The comments by Chriss Street (Orange County Treasurer) should not be surprising to anyone ("Community Commentary: Deficit spending a bad move for U.S.," July 25). The comments by Tom Egan are surprising and seem to be more emotional than historical fact ("Sounding Off: Treasurer's arguments were shallow," July 28). President Obama is doing pretty much what he said he was going to do. The effects were easily predictable as they were, as far back as the FDR administration.
Henry Morgenthau served as FDR's Treasury secretary. Thus Morgenthau, who served from 1934 to 1945, was to FDR what current Treasury Secretary Timothy Geithner is to Obama. Morgenthau wrote in 1939: "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!"
FDR's policies prolonged the Great Depression by seven years.
Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.
After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.
"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chairman of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."
Little to nothing has changed since the 1930s. We are still making the same ill-advised public policy, based on social engineering concepts that have never been successful. The public sector employee rolls and benefits grow and the private sector shrinks as the tax burden grows. This is the true legacy of FDR.
Henry Morgenthau served as FDR's Treasury secretary. Thus Morgenthau, who served from 1934 to 1945, was to FDR what current Treasury Secretary Timothy Geithner is to Obama. Morgenthau wrote in 1939: "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!"
FDR's policies prolonged the Great Depression by seven years.
Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.
After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.
"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chairman of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."
Little to nothing has changed since the 1930s. We are still making the same ill-advised public policy, based on social engineering concepts that have never been successful. The public sector employee rolls and benefits grow and the private sector shrinks as the tax burden grows. This is the true legacy of FDR.
Lightfoot Letters
Published August 3, 2010 - LA Times/DP
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Comments Published Tuesday, Aug. 3, 2010
10:47 a.m. PDT
Upton+ at 11:58 AM August 05, 2010 The main thrust of Lightfoot's argument is based on a hasty generalization. Just because specific stimulus policies may be ill-conceived it does not follow that all stimulus policies are ill-conceived. A quick glance over the work of the UCLA professors cited shows that, in their opinion, antitrust and wage tampering were the culprits that extended the Great Depression, neither of which are examples of deficit spending nor policies of the current administration.
And while in 1939 FDR's Treasury Secretary may have shown major reservations over increased deficit spending, it would have been interesting to get his take a few years later when the economy was booming again after the enormous and never since equaled commitment to deficit spending made necessary by the war, a commitment that ballooned the national debt to 123% of the GDP.
And while in 1939 FDR's Treasury Secretary may have shown major reservations over increased deficit spending, it would have been interesting to get his take a few years later when the economy was booming again after the enormous and never since equaled commitment to deficit spending made necessary by the war, a commitment that ballooned the national debt to 123% of the GDP.
Robin Daily at 11:27 AM August 05, 2010
Couldn't said it better myself. Government doesn't create jobs, businesses do. All the added burden on the taxpayers only takes money away from the people that support this country and give them less to spend on themselves and their families. 75% of the US economy is based on consumer spending and when they don't have the money or credit available to spend well guess what happens, the economy tanks. That's exactly Obama doesn't get.
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Commentary Published August 13, 2010
I would like to add to Lightfoot's argument about the Roosevelt administration in prolonging the Great Depression. After President Hoover tried to tax America into being prosperous, FDR decided he would even do bigger tax increases in the name of prosperity. This led to a double-dip depression and made everything worse. Higher taxes on everyone, especially the so-called rich, simply retards employment, government revenue and sales for businesses.
It seems to me that the current administration and Congress should take a look at the 1990s when President Clinton was forced by a GOP-controlled Congress to balance a budget and rein in spending. I think the current administration could learn a lot from this. It seems every time a Washington bureaucrat tries to fix something via new taxes, laws or regulate something, it ends up with unintended consequences.
I would refer you to an excellent historical account of the Depression years and unintended consequences the Washington bureaucrats caused in Amity Schlaes book, "The Forgotten Man". The voters could help rein in this administration's spending by giving the GOP control of the House and Senate.
Terry Johnston
Newport Beach
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Differences of opinion on New Deal
"President Obama is doing pretty much what he said he was going to do. The effects were easily predictable as they were, as far back as the FDR administration."
So writes Lightfoot ("Sounding Off: Obama repeating FDR's economic mistake," Aug. 3) about misguided policies, Lightfoot asserts, that "prolonged the Great Depression by seven years."
He leads by quoting Henry Morgenthau (former Treasury secretary-cum-critic) who dismissed the New Deal as a total failure.
Lightfoot claims that the New Deal prolonged the Great Depression by seven years. He gets his seven years from a 2004 paper by UCLA economists Cole and Ohanihan. But their conclusion is at odds with historical data, argues Gauti B. Eggertsson of the New York Federal Reserve Bank ("Was the New Deal Contractionary?" 2008).
In more than 40 dense pages, Eggertsson writes: "Deflation turned into inflation in March 1933 when FDR took office and announced the New Deal. Output, industrial production, and investment responded immediately. Annual GDP grew by 39% in 1933-37 and monthly industrial production more than doubled. This is the greatest expansion in output and industrial production in any four-year period in U.S. history outside of wartime."
According to Eggertsson, Cole and Ohanihan err in assuming the economic shocks that caused the Depression were largely over in 1933 and gone by 1936. Hence the difference in their projections.
Dick Lewis
Balboa*
I would refer you to an excellent historical account of the Depression years and unintended consequences the Washington bureaucrats caused in Amity Schlaes book, "The Forgotten Man". The voters could help rein in this administration's spending by giving the GOP control of the House and Senate.
Terry Johnston
Newport Beach
*
Differences of opinion on New Deal
"President Obama is doing pretty much what he said he was going to do. The effects were easily predictable as they were, as far back as the FDR administration."
So writes Lightfoot ("Sounding Off: Obama repeating FDR's economic mistake," Aug. 3) about misguided policies, Lightfoot asserts, that "prolonged the Great Depression by seven years."
He leads by quoting Henry Morgenthau (former Treasury secretary-cum-critic) who dismissed the New Deal as a total failure.
Lightfoot claims that the New Deal prolonged the Great Depression by seven years. He gets his seven years from a 2004 paper by UCLA economists Cole and Ohanihan. But their conclusion is at odds with historical data, argues Gauti B. Eggertsson of the New York Federal Reserve Bank ("Was the New Deal Contractionary?" 2008).
In more than 40 dense pages, Eggertsson writes: "Deflation turned into inflation in March 1933 when FDR took office and announced the New Deal. Output, industrial production, and investment responded immediately. Annual GDP grew by 39% in 1933-37 and monthly industrial production more than doubled. This is the greatest expansion in output and industrial production in any four-year period in U.S. history outside of wartime."
According to Eggertsson, Cole and Ohanihan err in assuming the economic shocks that caused the Depression were largely over in 1933 and gone by 1936. Hence the difference in their projections.
Dick Lewis
Balboa*
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Non-Vox comments; August 3, 2010
cambriaman wrote: Got it!..Good piece. And, absolutely right on! Quick fixes are never good economics and they're proving it again.
I may not live long enough to see the end of the Obamapression!
I may not live long enough to see the end of the Obamapression!
"gladysund wrote: I got it, Hub is reading it as I write. Very good!
thefuturewoman wrote: I was wondering when someone who could make a difference and have credibility would write about FDR.
dlittlewor wrote: What a lot of people do not know is that the country damn near went into another great depression in 1946 because of the effects of the policies of FDR.
rearus wrote: Very interesting information!
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