 1929, the United States was not the only one affected; the whole world felt the effects of the depression. However, many countries in Europe felt those effects for only a short amount of time. As the Depression raged on in the United States for what seemed to be an endless decade, many European countries began to experience a recovery as soon as two to three years after the crash. This is because, in large part, the vase amount of government intervention in the U.S. created by FDR and his precious New Deal made the Great Depression much greater than what it needed to be while in Europe the markets where aloud to be free and trade commenced throughout many countries and free enterprise carried them out of an economic downturn. As I continued to read through, I continued to notice an increasing amount of similarities between Roosevelt and Obama and how they both seemed to think that government intervention is the best means of achieving economic prosperity.
Minimum Wage: Minimum Wage has remained among one of the most long lasting parts of the New Deal. During the Great Depression, FDR deemed Minimum Wage, or “Wages and Hours” as it was then called, “must” legislation. Roosevelt saw it as indispensable, and, in 1938, it became law. After it was passed, unemployment noticeably went up as result. Businesses, who were already hurt by the Great Depression, was now forced to restrain from hiring unskilled workers for low wages or layoff many unskilled workers who already had a sound job lest they face the threat of going out of business or laying off some of their maximum skilled and educated workers. Minimum Wage, as a result, hurt the very unskilled and uneducated workers FDR claimed to try to protect. Back then, Minimum Wage stated at 25 cents an hour, today it is at $7.25 and Barack Obama thinks it best if we raise it again. In the 2013 State of the Union, President Obama called on congress to raise the Minimum Wage to $9 an hour. While this sounds great in theory, the reality is that not only are you hurting unskilled workers and preventing them from obtaining a job, you are also devaluing the wages of high skilled workers as the money you take to raise the wage comes from their paycheck.
The WPA and Federal Relief: Since the times of our founders and even before that, relief had always been viewed as a job for local and charitable organizations and not the federal government. James Madison once observed that “No man is allowed to be judge in his own cause, because his interest would certainly bias his judgment and, not improbably, corrupt his integrity.” Essentially, Madison was saying that if areas such as relief were federalized, the process would become politicized and politicians would trade votes for relief. Ironically, this is exactly what happens when the Works Progress Administration (WPA) is signed into law to provide work relief to millions of unemployed Americans. As the election of 1936 came around, thousands of Americans were placed on WPA programs, many of whom were in no need of relief, to essentially win the election for Roosevelt. After the election was over, many of these same people were moved off of WPA work. Not only was the WPA used for political purposes, but it also hindered the economy as well. Every dollar used to put people on WPA programs was a dollar taken from tax payers. Or, to put in another way, every WPA job created was a private sector job destroyed. Barack Obama certainly had his share of using the Feds for political purposes during his last election. As Hurricane Sandy hit the Jersey Shore, he did not hesitate to get his photo opt with Chris Christi and showed America how much he cared. Shortly after, his approval ratings went up and he won reelection.
Taxes: There seems to be an endless rant from Barack Obama to tax the rich, to make them pay “more of their fair share”, but one must ask, what is “their fair share”? It turns out that today the richest one percent pay up to 40 percent of America’s income taxes, while the top 10 percent pays a little over 70 percent of income taxes. While that is certainly staggering, take into consideration that the top 50 percent pays 97 percent of the country’s income taxes. With that being said, Obama would wish for more taxes? While most Americans don’t think it really matters how much the rich pay as long as their taxes are not raised, it matters much more than people think. While rich people are increasingly buried with taxes, they can still handle it to some extent; their companies can still survive it. But as taxes continue to increase, many small businesses across America cannot catch up and are forced to go out of business or lay workers off thus empowering the very corporations many on the left, including the president, are out to get. Not only that, but there are a lot of good paying jobs under some of the wealthiest Americans; to increase taxes on the rich would be to increase layoffs and lower wages of those underneath them. Roosevelt thought the same as Obama, except he signed an executive order to tax the wealthiest Americans at 100 percent. Later, the Senate fought Roosevelt and settled at 90 percent taxation. These monstrous tax rates contributed too much of the long lasting unemployment and the Great Depression itself. In retrospect, the current tax rates can be contributed to the current unemployment and underemployment as well as the weak state of our economy.
The IRS: Perhaps the most frightening among the similarities between Roosevelt and Obama is the abundant abuse of power used within the agency of the IRS. Not just through taxation, but the political targeting that both have used to advance their political agenda. During Roosevelt’s time in office, he used the IRS as his personal weapon to attack those who stood against the Roosevelt administration. The IRS targeted with extra scrutiny any of those who objected to his New Deal and protected those who stood as a valuable asset to FDR and enhancing his New Deal. Roosevelt, however, did not protect political allies who did not provide a sufficient use to him. This is ominously similar to the recent IRS targeting done by the Obama administration harassing Conservative/libertarian groups during the past election season. It is now known that nearly 300 conservative groups had been targeted while only a total of six liberal groups had been targeted. It is also now known that it was not a small office in Cincinnati but rather high officials in Washington in the IRS doing all of the targeting. Barack Obama claims ignorance and outrage over the whole scandal, but as a result, he prepares the IRS for thousands of new workers to operate ObamaCare instead of downsizing it to ensure that it would not happen again. One must question his honesty over his knowledge over the situation when the IRS is an agency under the executive branch and the targeting did come from Washington and takes the orders from the President.
Our founders were certain that to ensure the future of our country, a virtuous public must be necessary, and that we must elect virtuous leaders to reflect us. The massive government intervention into American lives starting back in the New Deal days created incentives for presidents to abuse those powers and perhaps none have abused these powers more in recent history than FDR or Barack Obama.
Views expressed are not endorsed or put forward by Turning Point USA